Workers at a Hershey factory are speaking out about the brutal and unfair working conditions they face, including excessive overtime, low pay, and a toxic work environment, which contradict the company’s public claims of prioritizing employee well-being.

• 💼00:00 Workers at a Hershey factory describe brutal working conditions, including consecutive days of work without days off, forced overtime, and exhaustion, despite the company’s claims of prioritizing employee well-being.
• 💔00:41 Workers at a Hershey factory describe a toxic work environment where employees are quitting and feeling unvalued, with management even monitoring their social media posts.
• 💼00:59 Hershey factory workers face brutal conditions, including a two-tier pay system, outdated machinery, and denied benefits, with employees making significantly different wages and having unequal vacation and pension opportunities.
• 💔01:58 Hershey factory workers face brutal conditions, including favoritism, limited room for advancement, and a point system that shows management’s non-caring attitude towards employees.
• 🤒02:27 Hershey factory workers can be penalized with points and even forced into counseling for missing work due to illness, with strict limits on allowed absences.
• 👮02:54 Workers at a Hershey factory claim management spied on their union activities, prompting plans to file unfair labor practice charges.
• 💼03:41 A Hershey factory worker claims to have been unfairly terminated for union activities, after being fired on a first-time offense for being 14 minutes late from a break, with management allegedly using a 6-year-old disciplinary action to justify the termination.
• 💼04:34 Hershey factory workers expose brutal working conditions, including excessive overtime, strict penalties for sick leave, and fear of retribution, amidst the company’s record profits and claims of employee unity.

Revised July 2008

This fact sheet provides general information on minimum wage, overtime pay and child labor requirements of the Fair Labor Standards Act (FLSA) as they apply to residential care facilities, including group homes, board and care facilities. It is designed to alert employers to certain employment practices that must be followed to ensure compliance with the FLSA.

Characteristics

The residential care industry includes all firms primarily engaged in providing residential social and personal care for children, the aged, and special categories of persons with some limits on the ability for self-care, but where medical care is not a major element. Employees may perform work at one or more locations and in some instances may reside on the premises.

Coverage: The FLSA applies to employees of certain institutions primarily engaged in the care of sick, aged, mentally ill or defective clients who reside on the premises. The Act applies whether the institution is public or private or is operated for profit or not-for-profit.

Requirements

Minimum Wage: All non-exempt employees must be paid the Federal minimum wage on their regularly scheduled payday.

Overtime: All non-exempt employees must be paid overtime at a rate of time-and-one-half the regular rate of pay for each hour of overtime worked. Residential care facilities must pay overtime after 40 hours in a 7-day workweek, or (under prescribed conditions), may adopt agreements with their employees to pay time-and-one-half overtime rates for all hours worked over 8 in any workday or over 80 in a 14-day work period, whichever is the greater number of overtime hours.

Recordkeeping: Employers are required to maintain accurate payroll and daily and weekly time records. Time records must be preserved for two years and payroll records must be kept for three years. Employers must also record certain identifying information for employees including their name in full, their social security number, and the dates of birth for employees under age 19.

Exemptions: Certain employees whose primary duties are managerial, administrative, or professional in nature, as specifically defined by the Department of Labor, may be exempt from the FLSA’s minimum wage and overtime pay requirements.

Youth Employment: The FLSA sets a minimum age of 14 for most youth employed in covered non-agricultural employment. Fourteen- and 15-year-olds can work for limited periods of time each day (outside school hours) in specified occupations which do not interfere with their schooling, health, or well-being. Sixteen- and 17-year-olds may work at any time for unlimited hours in all jobs that have not been declared hazardous by the Secretary of Labor.

Common Industry Problems

Recordkeeping – Failure to keep accurate records of daily and weekly hours worked.

Uncompensated Time -Failure to pay for all the hours that an employee works. Non-exempt employees must be compensated for any time that they perform activities required or permitted by the employer.

• Employees working tours of duty of less than 24 hours must be paid for sleep time. Certain special conditions apply to employees residing on the premises for extended periods of time and their relief workers which may allow the employers to deduct up to eight hours of sleep time per day in some cases.
• Employees required or permitted to perform duties during normal “off-duty” time must be compensated.
• Employees must be paid for attendance at staff meetings and most training programs.
• Family members (husband and wife, for example), who work together must each receive proper compensation for the hours he/she worked.

Regular Rate – Failure to properly calculate employees’ regular rate of pay (base for computing time-and-one-half overtime premium).

September 2013

This fact sheet provides general information concerning the application of the FLSA companionship services exemption in the home health care industry. The following information applies to the home health care industry until January 1, 2015. As of that date, revised regulations regarding the companionship services become effective. For information on the new regulations see Fact Sheet: Application of the Fair Labor Standards Act to Domestic Service; Final Rule. The following information applies to the home health care industry until the new regulations are in effect.

Characteristics

Employers who provide home health care services for individuals who (because of age or infirmity) are unable to care for themselves may or may not be required to pay minimum wage and/or overtime premium pay depending upon the type of services provided and the nature of the working relationship. Employees providing “companionship services” as defined by the FLSA need not be paid the minimum wage or overtime. Trained personnel such as nurses, whether registered or practical, are not exempt from minimum wage or overtime under the exemption for companions, but registered nurses may be exempt as professionals. Certified nurse aides and home health care aides may be considered exempt from the FLSA’s wage requirements depending upon the nature of their work. Please see Fact Sheet #17N for additional information on nursing exemptions.

Requirements

Persons employed in domestic service in households are covered by the FLSA. Nurses, certified nurse aides, home health care aides, and other individuals providing home health care services fall within the term “domestic service employment.”

An employee who performs companionship services in or about the private home of the person by whom he/she is employed is exempt from the FLSA’s minimum wage and overtime requirements if all criteria of the exemption are met. “Companionship services” means services for the care, fellowship, and protection of persons who because of advanced age or physical or mental infirmity cannot care for themselves. Such services include household work for aged or infirm persons including meal preparation, bed making, clothes washing and other similar personal services. General household work is also included, as long as it does not exceed 20 percent of the total weekly hours worked by the companion. Where this 20 percent limitation is exceeded, the employee must be paid for all hours in compliance with the minimum wage and overtime requirements of the FLSA.

The term “companionship services” does not include services performed by trained personnel such as registered or practical nurses. Registered nurses are exempt from the FLSA’s wage requirements where their time is spent in the performance of the duties of a nurse and are paid on a salary or a “fee basis” as defined by Regulations, 29 CFR Part 541

.

Individuals other than trained personnel (such as nurses) who attend to invalid infants and young children are considered companions, rather than babysitters, and their status may thus be within the companion exemption.

FS 25 Covered domestic service employees who reside in the household where they are employed are entitled to the minimum wage but may be exempt from the Act’s overtime requirements.

Typical Problems

An employee hired as a companion to an aged individual with a physical infirmity spends more than 20 percent of his/her time doing general household work. That person must be paid at least the minimum wage and one and one-half the regular rate of pay for hours in excess of forty in a workweek.

An employee who provides care and protection for minor children, where the children are not physically or mentally infirm, must be paid the minimum wage and proper overtime compensation. This activity would not constitute exempt companionship services.

Revised September 2019

On April 26, 2024, the U.S. Department of Labor (Department) published a final rule, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees

, to update and revise the regulations issued under section 13(a)(1) of the Fair Labor Standards Act implementing the exemption from minimum wage and overtime pay requirements for executive, administrative, and professional employees. Revisions included increases to the standard salary level and the highly compensated employee total annual compensation threshold, and a mechanism for updating these earnings thresholds to reflect current earnings data. On November 15, 2024, the U.S. District Court for the Eastern District of Texas vacated the Department’s 2024 final rule. Consequently, with regard to enforcement, the Department is applying the 2019 rule’s minimum salary level of $684 per week and total annual compensation requirement for highly compensated employees of $107,432 per year. Lawsuits regarding the 2024 final rule are currently pending in two other federal district courts, and the United States has filed a notice of appeal from the November 15 decision. The Department will update this notice with additional information as it becomes available.

This fact sheet provides general information on the exemption from minimum wage and overtime pay provided by Section 13(a)(1) of the FLSA as defined by Regulations, 29 C.F.R. Part 541

.

The FLSA requires that most employees in the United States be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek.

However, Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees. Section 13(a)(1) and Section 13(a)(17) also exempt certain computer employees. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $684 per week. Employers may use nondiscretionary bonuses and incentive payments (including commissions) paid on an annual or more frequent basis, to satisfy up to 10 percent of the standard salary level. Job titles do not determine exempt status. In order for an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the Department’s regulations.

See other fact sheets in this series for more information on the exemptions for executive, administrative, professional, computer and outside sales employees, and for more information on the salary basis requirement.

Executive Exemption

To qualify for the executive employee exemption, all of the following tests must be met:

• The employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $684 per week;
• The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
• The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
• The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

Administrative Exemptions

To qualify for the administrative employee exemption, all of the following tests must be met:

• The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week;
• The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
• The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

Professional Exemption

To qualify for the learned professional employee exemption, all of the following tests must be met:

• The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week;
• The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
• The advanced knowledge must be in a field of science or learning; and
• The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

To qualify for the creative professional employee exemption, all of the following tests must be met:

• The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week;
• The employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.

Computer Employee Exemption

To qualify for the computer employee exemption, the following tests must be met:

• The employee must be compensated either on a salary or fee basis (as defined in the regulations) at a rate not less than $684 per week or, if compensated on an hourly basis, at a rate not less than $27.63 an hour;
• The employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties described below;
• The employee’s primary duty must consist of:
  1. The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;
  2. The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;
  3. The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or
  4. A combination of the aforementioned duties, the performance of which requires the same level of skills.

Outside Sales Exemption

To qualify for the outside sales employee exemption, all of the following tests must be met:

• The employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and
• The employee must be customarily and regularly engaged away from the employer’s place or places of business.

Highly Compensated Employees

Highly compensated employees performing office or non-manual work and paid total annual compensation of $107,432 or more (which must include at least $684 per week paid on a salary or fee basis) are exempt from the FLSA if they customarily and regularly perform at least one of the duties of an exempt executive, administrative or professional employee identified in the standard tests for exemption.

Blue-Collar Workers

The exemptions provided by FLSA Section 13(a)(1) apply only to “white-collar” employees who meet the salary and duties tests set forth in the Part 541 regulations. The exemptions do not apply to manual laborers or other “blue-collar” workers who perform work involving repetitive operations with their hands, physical skill and energy. FLSA-covered, non-management employees in production, maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, construction workers and laborers are entitled to minimum wage and overtime premium pay under the FLSA, and are not exempt under the Part 541 regulations no matter how highly paid they might be.

Police, Fire Fighters, Paramedics & Other First Responders

The exemptions also do not apply to police officers, detectives, deputy sheriffs, state troopers, highway patrol officers, investigators, inspectors, correctional officers, parole or probation officers, park rangers, fire fighters, paramedics, emergency medical technicians, ambulance personnel, rescue workers, hazardous materials workers and similar employees, regardless of rank or pay level, who perform work such as preventing, controlling or extinguishing fires of any type; rescuing fire, crime or accident victims; preventing or detecting crimes; conducting investigations or inspections for violations of law; performing surveillance; pursuing, restraining and apprehending suspects; detaining or supervising suspected and convicted criminals, including those on probation or parole; interviewing witnesses; interrogating and fingerprinting suspects; preparing investigative reports; or other similar work.

Other Laws & Collective Bargaining Agreements

The FLSA provides minimum standards that may be exceeded, but cannot be waived or reduced. Employers must comply, for example, with any Federal, State or municipal laws, regulations or ordinances establishing a higher minimum wage or lower maximum workweek than those established under the FLSA. Similarly, employers may, on their own initiative or under a collective bargaining agreement, provide a higher wage, shorter workweek, or higher overtime premium than provided under the FLSA. While collective bargaining agreements cannot waive or reduce FLSA protections, nothing in the FLSA or the Part 541 regulation relieves employers from their contractual obligations under such bargaining agreements.

Where to Obtain Additional Information

Under the FLSA, a tipped employee is an employee engaged in an occupation in which they customarily and regularly receive more than $30 a month in tips.  This Fact Sheet provides general information concerning the application of the FLSA to tipped employees, whether an employer pays the full minimum wage or takes a credit against the tips earned by the employee towards its minimum wage obligations.

Tip Credit: The FLSA permits an employer to take a tip credit toward its minimum wage and overtime obligation(s) for tipped employees per Section 3(m)(2)(A).  An employer that claims a tip credit must ensure that the employee receives enough tips from customers, and direct (or cash) wages per workweek to equal at least the minimum wage and overtime compensation required under the FLSA.

An employer must pay a tipped worker at least $2.13 per hour under the FLSA.  An employer can take an FLSA tip credit equal to the difference between the direct wage, or the cash wage it pays directly to the tipped employee, and the federal minimum wage, which is currently $7.25 per hour.  The maximum tip credit that an employer can currently claim is $5.12 per hour: ($7.25 – $2.13 direct (or cash) wage = $5.12).  Only tips actually received by the employee count when determining whether the employee is a tipped employee and in applying the tip credit.

Employers claiming a tip credit must be able to show in each workweek that tipped employees receive at least the full federal minimum wage when direct (or cash) wages and the tip credit amount are combined.  If an employee’s tips combined with the employer’s direct (or cash) wages do not equal the minimum hourly wage of $7.25 per hour in each workweek, the employer must make up the difference. 

Notice to Tipped Employees: Employers must provide the following information to tipped employees before taking a tip credit under the FLSA:

1. the amount of the direct (or cash) wage the employer is paying a tipped employee, which must be at least $2.13 per hour;
2. the additional amount claimed by the employer as a tip credit, which cannot exceed $5.12 (the difference between the minimum required direct (or cash) wage of $2.13 and the current minimum wage of $7.25);
3. that the tip credit claimed by the employer cannot exceed the amount of tips actually received by the tipped employee;
4. that all tips received by the tipped employee are to be retained by the employee except for a valid tip pooling arrangement limited to employees who customarily and regularly receive tips; and
5. that the tip credit will not apply to any tipped employee unless the employee has been informed of these tip credit provisions.

Employers may provide oral or written notice to tipped employees informing them of items 1-5 above.  An employer that fails to provide the required information cannot take the section 3(m)(2)(A) tip credit.

Interaction with State Laws: When state law differs from the federal FLSA, an employer must comply with the standard most protective to employees.  For example, some states require a higher cash wage than the federal direct (or cash) wage of $2.13 per hour or in some cases prohibit the taking of a tip credit.  Links to your state labor department can be found at https://www.dol.gov/agencies/whd/state/contacts.

Employers, Including Managers and Supervisors, May Not “Keep” Tips: Regardless of whether an employer takes a tip credit, the FLSA prohibits employers from keeping any portion of employees’ tips for any purpose, whether directly or through a tip pool.  An employer may not require an employee to give their tips to the employer, a supervisor, or a manager, even where a tipped employee receives at least the federal minimum wage (currently $7.25) per hour in wages directly from the employer and the employer takes no tip credit.

Managers and supervisors include any employee (1) whose primary duty is managing the enterprise or a customarily recognized department or subdivision of the enterprise; (2) who customarily and regularly directs the work of at least two or more other full-time employees or their equivalent; and (3) who has the authority to hire or fire other employees, or whose suggestions and recommendations as to the hiring or firing are given particular weight.  Business owners who own at least a bona fide 20 percent equity interest in the enterprise in which they are employed and who are actively engaged in its management are also managers and supervisors who may not keep employees’ tips.  

A manager or supervisor may keep only those tips that they receive directly from a customer for the service they directly and solely provide.  For example, a restaurant manager who serves their own tables may keep their own tips from customers they served but would not be able to receive other employees’ tips by participating in a tip pool.

Tip pooling: The FLSA allows employers to require employees to share or “pool” tips with other eligible employees.  The FLSA does not impose a limit on the percentage or amount of the contribution of each employee in valid mandatory tip pools.  As explained below, the rules governing tip pools depend on whether the employer pays a direct (or cash) wage equal to the full minimum wage to tipped employees or not.

Traditional Tip Pooling: An employer that takes a tip credit can require tipped employees to contribute tips only

to a tip pool which is limited to employees in occupations in which they customarily and regularly receive tips, such as waiters, bellhops, counter personnel (who serve customers), bussers, and service bartenders.  This is sometimes known as a “traditional” tip pool.  An employer that implements a traditional tip pool must notify tipped employees of any required tip pool contribution amount, may only take a tip credit for tips each tipped employee ultimately receives, and may not retain any of the employees’ tips for any other purpose.  An employer may not receive tips from such a tip pool and may not allow managers and supervisors to receive tips from the pool. 

Other Tip Pooling: When an employer pays its employees a cash wage of at least the federal minimum wage (currently $7.25) per hour, the employer may impose a mandatory tip pooling arrangement that includes employees who are not employed in an occupation in which employees customarily and regularly receive tips.  This is sometimes known as a “nontraditional” tip pool.  For example, an employer that implements a nontraditional tip pool may require tipped employees, such as servers, to share tips with non-tipped employees, such as dishwashers and cooks, but only if all workers receive a direct cash wage of at least the federal minimum wage.  In addition, an employer may not receive tips from such a tip pool and may not allow managers and supervisors to receive tips from the pool. 

Distributing Tips from Tip Pools: When an employer collects tips to administer a tip pool, the employer must fully distribute any collected tips at the regular payday for the workweek, or, for pay periods of more than one workweek, at the regular payday for the period in which the particular workweek ends.  To the extent an employer cannot determine the amount of tips received or how tips should be distributed before processing payroll, those tips must be distributed to employees as soon as practicable after the regular payday.

Dual Jobs: In some situations an employee is employed in a dual job, as for example, where a maintenance person in a hotel also serves as a server. In such a situation the employee, if they customarily and regularly receive at least $30 a month in tips for their work as a server, is a tipped employee only with respect to their employment as a server. The worker is employed in two occupations, and no tip credit can be taken for their hours of employment in their occupation as a maintenance person.

Such a situation is distinguishable from that of a server who spends part of their time cleaning and setting tables, toasting bread, making coffee and occasionally washing dishes or glasses. It is likewise distinguishable from the counterperson who also prepares their own short orders or who, as part of a group of counter staff, takes a turn as a short order cook for the group. Such related duties in an occupation that is a tipped occupation need not by themselves be directed toward producing tips.

Credit Cards: Under the FLSA, when tips are charged on customers’ credit cards and the employer can show that it pays the credit card company a percentage on such sales as a fee for payment using a credit card, the employer may pay the employee the tip, less that percentage.  For example, where a credit card company charges an employer 3 percent on all sales charged to its credit service, the employer may pay the tipped employee 97 percent of the tips without violating the FLSA.  

However, the employer cannot reduce the amount of tips paid to the employee by any amount greater than the transactional fee charged by the credit card company, regardless of whether or not it takes a tip credit.  Doing so would be a keeping violation under section 3(m)(2)(B).  Additionally, this transactional fee may not reduce the employee’s wage below the required minimum wage, including the amount of any tip credit claimed.  Under federal law, the amount due the employee must be paid no later than the regular pay day and may not be held while the employer is awaiting reimbursement from the credit card company.  Note: Some states may have more protective laws regarding tips charged to credit cards which do not allow the employer to deduct credit card fees from employees’ tips.

Service Charges: A compulsory charge for service, for example, 15 percent of the bill, is not considered a tip under the FLSA.  Sums distributed to employees from service charges are not tips, but may be used to satisfy the employer’s minimum wage and overtime pay obligations under the FLSA.  Further, these sums are part of the employee’s total compensation and must be included in the regular rate of pay for computing overtime.  If an employee receives tips in addition to the compulsory service charge, those tips may be considered in determining whether the employee is a tipped employee and in the application of the tip credit.

Recordkeeping: An employer that takes a tip credit must keep records of: (1) each employee whose wage is determined in part by tips; (2) the weekly or monthly amount reported by the employee, to the employer, of tips received; (3) the amount by which the wages of each tipped employee have been deemed to be increased by tips as determined by the employer; (4) hours worked each workday in any occupation in which the employee does not receive tips, and total daily or weekly straight-time payment made by the employer for such hours; and (5) hours worked each workday in occupations in which the employee receives tips, and total daily or weekly straight-time earnings for such hours.

An employer that does not take a tip credit, but still operates a mandatory tip pool, must keep records of each employee who receives tips, and the weekly or monthly amount of tips received by each employee.

Typical Problems

Minimum Wage Problems:

• An employee does not receive sufficient tips to make up the difference between the direct (or cash) wage payment (which must be at least $2.13 per hour) and the minimum wage in each workweek.    The employer must make up the difference at the regular payday for the period in which the workweek ends.
• An employee receives only tips and is paid no direct (or cash) wage.  The employer must comply with the requirements for taking a tip credit and pay a direct (cash) wage of at least $2.13 an hour or must pay a direct (or cash) wage equal to the full minimum wage, which is currently $7.25 an hour. 
• Deductions for walkouts, breakage, or cash register shortages reduce the employee’s wages below the minimum wage.  Such deductions are illegal where an employer claims an FLSA 3(m)(2)(A) tip credit because any such deduction would reduce the tipped employee’s wages below the minimum wage.

Overtime Problems:

• An employer that takes a tip credit by paying a direct (or cash) wage less than the minimum wage erroneously calculates the overtime premium using only the reduced direct (or cash) wage paid.  When an employer takes a tip credit, overtime must be calculated based on the full minimum wage, which is currently $7.25 an hour, not the lower direct (or cash) wage payment.  The employer may not take a larger FLSA 3(m)(2)(A) tip credit for an overtime hour than for a straight time hour.  Under certain circumstances, an employer may be able to claim an additional overtime tip credit against its overtime obligations.
• An employer does not include all service charges, commissions, bonuses, and other remuneration in the regular rate for purposes of computing overtime pay.

Tip Pooling Problems:

• A tipped employee receives less than the federal minimum wage (currently $7.25) per hour as a direct (or cash) wage and is required to contribute to a tip pool that includes employees who do not customarily and regularly receive tips, such as cook or dishwasher.  When the employer takes a tip credit, the employer can require the employee to share tips only with those employees who customarily and regularly receive tips, such as a server or bartender.  
• An employee is required to share tips with a manager or supervisor, regardless of whether the employer takes a tip credit for the tipped employee.  An employer who violates the FLSA by requiring tipped employees to share their tips with a manager or supervisor may be required to return the tips to the employee and pay the full minimum wage.

January 2025

This fact sheet provides general information concerning the application of the Fair Labor Standards Act (“FLSA” or “Act”) to agricultural employment. The FLSA is the federal law which sets minimum wage, overtime, recordkeeping, and child labor standards.

Coverage

Virtually all employees engaged in agriculture as it is defined under the FLSA are covered by the Act in that they produce goods for interstate commerce.

The definition of agriculture under the FLSA has two distinct branches: primary agriculture and secondary agriculture.

1. Primary agriculture includes farming in all its branches (e.g., the cultivation and tillage of the soil; dairying; the production, cultivation, growing, and harvesting of any agricultural or horticultural commodities; and the raising of livestock, bees, fur-bearing animals, or poultry).
2. Secondary agriculture includes all practices, including forestry or lumbering operations, performed by a farmer or on a farm, and as an incident to or in conjunction with such farming operations. For example, a farm’s activities of cutting or freezing its own (i.e., those produced or raised by the farmer or on its farm) fruits, vegetables, and meat, without adding any ingredients, may be secondary agriculture.

Employment that is not within the scope of either primary or secondary agriculture is not employment in agriculture under the FLSA.

Exemptions from Minimum Wage and Overtime

There are certain exemptions under the FLSA that do not require specific employees engaged in agriculture to be paid minimum wage, overtime pay, or both. An employee’s exempt status is contingent upon the duties that the employee performs each workweek (i.e., a fixed, recurring, seven consecutive day period). Thus, whether an employee is exempt from the minimum wage and overtime protections of the FLSA is assessed on a workweek basis, and each workweek is assessed independently of other workweeks.

Employees who are employed in agriculture as that term is defined in the Act are exempt from the overtime pay provisions. They do not have to be paid time and one-half their regular rates of pay for hours worked over forty per week under the FLSA.

Any employer in agriculture who did not utilize more than 500 “man days” of agricultural labor in any calendar quarter of the preceding calendar year does not have to pay minimum wage and overtime pay to any employee employed in agriculture for the subsequent calendar year under the FLSA. A “man day” is defined as any day during which an employee performs agricultural work for at least one hour.

Additional exemptions from the minimum wage and overtime provisions of the Act for agricultural employees apply to the following:

• Agricultural employees who are immediate family members of their employer.
• Those principally engaged on the range in the production of livestock.
• Local hand harvest laborers who commute daily from their permanent residence, are paid on a piece rate basis in traditionally piece-rated occupations and were engaged in agriculture less than thirteen weeks during the preceding calendar year.
• Minors, 16 years of age or under, who are hand harvesters, paid on a piece rate basis in traditionally piece-rated occupations, employed on the same farm as their parent or person standing in the place of their parent, and paid the same piece rate as those over 16 years of age.

Requirements

Although exempt from the overtime requirements of the FLSA, agricultural employees must be paid at least the federal minimum wage (unless exempt from minimum wage as noted above). There are numerous restrictions on the employment of minors less than 16 years of age, particularly in occupations declared hazardous by the Secretary of Labor. Substantial civil money penalties are prescribed for violations of the monetary and child labor provisions of the law. The FLSA also requires that specified records be kept.

Typical Problems

• Not keeping/maintaining records of the names and permanent addresses of temporary agricultural employees, dates of birth of minors under age 19 years old, or hours worked by employees being paid on a piece rate basis.
• Failing to pay overtime to employees whose jobs are related to agriculture but do not meet the definition of agriculture contained in the Act. For example, someone working in a packing shed on a farm who also packs and/or stores commodities that have been produced on a different farm are not considered to be engaged in agriculture.
• Agricultural employers who utilize the services of a farm labor contractor are almost always in a situation of joint employment with the contractor in regard to the employees. Joint employment means that both the farm labor contractor and the farmer are responsible for complying with the minimum wage, overtime, recordkeeping, and youth employment provisions of the law. If either party fails to comply with the law both parties may be held liable.
• Finally, most agricultural employers, agricultural associations, and farm labor contractors are subject to another statute, also administered by the Wage and Hour Division — the Migrant and Seasonal Agricultural Worker Protection Act. Employers in agriculture or agriculture-related businesses should ascertain how this law applies to their operations.

Revised December 2016

This fact sheet provides general information concerning the application of the FLSA to employees of restaurants and fast food establishments.

Characteristics

The restaurant/fast food industry includes establishments which are primarily engaged in selling and serving to purchasers prepared food and beverages for consumption on or off the premises.

Coverage

Restaurants/fast food businesses with annual gross sales from one or more establishments that total at least $500,000 are subject to the FLSA. Also, any person who works on or otherwise handles goods that are moving in interstate commerce is individually subject to the minimum wage and overtime protection of the FLSA. For example, a waitress or cashier who handles a credit card transaction would likely be subject to the Act.

Requirements

Minimum wage: Covered non-exempt workers are entitled to a federal minimum wage of not less than $7.25 per hour effective July 24, 2009. Wages are due on the regular payday for the pay period covered. Deductions made from wages for items such as cash shortages, required uniforms, or customer walk-outs are illegal if the deduction reduces the employee’s wages below the minimum wage or cuts into overtime pay. Deductions made for items other than board, lodging, or other recognized facilities normally cannot be made in an overtime workweek. Tips may be considered as part of wages, but the employer must pay not less than $2.13 an hour in direct wages and make sure that the amount of tips received is enough to meet the remainder of the minimum wage.

Food Credit: The employer may take credit for food which is provided at cost. This typically is an hourly deduction from an employee’s pay. However, the employer cannot take credit for discounts given employees on food (menu) prices.

Tips: Tipped employees are those who customarily and regularly receive more than $30 a month in tips. Employees must be informed of the provisions of FLSA section 3(m) in advance if the employer elects to use the tip credit. Also, employees must retain all of their tips, except to the extent that they participate in a valid tip pooling or sharing arrangement.

Overtime: Overtime must be paid at a rate of at least one and one-half times the employee’s regular rate of pay for each hour worked in excess of 40 hours per week. In determining the regular rate for a tipped employee, all components of the employee’s wages must be considered (i.e., cash, board, lodging, facilities, and tip credit).

Youth Minimum Wage: The 1996 Amendments to the FLSA allow employers to pay a youth minimum wage of not less than $4.25 an hour to employees who are under 20 years of age during the first 90 consecutive calendar days after initial employment by their employer. The law contains certain protections for employees that prohibit employers from displacing any employee in order to hire someone at the youth minimum wage.

Youth Employment

Youths 14 and 15 years old may work outside school hours in various non-hazardous jobs only under the following conditions: no more than 3 hours on a school day, 18 hours in a school week, 8 hours on a non-school day, or 40 hours in a non-school week. Also, work may not begin before 7 a.m., nor end after 7 p.m., except from June 1 through Labor Day, when evening hours are extended to 9 p.m. Permitted occupations for 14 and 15 year old employees include those such as cashier, office/clerical work, bagging orders, cleanup work, hand-cleaning vegetables, etc. Cooking and baking cannot generally be performed by minors under age 16.

Youths 16 and 17 years old may perform any non-hazardous job, for unlimited hours. Examples of equipment declared hazardous in restaurants include power-driven meat processing machines (saws, patty forming machines, grinding, chopping or slicing machines), commercial mixers, and certain power-driven bakery machines. Employees under 18 are not permitted to operate, feed, set-up, adjust, repair or clean such machines. Generally, no employee under 18 years of age may drive or serve as an outside-helper on a motor vehicle on a public road; but 17-year-olds who meet certain specific requirements may drive automobiles and trucks that do not exceed 6,000 pounds gross vehicle weight for limited amounts of time as part of their job. Such minors are, however, prohibited from making time sensitive deliveries (such as pizza deliveries or other trips where time is of essence) and from driving at night.

Typical Problems

If uniforms are required by the employer the cost of the uniform is considered to be a business expense of the employer. If the employer requires the employee to bear the cost, such cost may not reduce the employee’s wages below the minimum wage or cut into overtime compensation. When an employer claims an FLSA 3(m) tip credit, the tipped employee is considered to have been paid only the minimum wage for all non-overtime hours worked in a tipped occupation and the employer may not take deductions for walkouts, cash register shortages, breakage, cost of uniforms, etc., because any such deduction would reduce the tipped employee’s wages below the minimum wage.

Exemptions from Overtime: Section 13(a)(1) of the FLSA provides an exemption from FLSA monetary requirements for an employee employed in a bona fide executive, administrative or professional capacity or as an outside salesperson. An employee will qualify for exemption if all pertinent tests relating to duties, responsibilities and salary, as set forth in Regulations, 29 CFR Part 541

, are met. The salary and duties tests for the exemptions are fully described in Regulations Part 541.

Where to Obtain Additional Information