Retail Workers: Are You Getting Paid Fairly? Know Your Rights.

Whether you’re running the register at a neighborhood boutique or managing a department at a national chain, retail jobs come in all shapes and sizes. But no matter the store, your employer has to follow federal labor rules that govern pay, hours, and working conditions.

These rules fall under the Fair Labor Standards Act (FLSA), a federal law that helps ensure retail workers are treated and paid fairly. Here's what to know if you’re working in retail or supervising a team.

What Counts as Retail

To qualify as a retail establishment under the FLSA, a business must meet two basic requirements:

• At least 75% of its income comes from sales to everyday customers (not other businesses)
• It's commonly recognized as a retail business within its industry

This includes places like:

• Clothing stores
• Electronics shops
• Home goods retailers
• Hair salons and service-based shops

When the FLSA Applies

The FLSA covers most retail workers if their employer makes $500,000 or more in annual revenue (excluding excise taxes). But even if the store doesn’t reach that threshold, you could still be covered individually based on the kind of work you do.

You're probably protected if your job regularly involves interstate activity, even small tasks. Here are some examples:

• Ordering inventory or supplies from out of state
• Answering calls or emails from customers in other states
• Shipping or receiving goods across state lines
• Keeping business records related to interstate commerce

If any part of your job touches these areas, FLSA coverage likely applies to you, even in a small retail setting.

What Retail Employers Are Required to Do

If a retail business or the individual employee is covered under the FLSA, the employer must follow some key rules:

• Pay at least the federal minimum wage.
• Pay overtime (time and a half) for any hours worked over 40 in a week.
• Accurately track hours worked, wages earned, and payroll deductions

Employees who earn a majority of their income in commissions instead of an hourly wage may be exempt from overtime, but only if strict criteria are met. Otherwise, standard wage and hour laws still apply.

Employers must also keep proper records to show they comply with wage laws. The exact records required depend on whether the worker is considered exempt or non-exempt and whether benefits like housing are provided.

Special Rules for Young Workers

The FLSA includes extra protections for workers under 18. These are especially relevant in retail, where many teens find their first jobs.

• Under 14: Cannot work in non-agricultural jobs
• Ages 14–15: Can work limited hours in approved jobs (e.g., cashiering, stocking, bagging)
• Ages 16–17: Can work unlimited hours, but still cannot do hazardous tasks (like operating heavy machinery)

There's also a youth minimum wage:

• Workers under 20 can be paid $4.25/hour for their first 90 consecutive calendar days on the job
• Employers cannot use this to displace older workers
• After the 90 days, or once the employee turns 20, the standard minimum wage applies

Common Wage Issues in Retail Jobs

Even with the FLSA in place, retail employers often make mistakes or break the rules outright. Here are some of the most common problems uncovered during federal investigations:

Not Paying for All Work Time

Time spent waiting at your station, prepping before opening, attending required meetings, or staying late at your manager’s request all count as work time. Unless you're completely off duty and free to use the time as you please, your employer must pay you.

Illegal Pay Deductions

Retail employees often handle cash or inventory, but that doesn’t give employers the right to deduct losses from your paycheck, especially if it brings your pay below minimum wage or cuts into overtime. This also applies to required uniforms or tools.

Misclassifying Salaried Workers

Getting paid a salary doesn’t automatically mean you’re exempt from overtime. To legally avoid paying overtime, employers must prove that your job duties meet very specific criteria. Many salaried retail workers still qualify for overtime—and don’t even know it.

Red Flags for Retail Workers

Watch out for these common warning signs that your employer may be violating wage laws:

• Being told to clock out but keep working
• Losing pay because of missing cash or products
• Working 40+ hours without overtime pay
• Earning a salary but doing non-exempt work
• Being scheduled but not paid for idle time on-site

Don’t Settle for Less

When these laws get ignored, workers lose out on money they’ve earned. And that money goes into the employer’s pockets. Don’t let them continue to get rich at your own expense.  Your role, hours, and how you’re paid make a difference.

If you believe something’s off about how you’re being treated at work and you need someone to review your case, please reach out to Morgan & Morgan today.

Our team of labor and employment attorneys might be able to represent you.

Disclaimer: This information is based on fact sheets that DOL provides.