Staying up to date on labor laws is vital to running a small business. Not only is it the right thing to do for your employees and your company’s reputation, but the fines associated with non-compliance are extensive. You’ve probably seen the headlines:
- Minnesota lawn care and snow removal company paid $157,638 in back wages and damages to 72 employees.
- Florida locations of Joey’s New York Pizza LLC paid $74,955 in back wages to 31 workers who were denied overtime pay in violation of the FLSA
- A Chicago area grocer paid more than $144,000 in back wages to 14 workers after our investigation found employees at three stores were misclassified as exempt from overtime.
Small businesses can’t afford to fall out of compliance. It isn’t just business owners or HR professionals that need to understand these laws. Every one of your managers needs to have a clear understanding of how these basic employment laws impact the employment relationship. (Check out this blog from our Director of HR on this very topic.)
Here are the five employment laws you could be breaking:
Fair Labor Standards Act (FLSA)
The FLSA applies to nearly everyone who has employees, so it is important to understand. Some of the regulations included in the FLSA are minimum wage requirements, overtime pay, what is considered paid time (for example, time putting on a uniform or safety equipment, time waiting to work and time traveling between jobs). The FLSA also includes child labor laws. If you have employees under the age of 18, it is important to understand what restrictions may apply.
Family Medical Leave Act (FMLA)
Simply put, FMLA is a federal law that requires employers with 50 or more employees (within a 75 mile radius) to allow employees up to 12 weeks of unpaid time off for the treatment of a medical condition or to care for a family member with a medical condition. This law also applies to bonding time after birth, adoption, or placement of a foster child. For an employee to qualify for FMLA leave, the employee has to have worked for the company for at least one year and worked a minimum of 1,250 hours. Employers are required to allow the employee time off and upon return reinstate the employee to their same position at the same pay, or a similar position (same level of responsibility) and the same pay. The law also has requirements for continuing group benefits, notifications to eligible employees, communications between the employer and employee during leave, and additional leave for military personnel.
Americans with Disabilities Act (ADA)
The ADA prohibits employment discrimination on the basis of disability and requires that employers with 15 or more employees provide reasonable accommodations for employees with disabilities.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
COBRA requires that employers with 20 or more employees who offer employer-sponsored group health , dental, and vision plans to continue to offer coverage to eligible employees and their dependents after termination. While many group health plan providers or brokers offer COBRA administration (or can recommend a third-party administrator who can help facilitate), it is ultimately the employer’s responsibility to ensure compliance with these complex regulations including timely notification to employees.
State-specific employment laws
In addition to these federal employment laws, each state has their own laws governing employment. Some of the common laws that vary from state to state include minimum wage, paid leave, paid breaks, vacation pay-out, and wage payment requirements (including final pay). Employers must understand the laws in any state where they have employees.
Bonus Laws- Discrimination
There are a number of laws, including the Civil Rights Act, the Age Discrimination in Employment Act (ADEA), the Equal Pay Act (EPA), the Pregnancy Discrimination Act (PDA), and the Uniformed Services Employment and Reemployment Rights Act (USERRA) that protect employees from discrimination on the basis of race, age, gender, pregnancy, religion, and military service.
Being in the HR industry for more than 30 years, we have seen many companies make costly mistakes with employment laws. In most cases, employers are breaking the law simply because they don’t understand them. Unfortunately, ignorance is not a good defense when the EEOC or Department of Labor come to check up on you.
Helpside works with small businesses to help them stay in compliance and avoid unnecessary liability. If you have questions about employment laws or HR practices in your company, reach out to us for a free consultation.