The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments. As of July 2012, covered non-exempt workers are entitled to a minimum wage of $7.25 per hour (effective July 24, 2009) and overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek. New York and New Jersey also have minimum wage laws, where the rates are subject to change from the federal minimum wage rates. Additional laws applied to waiters and waitresses and employees who earn tips, especially those who share tips. Employers need to understand the qualified exemptions for overtime (such as the executive and administrative exemption) and create policies and procedures for paying employees who work overtime so that they will be in compliance with state and federal guidelines if an investigation is performed.