Who the FLSA covers

Before any question about the federal minimum wage or overtime arises, there is a prior one: does the Fair Labor Standards Act reach this job at all? The Act answers it two ways. A worker is covered if the employer is a covered enterprise, or, failing that, if the worker’s own duties put them in interstate commerce. DOL’s fact sheet puts the covered workforce at more than 143 million people.

Enterprise coverage

Section 3(s) of the Act defines an “enterprise engaged in commerce or in the production of goods for commerce.” A business qualifies if it has employees handling, selling or working on goods or materials that have moved in or been produced for commerce, and its annual gross volume of sales or business done is at least $500,000, excluding separately stated retail excise taxes. Almost any business buys supplies that crossed a state line, so in practice the dollar test is the one that matters. DOL’s fact sheet adds that a covered enterprise must have at least two employees.

Three kinds of organizations are covered enterprises regardless of their revenue: hospitals and institutions caring for residents who are sick, aged or disabled; schools, from preschools through universities, whether public or private, for profit or not; and public agencies. The statute defines a public agency to include the federal government, states and their political subdivisions, and the United States Postal Service.

The statute also carves out one establishment type: a business whose only regular employees are the owner and the owner’s immediate family is not a covered enterprise, and its sales do not count toward another enterprise’s volume.

Individual coverage

When the employer is not a covered enterprise, an individual employee is still covered if their work regularly involves interstate commerce or the production of goods for it. DOL’s examples include assembling parts for goods that will ship out of state, typing letters that will, regularly phoning people in other states, handling records of interstate transactions, traveling across state lines for work, and cleaning a building where goods are made for out-of-state shipment. The fact sheet notes that domestic service workers such as housekeepers, full-time babysitters and cooks are normally covered.

Coverage is not the same as entitlement

Being covered means the Act applies; it does not by itself mean the minimum wage or overtime is owed. Section 13 lists exemptions that remove some covered employees from the minimum wage, from overtime, or from both. Those tests are summarized in exempt versus non-exempt. The order of analysis is coverage first, then exemption.

Who is outside

The FLSA regulates employees. Independent contractors, by definition, are not employees and are not covered, which is why the classification question carries so much weight. A worker employed by a small, purely local business below the $500,000 line whose own duties never touch interstate commerce is outside federal coverage too, though such cases are narrower than they sound because of how broadly “commerce” is read.

State law fills gaps

Section 18 of the Act says that nothing in it excuses noncompliance with a federal or state law or a municipal ordinance setting a higher minimum wage or a shorter maximum workweek. State minimum wage laws have their own coverage rules, which often reach employers and workers the federal Act does not. The state tables on this site show each state’s rate as DOL lists it; a state’s coverage thresholds are in that state’s statute. Five states have no minimum wage law of their own, so in those states federal coverage is the only coverage; see federal versus state minimum wage.

In the wage data

OEWS does not ask whether a job is FLSA-covered, and the occupation and state tables include covered, exempt and uncovered workers alike. The distinction matters for reading the bottom of a distribution: a 10th percentile wage below the applicable minimum is not necessarily evidence of a violation, because the rows may include workers to whom that minimum does not apply.

What this page does not decide

Whether a particular employer meets the enterprise test, or whether a particular employee’s duties amount to engaging in commerce, turns on facts about that workplace. DOL’s fact sheet is the starting point; the Wage and Hour Division answers coverage questions directly.