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Fair Labor Standards Act (FLSA) for Foreign-Owned Businesses

Learn how the Fair Labor Standards Act sets minimum wage, overtime and pay-record rules for foreign-owned and cross-border businesses with India or Canada ties.

Last reviewed October 27, 2026 · 3 min read · General information, not legal advice

General information only, not legal advice. CPA Tax Payroll and Accounting Corp is a CPA firm, not a law firm. Laws change: confirm with the official source or a licensed attorney before you act. Read the full notice.

The Fair Labor Standards Act (FLSA) is the federal wage law covering minimum wage, overtime, payroll records and child labor. Enforcement belongs to the Wage and Hour Division of the U.S. Department of Labor, and workers can also sue. This page is for owners and managers of U.S. businesses with ties to India or Canada, such as a foreign-owned LLC hiring near Aurora. Page 2 has the checklist.

Slide show: The FLSA in seven slides

  1. What it is

    The FLSA (1938) sets minimum wage, overtime, record and child labor rules.

  2. Who it covers

    Yearly sales of $500,000 plus a staff of 2 or more, or workers whose own work regularly involves interstate commerce.

  3. The rule

    Minimum wage is $7.25 an hour. Hours past 40 earn 1.5 times pay. A higher state rate wins.

  4. The number

    Most white-collar exemptions need $684 a week plus a duties test.

  5. The deadline

    Suits for back pay: 2 years, or 3 if willful.

  6. The penalty

    Back pay, usually an equal amount in liquidated damages, and attorney fees. Repeated or willful violations can also bring civil penalties of up to $2,515 each.

  7. The tip

    Review exempt staff, bonuses and 1099 workers yearly with the Riverwalk Workweek Proof.

Who does the Fair Labor Standards Act cover?

TestRule
Enterprise coverageYearly sales of $500,000 and at least 2 employees. Coverage applies at any dollar level to schools, hospitals, care facilities and government agencies.
Individual coverageSmall-firm employees are covered if their work regularly involves interstate commerce.
NonprofitsEnterprise coverage counts only business-like activity, for example a gift shop; individual coverage can still apply.
White-collar exemptionsNeed both a salary and a duties test. Outside sales, teachers, and practicing lawyers and doctors have no salary test.
Highly paid office staff$107,432 total pay, including $684 a week in salary, plus regularly doing an exempt duty.
OvertimePrivate employers pay it in cash. Comp time is for government employers.

What does it mean for a foreign-owned or cross-border business?

SituationWhat the law saysWhat to check
Owner lives in India or CanadaThe coverage tests look at headcount, sales and interstate work. Owner residence is not a listed test.Count U.S. employees and sales.
Staff on visas or paid by a foreign parentPay rules turn on hours, pay and duties. This page does not cover immigration status. DOL proposed a joint-employer rule on April 23, 2026; it is not final.Note who sets hours and pay. See hiring US employees from abroad; take visa questions to an immigration attorney.
Contractors on invoiceDOL says a label or signed agreement does not decide status. The IRS uses its own test.Review each contractor; see the employer checklist and withholding on foreign payees.

Where do I go next?

Continue to FLSA rules and checklist. Related: Title VII, the Illinois Wage Payment and Collection Act, the Illinois payroll guide and the federal section.

Frequently asked questions

Does the FLSA apply if the owner lives in India or Canada?

The coverage tests look at employees, sales and interstate work, and owner residence is not among them. Whether a worker is covered depends on the facts, so an employment attorney should confirm.

Official sources

This page summarizes public guidance in plain language. If anything here differs from the official source, the official source controls.