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Does the FLSA Apply to Work Performed Overseas

December 3, 1999
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Related Topics: Expatriate Management, Wages and Hours, Featured Article
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Issue: You work for a U.S. multinational employer, with business operations in Puerto Rico, Guam, Germany and Hong Kong. Several staff members will be traveling to these locations to assist with the company-wide implementation of a new computer system. Included among the group are several non-exempt employees who will be providing administrative support for the project. While on assignment, will the non-exempt employees be eligible to receive overtime pay under the Fair Labor Standards Act (FLSA) if their work hours exceed 40 per week?

Answer: The answer to this question is generally dependent on two factors: (1) the country assignment and (2) the timing of the assignment within the workweek.

Country of assignment.
The FLSA states that the minimum wage, overtime, record-keeping and child-labor provisions do not apply to employees whose services during the workweek are performed in a workplace within a foreign country. Also, these provisions do not apply to territories under U.S. jurisdiction, unless they are one of the following:

  • A State of the United States
  • The District of Columbia
  • Puerto Rico
  • The Virgin Islands
  • Outer Continental Shelf Lands
  • American Samoa
  • Guam
  • Wake Island
  • Eniwetok Atoll
  • Kwajalein Atoll
  • Johnston Island.

Therefore, hours that the nonexempt employees spend working in Puerto Rico and Guam would still be considered compensable hours under the Act for purposes of determining overtime pay eligibility. However, hours worked where the entire workweek is spent working in Germany or Hong Kong would not be compensable under the FLSA.

Timing of assignment.
What if the employees spend part of the workweek working in the United States and the other part working in Germany or Hong Kong?

According to a wage/hour opinion letter, when part of the work performed for an employer in any workweek is covered work performed within any state (including the areas mentioned above), a nonexempt employee is entitled to FLSA benefits for the entire workweek. In this situation, nonexempt employees working part of the workweek in the United States and the other part of the workweek in Germany or Hong Kong would be eligible for overtime pay under the FLSA if hours exceed 40 for that particular week.

Caution—examine local law.
In addition to determining the applicability of the FLSA to areas outside the United States, the employer should also examine local laws that may apply to work performed within the foreign host country.

Cite: Fair Labor Standards Act, Section 13(f), as amended by the Overseas Labor Standards Amendments of 1957 and W & H Opinion Letter No. 1563 (WH-510), June 29, 1981.

Source: CCH Incorporated is a leading provider of information and software for human resources, legal, accounting, health-care and small-business professionals. CCH offers human resource management, payroll, employment, benefits, and worker-safety products and publications in print, CD, online and via the Internet. For more information and other updates on the latest HR news, check our Web site at http://hr.cch.com.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion.

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