Employment Law Overview

Small business owners may need help complying with the ins and outs of employment law. Federal labor laws apply to any business with more than 50 employees. State laws can be even more restrictive. Employment laws protect workers' rights. They help employers ensure their employees don't face discrimination in the workplace.

This article provides an overview of federal workplace requirements. It includes links to the most recent updates to employment laws and regulations.

Employee Rights

Employees have many rights in the workplace. There are two types of rights: employment rights and civil rights.

Employment Rights

Workplace rights involve the right to compensation, benefits, a safe workspace, healthcare, and work hours. The federal government sets minimum standards, but state law usually controls workplace rights. For instance, state law establishes:

• Wages: The state sets its own minimum wage, which may differ from the Federal minimum wage. The federal minimum wage remains fixed at $7.25 an hour. In 2023, 14 states and the District of Columbia had minimum wages over $13 an hour.
• Work hours: There are no federally mandated minimum or maximum work hours. Unless a union has its own contract, states may set full-time, part-time, and overtime hours as they wish. California recently established its own standard for independent contractors this way. Employees under the Fair Labor Standards Act (FLSA) cannot work more than 40 hours per week without being paid overtime.
• Workplace safety: The federal Occupational Safety and Health Act sets standards. Each state has its own workplace safety department.
• Child labor: Federal law restricts the use of underage labor in certain industries. State law sets the ages at which minors may work in some jobs within the states and whether they need parental permission for other jobs.

Each state has its own requirements for workers' compensation insurance. Eligibility for employee benefits varies by state. Employers should contact their state Department of Labor to be sure all new hires receive coverage.

Civil Rights

Employees have basic civil rights at work, protected by the Fourteenth Amendment right to due process. All employees have the right to work in a safe environment without harassment and discrimination. Federal and state laws prohibit:

• Discrimination based on race, gender, color, sexual orientation, religion, or national origin
• Sexual harassment, bullying, intimidation, threatening, or quid pro quo of any kind
• Unequal rate of pay for equal work done
• Hostile work environment

In larger companies, human resources departments can keep up with these matters. In small businesses, the owner should keep up with any changes in employment law.

Federal Employment Laws

Federal law deals with laws protecting employees against discrimination and harassment. These laws protect employees, job applicants, and employers. Congress creates federal employment laws. Federal agencies enforce the laws, ensuring equal treatment among all American workers.

Fair Labor Standards Act (FLSA). President Franklin Roosevelt enacted the FLSA in 1938, the most venerable of employment rights acts. It has been amended several times, most notably by the Equal Pay Act of 1963. It set minimum wage standards, recordkeeping requirements, and child labor laws. It also requires employers to provide overtime pay for nonexempt employees who work more than 40 hours in a given workweek.

Title VII of the Civil Rights Act of 1964 bars employers from discriminating against employees based on race, gender, color, national origin, or religion. Title VII is the basis for nearly all other federal anti-discrimination laws created in the last 60 years.

Americans with Disabilities Act (ADA) requires equal treatment for workers with a physical or mental impairment substantially limiting one or more major life activities. Employers must make reasonable accommodations for eligible employees under the ADA.

The Family and Medical Leave Act (FMLA) requires employers with 50 or more employees to provide 12 weeks of unpaid leave to eligible employees for maternity or paternity leave or to care for their own or a family member's serious medical condition. FMLA may supplement an employee's sick leave.

Age Discrimination in Employment Act (ADEA) bars discrimination if the worker is 40 years of age or older. It prevents the selective firing of older workers in favor of younger ones.

National Labor Relations Act (NLRA): This act protects workers' rights to unionize. This includes the right to collective bargaining and the right to discuss unionization on company property.

Affordable Care Act (ACA): The employer mandate of the ACA requires employers with more than 50 full-time workers to offer health insurance to at least 95% of eligible employees. There are penalties for failure to follow the mandate.

Consolidated Omnibus Budget Reconciliation Act (COBRA): Requires health insurance coverage to be extended for a specific period of time for employees who are fired or laid off.

Employers must be aware of the legal rights their workers have. Even smaller businesses must follow federal guidelines about non-discrimination, safety, and healthcare.

Government Employment Agencies and Laws

If employers or employees have questions about federal regulations, agencies are responsible for helping with compliance. Business owners can contact their state offices for help.

U.S. Department of Labor: The DOL handles all information about the acts and new laws. Their offices can provide guidance on a wide range of questions.

Equal Employment Opportunity Commission (EEOC): The EEOC ensures that all employees get fair treatment. This is where anti-discrimination investigations begin. Each state has a satellite EEOC office to handle state complaints.

Occupational Safety and Health Administration (OSHA): This office sets general workplace safety and health guidelines. Employers must meet these general guidelines according to state-specific regulations.

Social Security Administration (SSA): The SSA manages retirement, disability, and medical benefits for workers and guides employers on payroll withholdings.

Hiring an Employment Law Attorney

Small business owners must wear many hats. They don't have time to excel at every aspect of business management. Contact an employment law attorney when you need help with your business duties. Legal advice can help you stay current with your legal obligations.