Who does it apply to?

Generally speaking, the FLSA applies to any business or enterprise that is involved in interstate commerce or makes at least $500,000 worth of sales annually. There are two ways for coverage to apply: “enterprise coverage” and “individual coverage.”

Enterprise coverage provisions will apply if the business meets two tests. First, the business must be involved in interstate commerce. Second, the business’ gross annual revenue must be at least $500,000. If a business meets both tests, then all employees working for the business are covered.

If the business fails to meet the enterprise coverage test, individual coverage applies to any employee whose work affects interstate commerce. This term is broadly defined. Interstate commerce includes employees who load, unload, or use those products arriving from out of state. Employees who take payments from customers who are out-of-state, or who process payments that come from out of state banks or credit card issuers would be engaged in interstate commerce, too.