Gavin Howe
There are a plethora of federal and state employment laws that small businesses need to be aware of. These laws cover everything from the right to unionize to using polygraph tests. While some laws only apply to businesses with a certain number of employees, there are a handful of federal employment laws that apply to all businesses, regardless of size. These include the Fair Labor Standards Act (FLSA), which regulates employee pay and establishes a national minimum wage, and the National Labor Relations Act (NLRA), which gives employees the right to unionize. Other laws such as the Immigration Reform and Control Act (IRCA) and the Occupational Health and Safety Act (OSH Act) are also important for small businesses to understand and comply with.
| Characteristics | Values |
|---|---|
| Minimum wage | $7.25 per hour, or $2.13 per hour for tipped employees |
| Overtime pay | 1.5 times the base pay rate for all hours worked beyond 40 in a workweek |
| Record-keeping | Employers must keep employee time and payroll records |
| Child labor laws | Employers must ensure their workplace is safe and doesn't threaten the well-being or schooling of young staff |
| Anti-discrimination laws | Employers must provide equal pay for equal work to male and female employees |
| Whistleblower protection | Employees are protected from termination or retaliation if they expose or report a company's violations |
| Workplace safety | Employers must provide a safe workplace, free from recognized hazards that are likely to cause death or serious harm to employees |
| Employee benefits | Employers must responsibly and equitably manage retirement, health, and other benefit plans |
What You'll Learn
Minimum wage and overtime pay
The Fair Labor Standards Act (FLSA) establishes the minimum wage and overtime pay for covered employees. The federal minimum wage is currently $7.25 per hour, but this may be higher depending on the state or city in which a business operates. For example, employers of tipped employees must pay a minimum of $2.13 per hour. Employers of young workers under 20 years old are permitted to pay a minimum wage of $4.25 per hour for the first 90 days of employment. Small agricultural businesses may be exempt from minimum wage regulations.
The FLSA also requires that covered employees who work more than 40 hours per week receive overtime pay at a rate of one-and-a-half times their regular rate of pay. However, many types of workers are exempt from these overtime requirements, including executives, administrative employees, professional employees, outside salespeople, and computer system analysts and programmers.
Employers must also keep records of employee wages and hours, as well as maintain certain posters in the workplace outlining the requirements of the FLSA.
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Discrimination and equal pay
Discrimination
Discrimination law covers a range of characteristics, including race, colour, religion, sex, national origin, age, disability, and genetic information. Discrimination laws also cover pregnancy, sexual orientation, and gender identity.
If your business has 15-19 employees, you are covered by the laws that prohibit discrimination based on the characteristics listed above. If your business has 20 or more employees, the same laws apply, with the addition of age (40 or older).
It is also illegal to use employment policies or practices that negatively affect applicants or employees of a particular race, colour, religion, sex, or national origin, or applicants or employees with disabilities, unless these policies are directly related to the job and necessary for the business.
Equal Pay
The Equal Pay Act (EPA) applies to all employers and requires equal pay for men and women doing "substantially equal" jobs. The work does not have to be identical, but if unequal pay is discovered, the lower-paid employee must receive a raise to match their counterpart.
Posters and Record-Keeping
It is the employer's responsibility to display posters that describe federal employment discrimination laws and keep relevant employment records.
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Child labour laws
United States
In the United States, the Fair Labor Standards Act of 1938 (FLSA) restricts the employment and abuse of child workers. Under the FLSA, for non-agricultural jobs, children under 14 may not be employed, children between 14 and 16 may be employed in allowed occupations during limited hours, and children between 16 and 17 may be employed for unlimited hours in non-hazardous occupations. There are exceptions to these rules, such as for employment by parents, newspaper delivery, and child actors. The regulations for agricultural employment are generally less strict.
United Kingdom
In the UK, a succession of laws on child labour, the Factory Acts, were passed in the 19th century. In 1833, the UK passed the Factory Act, which restricted child labour. Children younger than 9 were not allowed to work, and those aged 9-16 could work 12 hours per day per the Cotton Mills Act. In 1856, the law permitted child labour past the age of 9, for 60 hours per week, night or day. In 1901, the permissible child labour age was raised to 12.
International
The International Labour Organization (ILO) works to set global minimum standards of labour. The ILO contains 186 nations that have vowed to maintain the minimum labour requirements in these conventions. The ILO's first conventions were drafted in 1973 and have since been modified several times.
The International Programme on the Elimination of Child Labour (IPEC) is an organisation established by the ILO in 1992 that focuses on the elimination of all forms of child labour. IPEC uses programs to remove children from working environments and places them in educational settings.
Other Countries
Many other countries have also implemented laws and initiatives to address child labour. For example, in 2014, there were changes and laws passed in several Asian and Pacific Island countries, and Sub-Saharan African countries have also seen an increase in child labour laws.
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Workplace safety
OSHA requires employers to provide a workplace free of recognised hazards that are likely to cause death or serious physical harm to employees. This includes providing safety data sheets about harmful chemicals on-site and displaying posters or information outlining workers' rights and how to report safety issues.
The Act also stipulates that employers must report accidents resulting in death or hospitalisation of employees and keep records of their efforts to comply with the law.
The Department of Labor's Wage and Hour Division enforces OSHA, and it may conduct on-site inspections of workplaces, either at random or in response to a complaint about unsafe conditions.
Businesses that fail to comply with OSHA can face substantial penalties and additional workplace standards set by the Department of Labor. Employees can complain to OSHA about safety hazards and violations, but they cannot sue their employers directly for violations of the Act.
In addition to OSHA, the Fair Labor Standards Act (FLSA) also covers workplace safety for young workers, including detailed limitations on hours for children under 16. The FLSA is enforced by the Wage and Hour Division of the Department of Labor and applies to most private, state, and local government employment.
Furthermore, the Immigration Reform and Control Act (IRCA) requires employers to verify that their employees are legally authorised to work in the country. This includes completing Form I-9 and examining documents that establish the worker's identity and work authorisation.
By adhering to these laws, small businesses can ensure they provide a safe and compliant working environment for their employees.
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Whistleblower protection
Small businesses must comply with various federal labor and employment laws. Whistleblower protection is a crucial aspect of employment law, and there are several programs and acts in place to protect employees who report violations or unsafe working conditions.
The Occupational Safety and Health Administration (OSHA) Whistleblower Protection Program is a federal program that safeguards employees from retaliation or adverse actions by their employers. Retaliation can include firing, demotion, denial of overtime or promotion, or reduction in pay or hours. Employees are protected when reporting issues related to consumer product and food safety, environmental protection, family and medical leave, fraud and financial issues, lie detector testing, military status and obligations, and transportation services.
The OSHA program specifically protects employees who expose or report company violations, allowing them to express their concerns without fear of repercussions. Employees are also protected under the National Labor Relations Act, which grants them the right to engage in "concerted activity" and discuss work-related issues such as safety and health concerns.
Additionally, the Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, record-keeping, and youth employment standards, further protecting employees who report violations.
To ensure compliance, small businesses should familiarize themselves with these laws and their specific requirements. By understanding the legal landscape, businesses can avoid legal trouble, provide a safe work environment for their employees, and foster a culture where employees feel comfortable speaking up about workplace violations or unsafe conditions.
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Frequently asked questions
The FLSA is a federal law that establishes the minimum wage, overtime pay, record-keeping, and child labor standards. It applies to most full-time and part-time workers in the private sector and in federal, state, and local governments. Small businesses, regardless of the number of employees, are required to comply with minimum wage and overtime regulations.
The NLRA gives employees the right to unionize and protects their right to do so. It applies to all private employers, including non-union companies, whose operations affect interstate commerce. The law prohibits employers from unfairly influencing workers' decisions to join or form a union and establishes procedures for union elections.
EEO laws prohibit employers from showing bias in any aspect of employment, including hiring, firing, pay, promotions, and benefits. These laws protect employees with specific characteristics such as age, race, sex, religion, national origin, and disability. Depending on the number of employees, different laws may apply. For example, Title VII of the Civil Rights Act applies to businesses with 15 or more employees, while the Age Discrimination in Employment Act (ADEA) applies to those with 20 or more.
The FMLA requires certain employers to provide eligible workers with up to 12 weeks of unpaid, job-protected leave for family and medical reasons over a 12-month period. This typically applies to businesses with 50 or more employees, though some states may have different thresholds.
Yes, the FLSA sets rules for employing young workers, including detailed limitations on hours for children under 16. Additionally, child labor laws vary by state, so it is important to check the specific regulations in your area. Employers have a responsibility to ensure the workplace is safe and does not jeopardize the well-being or education of minor employees.
