Provisions included in the FLSA are also the subject of California law which, in most cases, is more favorable for employees. Where both state and federal law govern the same issue, you must follow the law more favorable to the employee.

The Wage and Hour Division of the U.S. Department of Labor administers and enforces the FLSA. Special rules apply to state and local government employment involving fire protection and law enforcement activities, volunteer services and compensatory time off in lieu of cash overtime pay.

This topic contains the following information:

• Who Is Covered By the FLSA?
• FLSA Record Retention Requirements
• FLSA Enforcement

For more information, see the following sections, which guide you to the law you must comply with in California.

• Minimum wage and other compensation issues are covered in Wage and Salary.
• Hours of work are covered in Hours of Work and Recording Time Worked.
• Overtime obligations, computation and payment are covered in Overtime Pay.
• Employment of minors is covered in Child Labor Law.
• Classification of employees as exempt or nonexempt from overtime is covered in Exempt/Nonexempt.

Who Is Covered By the FLSA?

The FLSA covers a majority of California businesses. An entire enterprise, or business, may be covered if it meets certain tests. If the FLSA covers an enterprise, it covers all of the enterprise’s employees. However, even if an enterprise does not meet those tests, some of its employees may fall under the FLSA through individual coverage.

When neither enterprise coverage nor individual coverage apply, you are not covered by the FLSA provisions and should look to California law only.

FLSA Enterprise Coverage

The FLSA covers all employees of enterprises engaged in interstate commerce, producing goods for interstate commerce; or handling, selling or otherwise working on goods or materials moved in or produced for commerce by any person.

Employees who work for certain enterprises are covered by the FLSA. These enterprises, which must have at least two employees, are:

• Enterprises that have an annual dollar volume of sales or business done of at least $500,000.
• Hospitals, businesses providing medical or nursing care for residents, schools and preschools and government agencies.

FLSA Individual Coverage

Even when there is no enterprise coverage, employees are protected by the FLSA if their work regularly involves them in commerce between states, or interstate commerce. The FLSA covers individual employees who are engaged in commerce or in the production of goods for commerce.

Examples of employees who are involved in interstate commerce include those who:

• Produce goods that will be sent out of state; for example, an employee assembling components in a factory or a secretary typing letters in an office.
• Regularly make telephone calls to people located in other states.
• Handle records of interstate transactions.
• Travel to other states on their jobs.
• Perform janitorial work in buildings where goods are produced for shipment outside California.

Domestic service employees, such as day workers, housekeepers, chauffeurs, cooks or full-time baby-sitters fall under the FLSA if they:

• Receive at least $50 in cash wages in a calendar quarter from their employers
• Work a total of more than eight hours a week for one or more employers

The Wage and Hour Division of the U.S. Department of Labor administers and enforces the FLSA. Special rules apply to state and local government employment involving fire protection and law enforcement activities, volunteer services and compensatory time off in lieu of cash overtime pay.

FLSA Record Retention Requirements

The FLSA requires you to keep records on wages, hours and other items as specified in Department of Labor record keeping regulations. Most of the information is typically already maintained by employers in ordinary business practice and in compliance with other laws and regulations. You need not keep the records in any particular form.

For an employee covered by both minimum wage and overtime pay provisions (nonexempt employees), the FLSA requires that you keep the following records:1

• Personal information, including employee’s name, home address, occupation, sex and, if less than 19 years of age, birth date
• Hour and day when workweek begins
• Total hours worked each workday and each workweek
• Total daily or weekly straight-time earnings
• Regular hourly pay rate for any week when overtime is worked
• Total overtime pay for the workweek
• Deductions from or additions to wages
• Total wages paid each pay period
• Date of payment and pay period covered

Special information is required for:2

• Homeworkers
• Employees working under uncommon pay arrangements
• Employees to whom lodging or other facilities are furnished
• Employees receiving remedial education

• California law requires similar information for both exempt employees and nonexempt employees, though California law is more extensive. For more information, see Timekeeping and Recording Guidelines.

FLSA Enforcement

Investigators stationed across the United States carry out the Wage and Hour Division’s enforcement of the FLSA. They conduct investigations and gather data on wages, hours and other employment conditions or practices to determine FLSA compliance. If they find violations, the investigators may also recommend changes in employment practices to bring an employer into compliance with the FLSA.

An employer, including individual owners, found guilty of violating the minimum wage and maximum hours provisions may be required to pay the amount due to employees plus an equal amount in liquidated damages.3

Fines and penalties vary.4 They can range from $1,000 for a single violation to over $100,000 for repeated violations (such as those that lead to injury of a minor). Some willful violations can also be prosecuted criminally. Information on current penalties can be found on the DOL website.

The FLSA prohibits shipping goods in interstate commerce that were produced in violation of the minimum wage, overtime pay, child labor or special minimum wage provisions.5

1. 29 CFR 516.2