Federal and state laws regarding compensation can affect your relationship with your employees. The following is a list of laws that you need to be aware of when paying your employees:

• Complying with minimum wage laws. The Fair Labor Standards Act (FLSA) requires that all employees paid at an hourly rate be paid a minimum wage.
• Complying with overtime pay laws. What employers must pay employees for any hours worked in excess of 40 hours in a workweek.
• What the FLSA requires. Most employers are subject to the wage and hour rules of the Fair Labor Standards Act (FLSA), and your responsibilities vary depending on how each employee is classified.
• Exempt versus nonexempt employees. Nonexempt employees are paid at an hourly rate instead of a salary and are protected by the Federal Labor Standards Act (FLSA). Exempt employees are not protected by the FLSA.
• Tipped employees. Tipped employees are subject to the same minimum wage rates as other employees, but under federal law employers can take a credit against wages for tips received by employees from customers.
• Homeworkers. Special rules apply to homeworkers, however, you must comply with all applicable wage and hour laws.

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