Are You Being Paid Fairly? Wage Protections for Warehouse & Wholesale Employees

Warehouses and wholesale businesses keep the supply chain running. From loading docks to inventory control, these fast-paced environments rely on hardworking employees to keep goods moving. However, while the work is physically demanding, it must also be fairly compensated, and that’s where the Fair Labor Standards Act (FLSA) comes into play.

If you work in warehousing or wholesale distribution, here’s what you need to know about your rights under federal labor law.

Understanding FLSA Coverage in Warehousing and Wholesale

If you work in warehousing or the wholesale industry, chances are the FLSA applies to you. Whether moving shipments, stocking shelves, or handling invoices, the FLSA sets rules that protect your right to minimum wages, overtime pay, and more.

What Is Considered Wholesale or Warehousing Work?

• Wholesale businesses sell goods to other businesses (not directly to consumers), often as part of a supply chain.
• Warehousing includes storage facilities, supply centers, and large distribution hubs that serve national or regional brands. 

Who’s Covered Under the FLSA?

There are two primary ways warehouse and wholesale workers are protected under the FLSA:

Enterprise Coverage

Enterprise Coverage applies if a company earns at least $500,000 annually and is engaged in interstate commerce. This can include using goods or materials manufactured in another state or country (even if purchased locally) or ordering products directly from out of state or abroad.

Individual Coverage

Even if the business doesn’t meet the revenue threshold, you may still qualify if your job involves interstate activity, such as regularly:

• Shipping, receiving, or moving goods across state lines
• Preparing documents tied to out-of-state shipments
• Handling emails or phone calls involving out-of-state orders
• Supporting those activities through maintenance, janitorial work, or logistics

If your job connects to goods or services that cross state lines, the FLSA will likely protect you.

What Employers Are Legally Required to Do

If you're a nonexempt employee, your employer must:

• Pay at least the federal minimum wage ($7.25/hour)
• Pay overtime at 1.5 times your regular rate for any hours over 40 in a week. This rate must meet or exceed the state’s minimum wage or applicable prevailing wage if those are higher.
• Keep accurate records of hours worked, wages paid, and any deductions

Important: Your employer cannot average your hours over multiple weeks to avoid paying overtime. Each workweek must be treated separately.

Youth Minimum Wage Rules

Workers under age 20 may be paid a youth minimum wage of $4.25 per hour during their first 90 consecutive calendar days of employment (or until they turn 20, whichever comes first). After that, they must receive the standard minimum wage. Some states set higher minimum wages for youth workers.

And no, your employer can’t fire a higher-paid employee just to replace them with someone earning the youth rate. That’s illegal.

FLSA Rules for Younger Workers in Warehousing

Because warehouses often involve heavy machinery and physical labor, the FLSA includes extra protections for minors:

• No one under 16 may work in a warehouse
• Workers aged 14–15 can be employed in very limited, non-hazardous roles (wholesalers)
• Anyone under 18 is prohibited from operating dangerous equipment, such as forklifts or mechanical balers

Recordkeeping Requirements for Employers

By law, warehouse and wholesale employers must maintain detailed records for each employee, including:

• Full name and address
• Hours worked each day and each week
• Hourly pay rate and total wages paid
• All deductions from paychecks

These records must be accurate, up-to-date, and retained for at least three years. They must also reflect what you're actually being paid.

Common FLSA Violations in Warehousing and Wholesale Work

Even though the rules are clear, FLSA violations still happen far too often in warehouse and wholesale settings. Below are some of the most common issues workers face:

Misclassification of Employees

Some employers label workers as “executives” or “administrators” to avoid paying overtime, even when their job duties and/or rate of pay don’t meet the legal criteria. This is especially common with dispatchers, office staff, and inside salespeople.

Underage Employees Operating Dangerous Equipment

Hiring minors to operate forklifts or other heavy machinery is not only illegal, it’s dangerous. The FLSA strictly prohibits this kind of youth employment.

Misuse of Salary Exemptions

Being paid a salary doesn’t automatically make you exempt from overtime. If your job duties don’t meet the exemption criteria, your salary falls below the legal threshold, or your employer docks your pay for partial-day absences, you may still be entitled to overtime pay.

Unpaid Work Time

Time spent doing tasks like inventory counts, prep work, or closing up after hours still counts as time worked and must be paid.

Missing or Inaccurate Time Records

Your hours must still be tracked even if you’re paid by the piece or on a fixed salary. If your employer isn’t keeping records, that’s a major red flag.

“Comp Time” Instead of Overtime

Private employers cannot legally offer paid time off instead of overtime pay. That practice is only allowed in the public sector, and only under strict conditions.

Misclassifying Employees as Independent Contractors

If you're doing the same work as other employees but labeled as a “contractor,” it may be an attempt to evade labor laws, and it's often illegal.

Unlawful Paycheck Deductions

Employers generally can’t deduct wages for uniforms, register shortages, or mistakes, especially if it drops your pay below minimum wage or affects your overtime pay. 

You Deserve Fair Pay for Every Shift

Warehouse and wholesale workers keep goods moving across the country, and that work matters. If your employer isn’t following the law, you may have the right to take action.

If something feels off with your pay or hours and your employer won’t address it, reach out to Morgan & Morgan today. Our employment lawyers might be able to step in on your behalf.

This blog post is based on fact sheets from the U.S. Department of Labor and is for informational purposes only.