By nature, employment laws are designed to protect employees. You may wonder where that leaves you, the employer. If you’re like many employers, fear of these laws can cause you to always err on the side of caution, giving workers more latitude than is required. On the other end of the spectrum, ignorance of employment laws can result in legal trouble with an employee, former employee or even a job applicant.
Rather than feeling like a victim of employment laws, strive to understand them. The more you educate yourself, the less chance you’ll make a legal misstep, and the better you can protect your best interests.
The first step to gaining control is to know which federal laws affect your business. You’ve probably heard of many of these, but some may surprise you. Keep in mind, these are complex laws, so consider this a general overview
For Businesses of All Sizes
- Fair Labor Standards Act (FLSA)
The FLSA, also known as the “wage and hour” law, sets standards that employers must follow for minimum wage, overtime pay, equal pay, recordkeeping and child labor. The FLSA is the most violated of any of the federal employment laws. The trickiest provisions — the ones every employer should take the time to understand — are the differences between exempt and non-exempt employees, and the rules for minimum wage and overtime pay.
- Immigration Reform and Control Act of 1986 (IRCA)
This law makes it illegal for employers to hire anyone who is not authorized to work in the United States. It also establishes mandatory procedures for verifying identity and work eligibility using the Form I-9, which must be completed by every employee (even family members).
- Occupational Safety and Health Act of 1970 (OSHA)
The goal of this law is to ensure safe working conditions for American workers through specific safety and health regulations called “standards.” This law covers a multitude of regulations, many of which are specific to certain industries (such as health care and construction), as well as general safety rules designed to keep all workplaces free from hazards.
- Equal Pay Act of 1963 (EPA)
This act requires equal pay for equal work by prohibiting employers from paying different wages to males and females who perform essentially the same job. This doesn’t mean every employee has to be paid the same amount. Certain factors do allow for pay differences, including seniority, qualifications and production output.
- Health Insurance Portability and Accountability Act (HIPAA)
This act contains provisions designed to help employees get healthcare coverage more easily. It also requires that an employee’s personal health information be kept private, unless proper consent is obtained.
- Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA)
USERRA establishes certain rights for employees who must take leave from a civilian job to serve in the U.S. military. It provides employment protection and job reinstatement rights to uniformed service members — including National Guard Members and Reservists — who are called into active duty.
- Consumer Credit Protection Act (CCPA)
This act shields employees from being terminated because their wages have been garnished for a single debt (e.g., credit card debt). The law also limits the amount of an employee’s earnings that can be garnished in any one week. Although employers cannot terminate an employee for one debt, they can discharge for additional garnishments.
- Employee Polygraph Protection Act of 1988 (EPPA)
The EPPA prevents virtually all businesses from using lie detector tests for pre-employment screenings or during employment. With restrictions, lie detectors may be used by private security firms and pharmaceutical companies. In addition, some private employers may use lie detectors when employees are suspected of involvement in a workplace incident that results in economic harm to the employer.
For Businesses with 15 or More Employees
- Americans with Disabilities Act of 1990 (ADA)
The ADA prohibits employment discrimination against qualified workers with disabilities. Under this law, employers must accommodate an individual’s condition in the workplace — as long as it does not pose an undue hardship on the business.
- Pregnancy Discrimination Act (PDA)
This act forbids discrimination based on pregnancy, childbirth or related medical conditions. Under the PDA, pregnant workers must be treated the same as any other temporarily disabled workers. As such, they are entitled to modified tasks, leave without pay, disability leave and alternate assignments as necessary.
- Title VII of the Civil Rights Act of 1964 (commonly called “Title Seven”)
Title VII prohibits employment discrimination based on race, color, religion, sex (gender) or national origin. Among its requirements, Title VII calls for employers to investigate and promptly correct any employee compliant of harassment or discrimination.
For Businesses with 20 or More Employees
- Age Discrimination in Employment Act of 1967 (ADEA)
This law protects employees 40 years and older from discrimination in the workplace. Employers must ensure that employment decisions — such as hiring, firing, promotion and demotion — are not based on age.
For Businesses with 50 or More Employees
- Family and Medical Leave Act (FMLA)
The FMLA requires certain employers (generally, businesses with more than 50 employees plus schools and government agencies regardless of employee count) to allow leave for qualified medical and family reasons, and hold the employee’s job while on leave. The leave can be unpaid and is limited to 12 weeks in any 12-month period. Also, newer employees (less than 12 months) and part-time employees (less than 1250 hours/year) are not covered by this law. The leave can be taken all at once or intermittently. Upon return, employees must be restored to their original position.
Beyond Federal Laws
Federal laws are your first area of concern. But you also must consider state and local regulations. For instance, many states have their own laws that set a minimum wage higher than the federal standard or prohibit discrimination based on factors that go beyond what is covered by federal laws. And, increasingly, local municipalities are passing laws that extend employee rights even further than state law. Contact your local Small Business Administration office for more information on additional regulations in your state, city or county.
For more information on employment laws and how to keep your business in compliance, download our free e-guide, Covering the Bases: A Beginner’s Guide to Employment Law.