Skip to Main Content

Fair Labor Standards Act Advisor

Enterprise Coverage - $500,000 Enterprise

This type of enterprise coverage applies to a very large number of employers. To determine if your company/organization is covered, you must first know what your enterprise is, whether it is a for-profit company/organization, and whether the enterprise has annual dollar volume of sales or receipts in the amount of $500,000 or more.

Often, two or more separate establishments constitute one enterprise for purposes of the FLSA. For example, if the sales volume of all establishments combined exceeds $500,000 then all employees working for your company/organization would be covered by the FLSA, even where individual establishments do not meet the dollar volume threshold individually.

The Fair Labor Standards Act stipulates that two or more business entities will be considered to be one enterprise when they involve: (1) related activities performed either through (2) unified operation or (3) common control by any person or persons for a (4) common business purpose.

  1. Related activities are the same or similar activities, such as those of the individual retail or service stores in a chain. Activities are also related when they are auxiliary and service activities generally necessary to the operation of a particular business, such as warehousing, bookkeeping, auditing, purchasing, and advertising. Likewise, activities are related when they are part of a vertical structure such as the manufacturing, warehousing, and retailing of a particular product or products.
  2. Unified operation means combining, uniting or organizing the performance of related activities so as to be in effect a single business unit or organized business system which is directed to the accomplishment of a common business purpose.
  3. Common control exists where a number of persons, corporations or other organizational units have the power or authority to direct, regulate, govern or administer the performance of related activities. Common ownership is not a prerequisite for common control; sufficient ownership to exercise control, however, will constitute common control.
  4. Common business purpose will encompass activities directed to the same or similar business objectives, whether performed by one or more persons, corporations, or other business organizations.

Is your company/organization a non-profit organization?