U.S. Department of Labor

Employment Standards Administration

Wage and Hour Division 

WHD

WH Publication 1483 

Revised July 2008 

APPAREL 

CONTRACTOR 

GUIDE TO 

COMPLIANCE 

UNDER THE 

FAIR LABOR 

STANDARDS 

ACT

u Requirements of FLSA

The Fair Labor Standards Act (FLSA) is the Federal law that 

governs the payment of wages and various workplace practices. 

This law is enforced by the Wage and Hour Division of the United 

States Department of Labor.

u Minimum Wage

The minimum wage under Federal Law is $6.55 per hour after July 

24, 2008; and will be $7.25 per hour on July 24, 2009. It may be 

higher under State Law. If the State and Federal minimum wage 

laws are both applicable, the employer must pay the higher of the 

two rates to comply with both State and Federal requirements. 

For example, if a State’s Minimum Wage is $8.00 and the Federal 

Minimum Wage is lower than $8.00, the employer must pay $8.00 

per hour to meet the State’s minimum wage requirement. 

If a production employee is paid a flat salary or by the number of 

pieces he or she produces, the employer must calculate whether 

the employee has earned the minimum wage for all the hours 

worked that week. If the amount paid per piece produced is less 

than the minimum hourly wage earned for the hours worked, the 

employer must pay the difference up to the minimum hourly wage.

It is not legal to pay piece rate workers only their piece rates if 

minimum wage has not been earned.

Example:

A production worker earns $400 for producing a certain number 

of pieces in a week and works 40 hours to produce those pieces. 

The employer must divide the earnings ($400) by the number of 

hours worked (40) to determine if minimum wage has been paid. 

$400 divided by 40 hours equals $10.00 per hour. That is more 

than the current minimum wage and is a legal wage to pay when 

the employee works 40 hours.

If, however the employee works 40 hours and earns $200 for 

pieces produced, the employee will earn only $5.00 an hour ($200 

divided by 40 hours), which is below the minimum wage. The 

employer must now increase the wage so the required minimum 

wage will be paid. 

Thus, if the minimum wage is $6.55, the employer must pay $1.55 

extra for every hour worked; in this case it would be 40 hours 

times $1.55 which is $62.00 additional earnings, making the 

required payment for minimum wage $262.00 ($200 for pieces 

plus $62.00 of “make up minimum wage”).

If the minimum wage is $7.25, the employer must pay $2.25 extra 

for every hour worked; in this case it would be 40 hours times 

$2.25 which is $90.00 additional earnings, making the required 

payment for minimum wage $290.00 ($200 for pieces plus $90.00 

of “make up minimum wage”).

u Overtime

FLSA requires employers to pay time and one half when employees work more than 40 hours in a week. When an employee is 

paid an hourly rate of $8.00 an hour this means that the employee 

is paid $12.00 an hour for each hour over 40 for the week.

When employees are paid piece rates for their production, the 

law still requires an additional overtime payment “in addition to 

the piece rates paid.”

Example:

The overtime calculation for a piece worker – Before determining 

the overtime payment, the employer must first divide the pieces 

earned by the hours worked to make sure that minimum wage 

has been paid as explained in the section above. Thus, if a piece 

rate worker earns $400 and has worked 50 hours, the employer 

divides the $400 by 50 which equals $8.00 which is above the current minimum wage and no minimum wage make up is necessary 

for the straight time. Overtime, however must still be paid on the 

rate earned, $8.00 per hour. The employer multiplies 0.5 times 

the $8.00 (which equals $4.00) and determines the additional 

half time or overtime due the piece worker by multiplying the half 

time rate ($4.00) times the number of overtime hours worked (10) 

which equals $40.00. The total due the employee who worked 50 

hours is $440.00 (piece rate earned plus additional half time for 

overtime hours).

The overtime calculation for an hourly worker – An employee 

works 50 hours in a week and has a rate of $8.50 an hour. The 

employer must pay the employee 50 hours at $8.50 an hour ($425) 

and 10 overtime hours must be paid an additional $4.25 per 

hour ($42.50) in order for time and a half to be paid. Thus, the 

“straight time earnings” are $425 and the additional half time or 

extra overtime earnings are $42.50. The employee must be paid 

$467.50. This may also be arrived at by paying 40 hours at $8.50 

($340) and 10 hours at time-and-a-half (1.5 times $8.50 is $12.75; 

10 hours of time-and-a-half is $127.50), which is $467.50, the 

total wage required by law.
For More Information

Call the Wage and Hour Division at

1-866-487-9243 (toll free) or visit our 

website at www.wagehour.dol.gov. 

u Youth Employment

The youth employment provisions of FLSA prohibit hiring employees under the age of 16 in manufacturing. The manufacturing 

process includes: cutting, sewing, trimming, pressing, and packaging of apparel. No one under 16 can work in a factory where 

manufacturing occurs. Additionally 16 and 17-year-olds are 

forbidden from performing certain activities deemed hazardous by 

the Department of Labor. Also, many states require work permits 

for children under the age of 18 that frequently restrict the hours 

that 16 and 17-year-olds may work. There are no youth employment restrictions on employees who are 18 years or older. 

Employers should be careful not to allow children in the factory, 

as they may begin to “help” their relatives or other employees. 

Under the law this “helping” constitutes work and is a violation of 

the Federal youth employment regulations.

u Recordkeeping

FLSA requires employers to:

• Keep records of the hours employees worked each day and the 

total number of days worked each week (e.g. time cards)

• Record the name, address, and social security number of all 

employees

• Record the date and amount of wages paid for every pay 

period and the deductions made from employee wages

• Keep daily records of pieces or work units produced when they 

are used as the basis for earnings

• Keep all tables or schedules that provide the piece rates the 

employer uses to compute wages

• Show total overtime and straight-time earnings and how they 

are calculated

• Record the birth dates of all employees under the age of 19

• Record the time and day the work week begins and ends for 

the employees, e.g. Sunday through Saturday

• Post the Federal minimum wage and overtime poster at his or 

her place of business

Other Federal laws require that employers fill out and maintain 

I-9 (employment eligibility) and W-4 (income tax) forms on all 

employees they hire.

Payroll, sales, and purchase records must be kept for three years. 

Supplementary records must be kept for two years. 

Employers must make their records available for inspection.

State Laws may require additional records to be kept.

u No Homework

The FLSA also prohibits the manufacturing of ladies’ and 

children’s apparel at home. Working at home often results in 

violations of minimum wage and overtime laws, as well as youth 

employment laws. Some state laws prohibit all types of clothing 

from being manufactured at home. California law, for example, 

allows for apparel goods being made at home to be seized and 

confiscated. 

u What are “Hot Goods”?

“Hot goods” are pieces that have been made in violation of the 

Federal minimum wage or overtime laws. The FLSA has two 

provisions that prohibit the shipment of these goods into commerce. Section 15(a)(1) of the FLSA says it is illegal to ship “hot 

goods.” This law affects both the shop that is making the goods 

and the shipper who owns the goods. Thus if minimum wage 

or the required overtime has not been given to the employee(s), 

the law prohibits the goods from being moved. The Department 

of Labor “objects” to the shipping of “hot goods” and requires 

the contractor or manufacturer to take corrective action before 

it lifts its objection and allows the goods to be shipped. These 

corrective actions normally include resolving any wage liabilities 

(correct payment of all wages) and having the manufacturer and 

contractor agree to obey the FLSA in the future. In the case of 

the shipper/manufacturer, the Department of Labor may initiate a 

“monitoring” program to curtail violations at the contractor shops 

it uses.

Section 12(a) of the FLSA forbids shipping into commerce any 

goods produced in an establishment where there has been 

prohibited youth employment. When a youth employment violation occurs at a shop, goods may not be removed from that shop 

for thirty days. Contractors and manufacturers that violate youth 

employment laws may be required to pay a civil money penalty.

u What is the Purpose of 

“Monitoring”?

“Monitoring” is a program the United States Department of Labor 

developed to help manufacturers and shippers avoid shipping “hot 

goods.” Manufacturers that violate the FLSA must take positive 

steps to ensure that the goods they were shipping were made in 

compliance with minimum wage, overtime, and youth employment provisions. The Department developed a series of activities 

for manufacturers to significantly reduce violations of the FLSA at 

the contractor shop. This series of activities has become known 

as “monitoring”.

Normally, “monitoring” starts with an agreement between the 

contractor and the manufacturer that allows the manufacturer to 

look at the employment records and speak with the contractor’s 

employees about the pay practices at the contractor’s shop. This 

agreement between the contractor and manufacturer requires the 

contractor to follow the Wage and Hour laws indicated above and 

allows the manufacturers to check the contractor’s compliance 

with these laws. Monitoring is done either by the manufacturer’s 

own personnel or by personnel the manufacturer has designated 

to perform the “monitoring.” When the manufacturer finds wage 

violations at the contractor’s shop, the manufacturer must immediately make sure that these practices are corrected.

u Further Information

More information is available at no cost about these and related 

employment issues at the Wage and Hour Offices of the United 

States Department of Labor, 1-866-4US-WAGE (1-866-487-9243). 

For TTY services call 1-877-889-5627. 

Or, visit the Wage and Hour Division Home Page on the Internet 

at http://www.wagehour.dol.gov 

This Guide is intended to provide general guidance only. 

It does not describe all the factors which may be pertinent to the 

application of the FLSA and should not be viewed as having legal 

force as statutes, regulations, or formal opinions do.