If you read this blog, attend presentations on wage and hour issues, or just shudder every time you read about another overtime or minimum wage lawsuit, you might assume that all employees are covered by the federal Fair Labor Standards Act (FLSA) and its regulations. However, in some rare circumstances, the FLSA may not cover very small and, importantly, local businesses, meaning that those businesses’ employees may not be entitled to the minimum wage or overtime pay under the FLSA. A quick warning before we start: as we have highlighted in the past, though, most states and an increasing number of local governments do not provide exemptions from state and local minimum wage laws, even for small businesses. With a very few exceptions, the fact that the FLSA does not apply only resolves one half of the question; you almost certainly still have to contend (and comply) with state and local laws, that may have different standards and penalties.
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