Owners, Managers Face Personal Risk on FLSA Claims

Arizona Employment Law Letter
Employment & Labor Law

As most business owners and managers know, the federal Fair Labor Standards Act (FLSA) requires all covered employers to pay overtime compensation to any nonexempt employee who works more than 40 hours in a week. Under the FLSA, however, “employer” includes “any person acting directly or indirectly in the interest of an employer in relation to an employee.” The definition is a bit circular (using the word employer to define employer), but note that the FLSA’s interpretation is expansive in order to achieve its broad remedial purposes. So when does an individual qualify as an “employer” under the FLSA? That definition encompasses more individuals than you may think. A recent Arizona case illustrates the personal liability risk for owners and managers on FLSA claims.

Read more from Jodi Bohr about personal risk on FLSA claims.