Your Compliance Edge

Coverage of the FLSA

The FLSA applies to enterprises that have employees who are engaged in interstate commerce, producing goods for interstate commerce, or handling, selling or working on goods or materials that have been moved in or produced for interstate commerce.

  • For most firms, an annual dollar volume of business test applies (i.e., enterprises under this dollar amount are not covered). The following are covered by the Act regardless of their dollar volume of business: hospitals, institutions primarily engaged in the care of the sick, aged, mentally ill or disabled who reside on the premises; schools for children who are mentally or physically disabled or gifted; preschools, elementary and secondary schools and institutions of higher education; and federal, state and local government agencies.
  • Employees of firms that do not meet the annual dollar volume test may be individually covered in any workweek in which they are individually engaged in interstate commerce, the production of goods for interstate commerce, or an activity which is closely related and directly essential to the production of such goods.

 There are two ways in which an employee can be covered by the law: "enterprise coverage" and "individual coverage."

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