The Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., is the foundational federal wage and hour law. Originally passed in 1938, it has been amended repeatedly. The Department of Labor's Wage and Hour Division enforces it.
Key provisions relevant to tipped and gig workers:
- Section 6: federal minimum wage ($7.25/hr since 2009)
- Section 3(m): tip credit allowance, currently $5.12 (federal direct wage = $7.25 - $5.12 = $2.13)
- Section 3(t): definition of "tipped employee" (customarily and regularly receives $30+/month in tips)
- Section 203(m)(2)(B): tip pool rules — managers cannot share in tips; non-traditional pools (BOH inclusive) require no tip credit
- Section 7: overtime — 1.5× the regular rate for hours over 40 in a workweek
The FLSA only sets federal floors. States can require more — higher minimum wage, higher tipped wage, stricter tip pool rules, stricter classification tests. Where state law is more protective, it controls. Where state law is silent or weaker, federal FLSA applies.
The FLSA does NOT govern independent contractors. 1099 workers are not "employees" under the Act and have no FLSA minimum-wage or overtime protections.