Introduction
The Fair Labor Standards Act (FLSA) is one of the most frequently violated labor laws in the United States. Even well‑intentioned employers make mistakes that lead to costly back wages, penalties, and multi‑year liability. As a former U.S. Department of Labor Wage & Hour Investigator, I’ve seen the same errors repeated across industries — and most of them are preventable.
Below are the top 10 FLSA mistakes employers make and how to avoid them.
1. Misclassifying Employees as Exempt
Many employers assume that paying a salary automatically makes an employee exempt from overtime. It doesn’t. Exempt status requires meeting:
- Salary basis
- Salary level
- Duties test
Failing any one of these means the employee is non‑exempt and must receive overtime.
Related Service: FLSA Compliance Consulting
2. Incorrect Regular Rate Calculations
The regular rate includes more than hourly wages. It must include:
- Bonuses
- Incentives
- Commissions
- Shift differentials
- Piece‑rate earnings
Incorrect regular rate calculations are one of the most common violations WHD finds.
3. Off‑the‑Clock Work
Employees must be paid for all hours worked, even if:
- The work was not authorized
- The employee worked before or after their shift
- The employee worked through breaks
- The employee checked emails or messages after hours
If the employer “knew or should have known,” the time must be paid.
4. Automatic Meal Deductions
Automatic deductions often lead to unpaid work time when employees:
- Work through lunch
- Are interrupted during lunch
- Are required to remain on duty
If the employee isn’t fully relieved of duties, the meal period is compensable.
5. Day‑Rate or Piece‑Rate Pay Errors
Day‑rate and piece‑rate workers are still entitled to overtime. Employers often fail to:
- Convert earnings into a regular rate
- Pay overtime at 1.5 × the regular rate
- Maintain accurate time records
This is a major red flag for WHD.
6. Inaccurate or Missing Time Records
The FLSA requires employers to maintain accurate records of:
- Hours worked
- Breaks
- Pay rates
- Overtime
If records are missing, WHD will reconstruct them — usually based on employee statements.
7. Improper Use of Independent Contractors
Misclassification can lead to:
- Back wages
- Overtime liability
- Tax issues
- Penalties
WHD uses the “economic reality test,” not job titles or contractor agreements.
8. Not Paying for Travel Time
Travel time is compensable when:
- It occurs during the workday
- It is required by the employer
- It benefits the employer
This includes travel between job sites.
9. Not Paying for Training or Meetings
If training is:
- Required
- Job‑related
- During work hours
…it must be paid.
10. Not Preparing for a DOL Investigation
Most employers wait until WHD arrives to think about compliance. By then, it’s too late to fix issues quietly.
Proactive audits can prevent:
- Back wages
- Penalties
- Liquidated damages
- Multi‑year liability
How Employers Can Avoid These Mistakes
- Conduct regular payroll audits
- Review exempt classifications
- Verify regular rate calculations
- Ensure accurate timekeeping
- Train supervisors on wage and hour rules
- Review pay practices annually
Related Services
- FLSA Compliance Consulting
- H‑2A Compliance Consulting
- SCA Compliance Consulting
- DBA Compliance Consulting
- DOL Audit Defense
Conclusion
FLSA compliance doesn’t have to be complicated — but it does require attention to detail. By understanding the most common mistakes and taking proactive steps, employers can significantly reduce their risk.
If you want help reviewing your pay practices or preparing for a potential DOL investigation, I’m here to assist.