Construction Laws Under the Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act (FLSA) is a key piece of US legislation that establishes rules for minimum wage, overtime pay, recordkeeping, and youth employment standards. These rules apply not only to employees in federal, state, and local governments but also to those in private businesses across various sectors, including the massive $2.1 trillion construction industry.

Given the size and risky nature of construction work, it’s crucial for both employers and employees to understand their rights and responsibilities under the FLSA. Knowing these rules ensures fair treatment and safety for everyone involved on the job.

In this comprehensive guide, we delve into the specific construction labor standards outlined by the FLSA. By providing clarity and guidance, we aim to help both employers and workers adhere to regulations and promote equitable practices within the industry.

This Article Covers:

Which Construction Activities are Covered by the FLSA?

Who is Subject to FLSA Regulations in Construction?

Key FLSA Provisions for Construction Businesses

FLSA Child Labor Laws for Construction

An engineer in front of a construction site.

Which Construction Activities are Covered by the FLSA?

The Fair Labor Standards Act covers various construction activities aimed at building or improving structures and infrastructure. These activities include:

  • New Construction: Building entirely new structures from the ground up, such as commercial buildings, residential homes, or industrial facilities.
  • Reconstruction: Refurbishing or rebuilding existing structures to improve their condition or functionality. This may involve extensive renovation or modernization projects.
  • Repair and Renovation: Fixing or upgrading existing commercial or residential buildings to address issues like damage, deterioration, or outdated features.
  • Roadway and Bridge Construction: Constructing or repairing roads, highways, bridges, and other transportation infrastructure to enhance connectivity and safety.
  • Specialized Trades: Various specialized tasks within the construction industry, such as painting, sandblasting, roofing, guttering, spouting, tuckpointing, water well drilling, flooring installation, and landscaping.

Who is Subject to FLSA Construction Regulations?

To be subject to FLSA regulations, a construction business must have two or more employees and an annual gross sales volume of $500,000 or more.

Individual coverage also applies to employees whose work involves interstate commerce, meaning they handle goods moving between states or work on the expansion of existing facilities of commerce. Even if the employer’s sales volume is below the threshold, employees engaged in such activities are still protected by the FLSA regarding minimum wage and overtime pay requirements.

Furthermore, individuals like guards, janitors, and maintenance employees whose duties are closely related to interstate activities are also covered by the FLSA.

Essentially, anyone involved in construction tasks or supporting functions related to interstate commerce falls under the umbrella of FLSA regulations, and is thus entitled to certain labor rights such as minimum wage and overtime pay.

time tracking in US Construction Companies

Key FLSA Provisions for Construction Businesses

For construction businesses, compliance with the FLSA is essential to ensure fair treatment of employees and adherence to federal labor laws. Here are the key provisions of the FLSA that construction businesses need to be aware of:

What is the Minimum Wage for Construction Workers in the US?

The minimum wage for construction workers in the United States is subject to specific regulations, particularly for those working on federal contracts.

As of January 1, 2024, Executive Order 14026 has increased the minimum wage for workers involved in federal contracts from $16.20 to $17.20 per hour. This adjustment marks the second consecutive year of significant changes to the minimum wage for service and construction workers on federal projects.

The U.S. Department of Labor (DOL) oversees the implementation of the minimum wage requirements for federal contracts related to services and construction. The updated minimum wage rates vary depending on the timing of the covered federal contract. For contracts signed, renewed, or extended on or after January 30, 2022, the minimum wage rate for all employees working on or in connection with the federal contract is $17.20 per hour. This rate applies to both non-tipped employees and tipped employees, representing an increase from previous years.

Construction workers not covered under Executive Order 14026 but are non-exempt under FLSA should be paid the federal minimum wage currently set at $7.25 per hour. Some states may also impose their own minimum wages, so it’s best to check state labor laws that apply to your business.

Are Construction Workers Entitled to Overtime Pay?

Yes, construction workers are entitled to overtime pay as per FLSA regulations.

The exemptions provided by FLSA Section 13(a)(1) do not apply to manual laborers or other “blue-collar” workers, including non-management construction workers. Examples of non-exempt “blue-collar” employees in construction include carpenters, electricians, mechanics, plumbers, ironworkers, craftsmen, operating engineers, longshoremen, and laborers.

Overtime pay under the FLSA is calculated at a rate of one and a half times the employee’s regular rate for any hours worked beyond 40 in a workweek. This means that if a construction worker exceeds 40 hours of work in a single week, they are entitled to receive 1.5 times their regular pay rate for each additional hour worked

It’s important to note that paying overtime only after 80 hours in a bi-weekly pay period is illegal, as each workweek must be considered separately for overtime calculations.

What are the Recordkeeping Requirements for Construction Industries?

In the construction industry, employers covered under the Fair Labor Standards Act (FLSA) must adhere to specific recordkeeping requirements outlined in regulations, 29 CFR Part 516. These regulations are designed to ensure transparency and compliance with labor standards.

While there is no prescribed format for these records, they must contain certain essential information about the employee, hours worked, and wages earned. Here’s a breakdown of the key details that must be included in the records:

  • Employee’s full name and social security number.
  • Address, including zip code.
  • Birth date, if the employee is younger than 19.
  • Gender and occupation.
  • Start time and day of the employee’s workweek.
  • Daily hours worked.
  • Total hours worked per workweek.
  • Basis of wage payment (e.g., hourly rate, weekly salary, piece rate).
  • Regular hourly pay rate.
  • Total regular earnings per day or week.
  • Overtime earnings for the workweek.
  • Any deductions or additions to the employee’s wages.
  • Total wages paid for each pay period.
  • Date of payment and the corresponding pay period.

Aside from these key details, construction employers must also keep a record of serious work-related injuries and illnesses as per OSHA recordkeeping requirements

In terms of record retention, employers are required by FLSA to preserve payroll records, collective bargaining agreements, and sales and purchase records for at least three years. Records used for wage computations, such as time cards, piecework tickets, and wage rate tables, should be kept for two years. These records must be accessible for inspection by representatives from the Division, who may request extensions, computations, or transcriptions. 

FLSA Child Labor Laws for Construction Industries

Child labor laws under the Fair Labor Standards Act aim to protect young workers from dangerous tasks, especially in the construction industry. If you’re looking to employ minors in your construction business, here are some crucial things you need to know.

Are minors allowed to work in construction?

There are some instances where minor workers may be allowed to work in construction. However due to the dangerous nature of both the work performed and the tools used in this industry, there are specific restrictions and regulations that employers should be aware of.

  • Prohibited Occupations: The FLSA prohibits minors under 18 from working in hazardous occupations including operating motor vehicles, power-driven machinery like saws and hoisting apparatus, as well as tasks involving excavation, roofing, and compactors.
  • Restrictions for 14 and 15-Year-Olds: Workers aged 14 and 15 can’t work on construction sites and be involved in activities such as vehicle loading and unloading, warehousing, operating power-driven machinery, maintenance and repair work, and working in boiler rooms. They may however perform office and sales work for construction employers. Limitations on working hours apply to these minors, such as not working during school hours and restrictions on the number of hours they can work per day and per week.
  • Hours of Work: 14- and 15-year-olds can work no more than three hours on a school day, eight on a non-school day, and must not exceed 18 hours in a school week or 40 hours in a non-school week. They can only work between 7 a.m. and 7 p.m., except during summer when they can work until 9 p.m.

How Much is the Youth Minimum Wage for Construction?

The Youth Minimum Wage for construction workers is $4.25 per hour for employees under 20 years old during the first 90 consecutive calendar days after they start working for an employer. Once those 90 days are up or when the worker turns 20, whichever comes first, the employer must raise their pay to at least the regular minimum wage.

This special wage rate is allowed by the Fair Labor Standards Act (FLSA). However, there are rules to prevent employers from replacing existing employees with younger ones just to pay them this lower wage. These protections ensure fairness in the workplace.

Penalties for Breaking FLSA Construction Child Labor Laws

Penalties for breaking child labor laws under the Fair Labor Standards Act (FLSA) are serious.

Employers who violate these laws may face hefty fines. For each minor employed in violation, the penalty can be more than $13,000. If a violation results in the death or serious injury of a minor, the penalty may increase to over $59,000. In cases of willful or repeated violations, these penalties can double, reaching more than $118,000. These penalties are meant to encourage employers to prioritize compliance and the safety of young workers.

Important Cautionary Note

When making this guide we have tried to make it accurate but we do not give any guarantee that the information provided is correct or up-to-date. We therefore strongly advise you to seek advice from qualified professionals before acting on any information provided in this guide. We do not accept any liability for any damages or risks incurred for the use of this guide.