7 Top Exemptions From Federal Minimum Wage Laws (& How They Affect You)

Since the 1930s, the federal government has set minimum wages through legislation that applies to all states in the United States. These laws cover more than just hourly rates; they also requsire overtime pay at one and half times an employee’s standard hourly rate. However, not every job or employee is subject to these laws, meaning there are a number of top exemptions from federal minimum wage laws in place today.

If you’re interested in learning more about these seven exemptions, how they affect you and other workers and how to stay compliant with these laws, keep reading this article to learn more!

1) Child Labor

According to the Fair Labor Standards Act (FLSA), there are certain occupations that children are not allowed to perform. The following are considered hazardous: manufacturing and mining, operating some power-driven machinery, and working with certain chemicals. These top over-time rules help protect children from exploitation and harm.

2) Live-in Home Care

Many people don’t know that live-in home care is one of the top exemptions from federal minimum wage laws. This means that if you’re a live-in home care worker, your employer isn’t required to pay you the federal minimum wage. However, this exemption only applies if you’re providing care for someone who is unable to care for themselves.

If you’re providing care for a child or an adult who is able to care for themselves, your employer must pay you at least the federal minimum wage.

3) Nonprofit Organization Employees

Employees of nonprofit organizations are exempt from the federal minimum wage laws. However, they are still entitled to receive overtime pay if they work more than 40 hours in a week.

The top Overtime rules for nonprofit employees are:

  1. employees must be paid at least the minimum wage for all hours worked;
  2. employees must be paid
  3. times their regular rate of pay for all hours worked over 40 in a week; and
  4. employees may not be required to work more than 48 hours in a week.

4) Accommodation for People with Disabilities

The Americans with Disabilities Act (ADA) prohibits discrimination against qualified individuals with disabilities in the workplace. Under the ADA, employers must provide reasonable accommodations to employees with disabilities, unless doing so would impose an undue hardship on the business.

Reasonable accommodations may include but are not limited to, making the workplace accessible for wheelchair users, providing assistive technology, or making changes to work schedules.

5) Seasonal Agricultural Workers

Seasonal agricultural workers are exempted from the federal minimum wage laws. This means that they can be paid less than the minimum wage. However, they are still entitled to overtime pay if they work more than 40 hours in a week.

The top Over time rules exemption is for seasonal agricultural workers. This means that if you work in agriculture, you may be paid less than the minimum wage.

6) Credit Union Service Organizations

Credit unions are member-owned, not-for-profit organizations that provide financial services to their members. Credit union service organizations (CUSOs) are businesses owned by credit unions that provide services to credit unions and their members. CUSOs are exempt from the federal minimum wage laws and overtime rules.

This means that CUSOs can pay their employees less than the minimum wage and do not have to pay overtime. This can be a good thing or a bad thing depending on your perspective.

7) Tips and Gratuities

Tipped employees are those who regularly receive more than $30 per month in tips. The Fair Labor Standards Act (FLSA) states that employers may pay a reduced hourly wage of $2.13 per hour provided that the employee’s tips make up the difference between this reduced wage and the federal minimum wage of $7.25 per hour. Overtime rules do not apply to tipped employees.

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