There are a lot of compliance laws you need to be aware of as an employer. In fact, there are so many employment laws it may feel overwhelming to try and keep up with all of them, especially if you don’t even know where to start. Below are some of the most important payroll and HR laws to know to keep your small business in compliance.
Falling out of compliance with payroll laws can result in substantial lawsuits and thousands of dollars in reimbursements that can significantly damage your company. You should be aware of the regulations under the Fair Labor Standards Act (FLSA). These include minimum wage, overtime pay, and compensable time among other things. Additionally, employers should keep track of state mandated wage payment laws such as pay periods, final payment laws, and required pay methods.
There are many laws that prohibit discrimination in any aspect. Laws like the Pregnancy Discrimination Act (PDA), Age Discrimination in Employment Act (ADEA), Uniformed Services Employment and Reemployment Rights Act (USERRA), and Americans with Disabilities Act (ADA) protect certain demographics from discrimination in the hiring or promoting process and preventing employees from being fired for discriminatory reasons. Another discrimination law, the Equal Pay Act (EPA), prevents basing salary off sex, and instead requires the same pay for the same work regardless of sex. The Civil Rights Act takes a broader approach and bans all employment discrimination based on race, sex, color, religion, or national origin.
While there are many benefits that are optional for employers to offer, there are also some benefits mandated by state or federal law. These include:
- Affordable Care Act (ACA) – The ACA contains requirements for some employers that still apply. The size and structure of your workforce determines what applies to you. Applicable Large Employers (ALEs) are required to offer health coverage to at least 95% of full-time employees or potentially pay a tax penalty (sometimes called pay or play). In addition, the ACA reporting requirement under Code Section 6056 requires ALEs to submit annual reports to the IRS and written statements to employees that include data about medical plans offered, the cost of coverage and enrollment.
- COBRA – COBRA applies to employers with more than 20 employees requires employers who offer benefits to employee to continue those benefits for up to 18 months after an employee separates from your company. Some states have separate COBRA requirements, so be sure to understand how these apply to your company and your employees.
- FMLA – The Family Medical Leave Act (FMLA) gives employees up to 12 weeks of unpaid leave for certain family or medical reasons. This law applies to employers with 50 or more employees, but smaller employers can opt-in.
- Paid Leave – Certain states require paid leave, often paid for by employer or employee taxes. Make sure you understand the paid leave laws in each state where you have employees.
Certain laws need to be followed when hiring new employees to ensure you stay in compliance. As a small business, the number of employees you have determines which of the EEOC’s laws are applicable in your workplace. The fewer employees you have, the less applies to your hiring practices. It’s still a good idea to stay up to date with EEOC guidelines in case your business expands in the future. Additionally, all workplaces are required to have employees fill out certain forms, including Form W-4 and Form I-9 at the beginning of employment.
The Fair Labor Standards Act (FLSA) requires employers to keep employee payroll records in a confidential and secure location for a minimum of 3 years. These records should include an employee’s basic information, their social security number, their total hours worked per week, the basis of pay, the employee’s regular pay rate, and their total earnings per week. In addition to the FLSA, other employment laws have recordkeeping requirements. Make sure you understand what you are required to keep and for how long.
Keeping up with compliance laws is difficult but following the information in this article can help you get a good start. Do you have more questions? Reach out to Helpside at firstname.lastname@example.org to speak to one of our employment law experts.