You want to treat your employees fairly and provide a healthy work environment for all. But in the real world, things sometimes get messy. You have an employee who needs time off, but he's the only person who can do his job. Someone is upset about being passed over for a promotion. Another employee is allergic to a coworker's perfume. And someone is “dishing the company tea" on social media.
In human resources (HR) training, every ethical challenge has a tidy answer. In practice, it's often quite difficult to find solutions that everyone agrees are fair and right.
Federal employment laws are nice, tidy guide rails for your business. While they don't resolve every HR dilemma, they give you a framework for handling many of the complexities involved in employing people.
This article covers nine types of federal labor laws you need to know and when they apply to small businesses. Most of the laws contain provisions that:
- Prohibit you from punishing employees for exercising their rights
- Require you to keep certain records for specific periods, sometimes in secure files
- Require you to post the laws prominently in your workplace
Many state laws provide overlapping protections to employees. Where more than one law applies to your workplace, you must generally comply with the strictest standard. For example, if your city has a higher minimum wage than the federal one, you must pay the higher city wage to employees in that location.
Here's a breakdown of the key U.S. labor laws to follow as you expand your small business.
1. Wage and hour laws
Federal wage and hour protections are encoded in the , which is enforced by the U.S. Department of Labor's (DOL's) Wage and Hour Division. Canadian employees are covered by a similar law called the Employment Standards Act.
The FLSA establishes a federal minimum wage of $7.25 per hour, or $2.13 per hour for . It also requires nonexempt employees to receive overtime at one-and-a-half times the base pay rate for all hours worked beyond 40 in a workweek.
Under the law, you can't get out of paying overtime by declaring an hourly employee exempt. Consult the DOL's on exempt employees for details. The FLSA does not have special rules for part-time vs. full-time employees. It protects all employees equally.
While the FLSA doesn't have a specific deadline for paying employees, the DOL has held that you must pay employees all wages owed, including overtime, by the next regular payday. If pay is delayed, you're going to need a very compelling reason.
The FLSA also prohibits misclassifying common law employees as independent contractors. On Jan. 6, 2021, the DOL announced for determining a worker’s status under the FLSA. Be sure to read the new rules when determining this.
2. Employment eligibility laws
It's up to you to verify eligibility by collecting acceptable identification and filling out an Employment Eligibility Verification Form (I-9). Under the INA, you must keep I-9s on file for at least three years or one year after employment ends, whichever is longer.
3. Equal pay laws
The applies to all employers. It requires you to provide equal pay to women and men for equivalent work. The work doesn't have to be identical, merely "substantially equal." If you discover unequal pay, you can't cut anyone's pay to correct the disparity. You have to give the lesser-paid employee a raise.
4. Equal employment opportunity (EEO) laws
EEO laws prohibit you from showing bias in any aspect of employment, including hiring, firing, pay, job duties, promotions, training, benefits, and hours. A host of EEO laws protects employees with specific characteristics, such as age and race. In addition to prohibiting discrimination, the laws prohibit harassment based on a protected characteristic and retaliation against employees who file discrimination complaints.
That's why you can't simply fire someone for any reason, despite everything you may have heard about at-will employment. The reason has to be legal.
The further protects employees from discrimination based on their genetic information. For example, you can't require employees to undergo genetic testing before they enroll in a health care plan. GINA records must be stored securely.
The requires you to make reasonable accommodations to job applicants and employees with disabilities. It also prohibits you from asking about a disability during job interviews, discriminating against an employee who requests an accommodation, or discriminating more generally against applicants and employees based on perceived disabilities.
ADA records must also be secured at all times. HR software can help you securely store and access all of these critical documents without cumbersome paper files.
5. Leave laws
The applies to businesses with 50 or more employees. It guarantees up to 12 weeks of unpaid leave to employees to care for a newborn or adopted child or a sick family member. FMLA also provides up to 26 weeks of leave to care for a covered service member.
6. Occupational safety laws
The requires you to provide a safe workplace. The law applies to most employers. Under OSHA, you may have to use certain equipment, train employees, or provide ergonomic aids to protect workers from injuries.
7. Whistleblower laws
8. Employee benefit laws
The protects employees from discrimination in health plan enrollment and premium charges. That means your health plan can't deny an employee coverage or charge more based on health factors. It also can't require employees to make lifestyle changes or meet certain wellness criteria to participate in group health plans.
HIPAA also guarantees employees' rights to enroll in health plans based on certain life events, such as marriage and childbirth.
The provides similar protections, including barring employers from excluding employees from health plans based on preexisting health conditions. The ACA further requires employers with 50 or more employees to offer health insurance to their workers or make an payment to the Internal Revenue Service (IRS).
9. Labor relations laws
The protects your employees' rights to join or form unions (or decline to join them). It also protects their right to engage in related protected employee acts such as talking with one another about their working conditions. This may include comments about your company made outside of work and on social media.
Accentuate the positive
All of these laws provide a framework for your employee relations. Most will benefit your company even if you haven't reached the size where they apply because they can help you create a fairer workplace. This is especially important as you grow and more of your decisions are delegated to managers and supervisors.
In fact, by embracing the laws and training employees in how they apply at work, you can give your employees guidance for their everyday interactions with one another. And you can provide clear pathways for addressing those inevitable times when conflicts arise.
In too many workplaces, HR compliance begins and ends with a handful of posters tacked up in the breakroom next to the pizza menus and softball fliers. That's a missed opportunity.
Don't just post the laws and move on to the next task. Use them as tools to fortify your workplace and empower your people. Carve some time out for team training in EEO and workplace safety. Your company will be stronger and better for it.