One of the most important responsibilities of a business owner is to hire and retain effective employees. Today, the employee/employer relationship has been complicated by the myriad of complicated laws and regulations that govern this area. The US Department of Labor, for example, enforces more than 180 labor laws and regulations. The following are brief summaries of some of the more important employment laws that may apply to your business:
Fair Labor Standards Act (FLSA): FLSA contains the federal minimum wage and overtime standards. Under the law, the minimum wage is $7.25 per hour. In cases where an employee is subject to state and federal minimum wage laws, the employee is entitled to the higher minimum wage. For example, the minimum wage in Arizona is $7.35 (as of November 15, 2011), so a non-exempt employee in Arizona would be entitled to the Arizona rate. Within the law, many types of occupations or workers are specified as exempt from FLSA regulations and do not receive minimum wage or overtime benefits.
Title VII of the Civil Rights Act of 1964 (Title VII): Title VII is very broad and is the basis for much of the employment law dealing with discrimination. Prohibits employment discrimination on the basis of race, color, religion, sex, or national origin. Discrimination based on sex includes sexual harassment and discrimination based on pregnancy, work, or related medical conditions. This law applies to employers who have had more than 15 employees in the previous year.
Family and Medical Leave Act (FMLA): This law requires employers of 50 or more employees to provide up to 12 weeks of job-protected unpaid leave for certain family and medical reasons. Reasons for protected leave may include the birth or adoption of a child, the need to care for a seriously ill family member, or the inability to work due to a serious health condition.
Age Discrimination in Employment Act of 1967 (ADEA): The purpose of the ADEA is to protect workers age 40 and older. This law applies to private employers with 20 or more employees. In general, the ADEA prohibits an employer from firing, refusing to hire, or discriminating in any way against an employee age 40 or older. Although the law does not prohibit asking a job applicant for their age or date of birth, requests for age information can be carefully scrutinized to ensure that the inquiry was for a lawful purpose.
The Americans with Disabilities Act of 1990 (ADA): The ADA prohibits discrimination in hiring, firing, promotions, or other employment decisions against qualified individuals with disabilities. An employer cannot ask if an applicant is disabled or ask about the severity of a disability. However, an employer can usually ask if an applicant can perform job-related tasks, and employers can require that an individual demonstrate how job tasks will be performed. Employers are required to provide reasonable accommodations to employees with qualified disabilities. Employers with 15 or more employees are covered by the ADA.
Equal Pay Act of 1963 (EPA): The Equal Pay Act requires that men and women in the same workplace receive the same pay for the same work. The determination of whether the jobs are substantially the same depends on the job duties, not the job title. This law applies to all forms of employee compensation. Virtually all employers are covered by the EPA.
This is only a partial list of federal labor laws. Each of the states has additional laws and regulations that govern the employee/employer relationship. Failure to comply with any of the state or federal labor laws and regulations can result in costly litigation. Much of the litigation related to the employer/employee relationship can be avoided if certain procedures are followed and implemented.