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elaws - employment laws assistance for workers and small businesses - FLSA Section 14(c) Advisor

Enterprise Coverage

The FLSA defines an enterprise as the related activities performed (either through unified operation or common control) by any person or persons for a common business purpose. If an employer is covered on an enterprise basis, all employees are subject to the provisions of the FLSA regardless of their individual involvement in interstate commerce.

An employer is covered on an enterprise basis if its annual dollar volume of sales or business is at least $500,000. However, it is important to note that a "not-for-profit" work center cannot be covered on an enterprise basis because the FLSA does not recognize such entities as being "operated for a business purpose." But certain related or affiliated businesses operated by the work center, such as a retail store, could be covered on an enterprise basis. Employees of "not-for-profit" work centers often are covered on an individual basis.

In addition, certain enterprises are designated as “covered enterprises” by the FLSA regardless of minimum annual dollar volume of sales or business done. Examples include:

  • Federal, State or local government agencies
  • Hospitals or institutions primarily engaged in the care of the sick, the aged, or patients with mental disabilities who live on the premises
  • Pre-schools, elementary schools, secondary schools, institutions of higher learning, schools for gifted children and schools for children with disabilities

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FLSA Section 14(c) Advisor | Wage and Hour Division