This FLSA compliance checklist turns the Fair Labor Standards Act into steps for a U.S. employer owned from India or Canada. It builds on the overview and uses figures in force on October 27, 2026.
What does the FLSA require?
| Area | Rule |
|---|---|
| Minimum wage and overtime | The federal minimum for covered, non-exempt employees, and 1.5 times the regular rate over 40 hours in a fixed 168-hour workweek, with no averaging. |
| White-collar exempt staff | Most need a salary of at least $684 a week plus a duties test. |
| Breaks | Rests of about 5 to 20 minutes are paid. A bona fide meal period need not be. Federal law requires neither. |
| Records | Payroll 3 years; time cards and rate tables 2 years. |
| Tips | Advance notice for a tip credit; employers, managers and supervisors may not keep tips. |
| Retaliation | Banned against anyone who files a complaint; Title VII has its own ban. |
Illinois adds a 20-minute meal period for many employees working 7.5 continuous hours (820 ILCS 140/3).
Key numbers and dates
| Item | Amount | Year |
|---|---|---|
| Minimum wage | $7.25 an hour, since July 24, 2009 | 2026 |
| Exempt salary | $684 a week ($35,568 a year) | 2026 |
| Civil penalties | Up to $2,515 (repeated or willful pay violation), $1,409 (keeping tips), $16,035 (child labor) | 2025 amounts, in force 2026 |
Source: U.S. DOL, 91 FR 27833
Recent and pending changes
- December 29, 2022: the PUMP Act added break time and space to express milk.
- November 15 and December 30, 2024: courts vacated DOL's 2024 salary rule. Appeals were dismissed May 5 and 7, 2026, and a May 15, 2026 amendment restored $684.
- 2026: penalty amounts stayed at 2025 levels under OMB guidance.
FLSA compliance checklist: the Riverwalk Workweek Proof
We call this set the Riverwalk Workweek Proof.
- Test each salaried person against $684 a week and a duties test.
- Build overtime on a fixed workweek, with nondiscretionary bonuses in the regular rate.
- Pay short rests; a meal period is unpaid only with full relief from duty.
- Test contractors under both the FLSA and IRS tests, not the 1099 label.
- Keep accurate payroll records 3 years and time cards 2 years.
- Post the April 2023 poster; see the employer checklist.
- If a foreign parent pays U.S. workers, confirm the U.S. entity holds hours-and-pay records.
Common mistakes
- Treating a salaried employee as exempt without a duties test.
- Paying a contractor on invoice because of a signed agreement.
- Averaging hours across two weeks.
- Omitting nondiscretionary bonuses from the regular rate.
When to bring in an attorney
- A Wage and Hour investigation, demand letter or lawsuit.
- A close exempt or contractor call covering several workers.
- A retaliation complaint, or a release of wage claims.
How we can help
We handle the U.S. payroll, tax and accounting side for Aurora-area employers, working with your attorney, Canadian CPA or Indian CA. See payroll and employer compliance and bookkeeping and accounting.
Frequently asked questions
Does federal law require meal or rest breaks?
No, though DOL says short rests are paid when given.
Is a salaried manager automatically exempt?
No. A white-collar exemption generally needs a salary of at least $684 a week and a duties test.
Is a worker with a 1099 a contractor?
Not automatically. A label or signed agreement does not decide status.
How far back can a worker claim unpaid overtime?
Two years, or three if willful, plus usually an equal amount in liquidated damages.
Official sources
- U.S. Department of Labor: Civil money penalty inflation adjustments
- Federal Register: 91 FR 27833, exempt salary technical amendment (May 15, 2026)
- U.S. Department of Labor: Fact Sheet 13, employee or independent contractor
- U.S. Department of Labor: FLSA minimum wage poster
- Illinois General Assembly: 820 ILCS 140/3, One Day Rest in Seven Act
This page summarizes public guidance in plain language. If anything here differs from the official source, the official source controls.