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Fair Labor Standards Act for Wholesalers

Below is some general information concerning the application of the FLSA (Fair Labor Standards Act) to wholesale and warehouse industries.

  • The wholesale industry is characterized by the sale of goods for resale, rather than sales to the ultimate consumer.
  • The warehouse industry includes central warehouses for a business enterprise, public warehouses, and storage establishments.

All employees of wholesale or warehouse employers whose gross annual dollar volume of sales made or business done is not less than $500,000 are covered by the FLSA. Even if a wholesale or warehouse business is not a covered enterprise, most employees will be covered by the FLSA on an individual basis. Individual coverage applies to all employees who are engaged in interstate commerce or the production of goods for commerce. Such employees include persons who receive, ship, transport, or load goods that are moving in commerce or who prepare or transmit documents relating to such shipments. Other persons, such as guards, janitors and maintenance employees who perform duties which are closely related and directly essential to such interstate activities are also covered by the FLSA. It has been the experience of the Wage and Hour Division that virtually all employees of wholesale and warehouse businesses are covered by the Act’s provisions.

There are some problems and misconceptions which Wage and Hour investigations commonly disclose in the wholesale and warehouse industry. These include:

  • The misapplication of the executive or administrative exemptions to non-exempt persons, such as clerical workers, working foremen, dispatchers, and inside salespersons.
  • Employment of underage minors, especially in the operation of fork lifts and paper balers.
  • The misconception that salaried employees need not be paid overtime.
  • Failure to pay employees for all hours suffered or permitted to work, including time spent taking inventory, completing paperwork, etc. beyond the normal schedule.
  • Failure to maintain time records on salaried or piece rate employees.
  • Giving compensatory time off in lieu of overtime pay.
  • Considering certain employees to be “contract labor” and thus, not covered by the Act’s provisions.
  • Deductions made for reasons other than board, lodging, etc., in overtime work weeks.

For additional information, visit our Wage and Hour Division Website: http://www.wagehour.dol.gov and/or call our toll-free information and helpline, available 8 a.m. to 5 p.m. in your time zone, 1-866-4USWAGE (1-866-487-9243).

Source: U.S. Department of Labor, Wage and Hours Division, Fact Sheet #10: Wholesale and Warehouse Industries Under the Fair Labor Standards Act (FLSA)

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