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HR Tip of the Month – FLSA Coverage

Almost every organization and employee is subject to the Fair Labor Standards Act (FLSA). Since the new overtime rules were released in May, many employers have been asking if there are exceptions for small companies, nonprofits, or churches. The answer is no – there are no special carve-outs. There are two ways in which employers and employees can be covered by the FLSA; if either applies, then so do all of the FLSA rules.

The first kind of coverage is called enterprise coverage. This applies when an employee works for an employer who has an annual dollar volume of cash sales or business done of $500,000 or more (this doesn’t include charitable donations, but does look at any for-profit side business run to maintain a non-profit, like a book store). Enterprise coverage also applies if the employer is a hospital, business providing medical or nursing care for residents, school or preschool, or government agency, no matter the volume of business.

The second type of coverage is called individual coverage. Even when there is no enterprise coverage, the FLSA will cover individuals engaged in interstate commerce. If an employee makes goods that will be shipped to other states, sends or receives out-of-state shipments, places telephone calls to another state, or partakes in any number of other basic business activities that help things, money, or information cross state lines, they will qualify for individual coverage. This even includes running credit cards and processing checks.

Content provided by TPC HR Support Center.