Your HOA and the Fair Labor Standards Act

If your homeowners association has employees—even independent contractors—then it may need to comply with FLSA regulations.

Your homeowners association (HOA) is likely also an employer. Large associations may hire office assistants, grounds maintenance crews, janitorial staff, or an on-staff property manager. Even small associations likely have a cleaning staff. Your employees may be covered under the Fair Labor Standards Act (FLSA), so it’s important to understand your requirements as an employer.

What does the FLSA cover?

This federal act sets the national minimum wage, overtime pay, regular workweek hours, and recordkeeping and youth employment standards.

• Minimum wage: The current national minimum wage is $7.25 per hour. If states have a higher minimum wage than the FLSA, employers must pay the higher wage.
• Overtime pay: Nonexempt employees are eligible for overtime pay if they work over 40 hours per workweek. Overtime pay must be paid at no less than 1.5 times the regular pay rate.
• Regular workweek hours: A standard workweek is considered to be 40 hours of work during any consecutive seven days.
• Recordkeeping: Every employer affected by the FLSA must keep certain records for each nonexempt worker for at least three years, including the employee’s full name and social security number, full address, occupation, hours worked each day and workweek, and more. This provision also requires employers to display an official poster of the FLSA provisions. (You can obtain a poster free of charge by calling 866-487-9243.)
• Youth employment: The FLSA sets standards around the types of jobs and hours young employees are allowed to work, depending on their age.

Who is protected under the FLSA?

The FLSA provides “enterprise” and “individual” coverage. Enterprise protection affects organizations with at least two employees and covers employees of federal, state and local agencies; companies or organizations with annual dollar volume of sales or receipts of at least $500,000; hospitals or institutions that provide medical or mental care for residents; and schools.

(Some employees may have other protections under the FLSA’s 1989 amendments for enterprise coverage if they are considered “grandfathered in.”) Individual coverage affects employees involved in interstate commerce or the production of goods for interstate commerce, construction activities or domestic services.

Also, classifying an employee as an independent contractor may not protect your HOA from employment-related claims. If you are not sure your employees are covered by the FLSA, you can view this Department of Labor questionnaire.

What must you do as an HOA and an employer?

First, understand whether your HOA is affected by the FLSA by talking with a labor and employment attorney from your state. If it is, the next step is to ensure your HOA is in compliance with all regulations.

You can find full details of the FLSA on the Department of Labor’s website.

This article contains general information. Please consult your attorney before utilizing any of the information contained in this article.

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