Hourly Employee Working at Home Labor Laws

Overview

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  The Fair Labor Standards Act (FLSA) is a federal law that establishes national labor laws which apply to all hourly workers. Under the FLSA, all employees are entitled to a federal minimum wage; in addition, hourly employees are entitled to overtime pay. Many states, such as California, have adopted more stringent state labor laws governing workers in those states. Regardless of whether an employee works in an office or at home as a telecommuter, he is entitled to protection and benefits under the Fair Labor Standards Act and other applicable state laws.
  
  

Minimum Wage

• The minimum hourly wage for an employee, including telecommuting employees, under the Fair Labor Standards Act is $7.25 per hour as of September 2010. Some states such as California, Oregon, New Mexico and Vermont have a higher minimum hourly wage mandated by state law. To determine the minimum hourly wage in your state, visit the U.S. Department of Labor website listed in Resources below. Additionally, if a telecommuting employee works in a state different than where the employer is located, the employee must be paid the prevailing minimum wage in the worker's state and not the employer's state.
  
  

Overtime

• The FLSA requires that employees, including telecommuting employees, be paid overtime for any hours worked beyond 40 hours in a work week. A work week is defined as any period of seven consecutive days and does not necesarily have to start on a Monday and end on a Sunday. Under FLSA , overtime must be calculated at one-and-a-half times the employee's regularly hourly rate. All hourly employees are entitled to overtime pay.
  
  

Other Considerations

• Many telecommuting employees are not true employees but rather are classified as independent contractors. Independent contractors are not entitled to the benefits and protections provided by the Fair Labor Standards Act or state law. Those regulations only apply to bona fide hourly and salaried employees and not independent contractors.