Fair Labor Standards Act (FLSA): Wage and Overtime Rights for Real Estate and Rental Agency Workers

The Fair Labor Standards Act (FLSA) sets nationwide rules for minimum wage, overtime pay, and youth employment. In the real estate and rental industry, these rules apply to many workers, depending on the nature of their job and the agency’s business operations. 

How These Agencies Operate

Real estate and rental agencies help people buy, sell, lease, or manage properties. Their services often extend across state lines, especially when they:

• Work with out-of-state clients
• Manage properties in multiple locations
• Send contracts or payments through interstate mail or electronic systems

Because so much of this work involves interstate commerce, the FLSA often applies, even if you don’t leave the office.

When the Law Applies to You

The FLSA likely covers you if your job involves interstate commerce. That might sound technical, but it includes everyday tasks like:

• Handling goods that came from another state
• Sending or receiving shipments across state lines
• Making regular calls or sending emails to out-of-state clients

Even if you’re not directly handling sales, your work can still be protected under the law.

When the Whole Business Is Covered

The law doesn’t just look at individual workers. It also covers whole businesses if they meet certain conditions.

A business is covered by the FLSA if:

• It brings in at least $500,000 a year
• It has employees doing work tied to interstate commerce
• It deals with goods manufactured out of state
• It’s named specifically in the FLSA (like hospitals and schools)

For real estate and rental agencies, determining whether the $500,000 threshold is met means counting money made from:

• Rent collected from properties they own
• Management fees from rental properties
• Sales of properties
• Commissions and fees from selling insurance

What Employers Are Required to Do

If you’re a covered, non-exempt employee, your employer must follow the core protections outlined by the FLSA. That includes:

• Paying at least the federal minimum wage
• Pay overtime, at least 1.5 times your regular rate, for any hours worked over 40 in a week. If state law or a prevailing wage requires more, the higher rate applies.
• Paying wages on time, according to the company’s regular payday schedule
• Maintaining accurate payroll records, including hours worked and wages paid

Youth Labor Protections

The FLSA also outlines specific rules for younger workers:

• No one under 14 can be legally hired (with very limited exceptions)
• 14- and 15-year-olds can only work limited hours and in non-hazardous, approved jobs
• 16- and 17-year-olds may work more hours, but still can’t perform dangerous tasks or operate certain equipment

Not All Workers Qualify

Not every employee in real estate or rental agencies is covered by the FLSA’s minimum wage or overtime protections. Some roles are considered exempt, meaning the law doesn’t require employers to follow the same rules for them. Common exempt positions include:

• Executive employees
• Administrative employees
• Professional employees
• Outside salespeople

However, being exempt isn’t just about your job title; you must meet specific tests related to your job duties and salary level. Misclassification is common in the industry. If you’ve been told you’re exempt but still work long hours without overtime pay, your employer may be violating the law.

Common FLSA Issues in Real Estate and Rental Agencies

When the U.S. Department of Labor investigates real estate and rental agencies, it often uncovers the same types of violations. Some of the most common include:

• Improper Deductions: Charging employees for meals or lodging that primarily benefit the employer.
• Overcharging for Benefits: Billing employees full retail value for meals or housing, instead of the actual cost.
• Misreporting Business Volume: Miscalculating gross income by including or excluding the wrong revenue sources.

Here’s a quick example:

If the agency owns a rental property and collects rent, the entire rental income counts toward the agency’s gross business volume. But if the agency is only managing someone else’s property, only the management fees count, not the total rent collected.

Why It Matters

Misclassification and underpayment are more common than most people realize, especially in industries like real estate, where pay structures can be complex. Understanding how FLSA rules apply can help protect your rights and ensure you’re paid fairly for your work.

Get a Free Case Review

If you think your rights might’ve been violated, the labor and employment attorneys at Morgan & Morgan can help you understand what to do next. Reach out today to get started with a free case review.

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