Working time, time off work & minimum wage
United States
Employees entitled to minimum employment rights
Most employers are covered by the Fair Labor Standards Act (FLSA) which guarantees minimum wage and overtime pay for non-exempt employees. The most common exemptions are for executive, administrative, professional, outside sales or computer professional employees. To qualify for an exemption, an employee must be paid a fixed salary of at least USD684 per week (USD35,568 annually) and must meet the applicable "duties" test for the exemption at issue. On April 23, 2024, the Wage and Hour Division of the Department of Labor (“DOL”) issued its final rule regarding the executive, administrative and professional (“EAP”), and highly compensated employee (“HCE”) exemptions under the Fair Labor Standards Act (“FLSA”). The DOL made no changes to the duties tests for these exemptions. However, the DOL substantially increased the minimum salary and compensation thresholds for the EAP and HCE exemptions.
Some states and localities impose additional wage and hour requirements above the FLSA requirements; where state or local laws are more favorable to employees, the state law requirements will apply.
Working hours
There is no federal limit on the number of hours per day or per week that an employee over the age of 16 can work, although there are overtime pay requirements, as discussed below. There are restrictions on child labor and in certain professions (eg, airline pilots and drivers), and hours may be limited by a collective bargaining agreement with a labor union. In some states, certain employers are required to give their workers 1 day off each week under so-called “day of rest” laws or are required to pay workers at a premium rate for such work time. In addition, some states and localities have enacted predictive scheduling laws; while these vary in scope, the laws may regulate hours, notice of work schedules and predictability pay for schedule changes and on-call shifts.
Overtime
Generally, non-exempt employees must be paid 1.5 times their regular rate of pay for all hours worked in excess of 40 hours per week under the federal FLSA. Overtime must be calculated on a weekly basis and cannot be "averaged" over a period of 2 or more weeks. In some states, such as California, additional overtime is required in certain circumstances (eg, more than 8 hours per day).
Wages
All non-exempt employees must be paid at least the federal minimum wage, which presently is USD7.25 per hour. Covered federal contracts are generally subject to a higher minimum wage rate established by Executive Order. Some states and cities have higher minimum wage requirements – in many cases, well above the federal minimum wage – and additional states and localities have passed or have pending legislation that will raise the minimum wage in the coming years.
Vacation
There is no federal statutory requirement for private sector employers to provide paid vacation or holiday to any employees. In practice, most employers adopt a vacation or paid time off policy. Once such a policy is adopted, many states will treat accrued vacation or paid time off as wages that cannot be withheld or taken away. A few states (eg, Massachusetts, Rhode Island) control hours of operation and require certain businesses to pay extra compensation on some legal holidays
Sick leave & pay
There is no federally mandated right to paid sick leave. Employers with 50 or more workers generally must provide eligible employees unpaid leave under the Family and Medical Leave Act (FMLA) for up to 12 weeks in any given year due to a serious health condition of the employee or their family members, or for a qualifying exigency arising out of the fact that a family member is a covered military member or on covered active duty, and for up to 26 weeks to care for a family member who is a covered military member. Employers also may be required to provide unpaid leave (for at least some period of time) as a reasonable accommodation to a qualified employee with a disability under the Americans with Disabilities Act (ADA). State law may provide for additional leave, with an increasing number of states offering paid leave in connection with the birth or adoption of a child, typically with such benefits paid by the state, up to a percentage of the employee’s regular wages.
In the absence of national legislation providing for paid sick leave, many states, cities and counties have enacted laws requiring certain private employers to provide some form of paid sick leave to eligible employees. The result has been a patchwork of laws with different requirements.
As a result of COVID-19, federal, state and local governments also enacted legislation to create rights to
emergency sick leave benefits. While many laws have expired, others remain in effect.
New state leave laws that introduce, expand or alter coverage or entitlements will take effect in 2024 in a number of states, including California, Colorado, Illinois, Maryland, Minnesota, New York and Oregon.
Maternity/parental leave & pay
There is no federally mandated right to paid maternity or parental leave. Under the FMLA, employers with 50 or more workers generally must provide eligible employees unpaid leave for the birth or adoption of a child, or to care for a newborn or a newly placed child, for up to 12 weeks in any given year. Certain states and local jurisdictions have more generous leave requirements, and an increasing number provide paid parental leave, typically paid by the state, covering a certain portion of the worker’s wages. In certain states, employees who are temporarily disabled for medical reasons, including pregnancy and childbirth, are eligible to receive partial wage replacement in the form of temporary disability insurance benefits, and employers may be required to enroll in state-provided or state-sponsored insurance plans to cover the payments (eg, in New York) or contributions may be deducted from employees' paychecks (eg, in California).