Glossary · Compliance
FLSA (Fair Labor Standards Act)
Federal law establishing minimum wage, overtime pay, recordkeeping, and youth-employment standards for private and public sector employment.
The FLSA defines exempt and non-exempt status, requires overtime at 1.5× the regular rate for non-exempt employees over 40 hours per workweek, and sets the federal minimum wage. State law often imposes more stringent standards.
Misclassification (incorrectly treating an employee as exempt or as an independent contractor) is the single largest source of FLSA liability. PEO HR support typically includes classification review.
Related terms
- Independent Contractor ClassificationThe legal determination of whether a worker is an employee or an independent contractor, governed by varying federal and state tests.
- AB5 (California Independent Contractor Law)California statute codifying the ABC test for distinguishing employees from independent contractors, with limited statutory exemptions.
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