Laws That Apply

My business is growing and I’m hiring employees, which laws apply?

As a business grows and more employees are hired, the scope of responsibility increases as more regulations and laws come into play, but having even one employee requires knowledge and diligence in seeking the answers to the compliance questions. Many times business owners don’t have the time or inclination to search out the appropriate agency and regulations, or to complete the paperwork necessary to be in compliance. Here is a listing of the basic federal laws and regulations and the employee level necessary for compliance by employers in most general industries.

Employment regulations are complicated. There are state and federal requirements governing aspects of every business and there are other regulations specific to each industry and profession. Many states have a clearinghouse for employment-related information. Recently the U.S. Department of Labor established a website called “E-Laws Advisors” for easier research into federal labor regulations. The site’s URL is www.dol.gov/elaws.

Here is a listing of the basic federal laws and regulations and the employee level necessary for compliance by employers in most general industries. Certain specific industries have additional regulations. This is a listing only of federal laws. Many states have additional or more restrictive laws governing employment. Generally, when state and federal laws conflict, the law that is most favorable to the employee, and more restrictive to the employer must be followed. It is essential that employers be aware of both federal and state employment laws.

 

ONE OR MORE EMPLOYEES:

Federal and State Payroll Withholding Regulations

IRS Withholding

FICA (Social Security Withholding)

Medicare Withholding

Garnishments and Wage Liens

Child Support Withholding

 

Federal and State Wage and Hour Laws

Fair Labor Standards Act (FLSA) --Specifies wages, hours and working conditions --Specifies record keeping requirements --Regulates employment of minors

Equal Pay Act of l963 --Requires equal pay for equal work --Prohibits discrimination in pay based on employee’s sex

 

National Labor Relations Act (NLRA)

Gives employees the right to organize, join unions, and engage in collective bargaining

Protects against unfair labor practices

 

Employee Retirement Income Security Act of 1974 (ERISA)

Regulates pension and retirement plans

Regulates welfare benefits plans (health and life insurance)

 

Health Insurance Portability and Accountability Act of 1996 (HIPAA)

Covers any employer that offers health coverage to employees

Requires disclosure notices and certificates of coverage when employee’s coverage ends

 

Immigration Reform and Control Act of 1986

Requires employers to verify identity and employment eligibility for people hired after November 6, 1986 (Form I-9)

Requires workplace poster

 

Occupational Safety and Health Act of 1970 (OSHA)

Federal law that may be enforced by state law whose regulations equal or exceed federal requirements

Requires workplace free of hazards that may cause death or serious physical harm

Requires workplace poster

 

Employee Polygraph Protection Act of 1988

Generally prohibits use of polygraph and lie detectors by employers

Requires workplace poster

 

Rehabilitation Act of 1973

Covers employers with federal government contracts of $2,500 or more or who receive federal financial assistance

Requires employers to reasonably accommodate disabled employees and job applicants (substantially similar to Americans with Disabilities Act [ADA])

 

Uniformed Services Employment and Re-employment Rights Act of 1994

Guarantees re-employment rights to employees after military service

Requires employeProhibits discrimination against employees for activities required by service in the military, state National Guard or uniformed civilian service

 

Consumer Credit Protection Act

Prohibits employers from discharging an employee because of one garnishment of wages

 

The Fair Credit Reporting Act

Requires employers who reject job applicants because of written credit report to give applicant notice and supply name and address of credit reporting agency issuing the report

 

Whistle Blower Laws

Protect employees from retaliation for reporting violations by employers of certain safety and/or environmental standards

 

Personal Responsibility and Work Opportunity Reconciliation Act of 1996

Requires all employers to submit information about every new hire within 20 days of hire

Each state designates appropriate agency to receive the information

 

Omnibus Transportation Employee Testing Act

Requires employers in the transportation industry (FHWA, FRA, FTA, FAA, and RSPA) to implement alcohol and drug testing programs, maintain records related to testing, and provide drug and alcohol education to employees

 

FOUR OR MORE EMPLOYEES:

Immigration Reform and Control Act of 1986

Protects against discrimination based on national origin

 

FIFTEEN OR MORE EMPLOYEES:

Title VII of the Civil Rights Act of 1964

Requires equal employment opportunity

Protects against discrimination based on race, color, religion, sex and national origin

Protects against sexual harassment in the workplace

Requires workplace poster

 

Pregnancy Discrimination Act of 1978

Defines pregnancy as a temporary disability and requires accommodation on the job

Guarantees right to return to same or similar job with same pay following the disability

 

Drug-Free Workplace Act of 1988

Requires federal contractors with contracts of $100,000 or more to maintain a drug-free workplace and follow specific regulations involving drug-testing and employee notification

Requires random drug testing for federal workers holding sensitive jobs

Requires testing in certain employees regulated by the U.S. Department of Transportation

 

Americans with Disabilities Act of 1990

Provides protection in employment for people who are physically or mentally disabled

Requires reasonable accommodation for those otherwise qualified to perform essential job functions

Requires workplace poster

 

Civil Rights Act of 1991

Allows jury trials for employment discrimination cases

Sets limits on punitive damage awards

Establishes employer requirements for defense

 

TWENTY OR MORE EMPLOYEES:

Age Discrimination in Employment Act of 1967 (ADEA)

Protects against discrimination in employment for employees are at least 40 years of age

 

Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA)

Requires employers who provide certain benefit programs to offer continuation coverage to former employees and their dependents.

Employer may bill cost to former employee along with administrative fee of up to 2% of the cost

 

FIFTY OR MORE EMPLOYEES:

Family and Medical Leave Act (FMLA)

Allows employees with more than one year of service to be eligible for up to 12 weeks unpaid leave in a 12-months period after childbirth or adoption, to care for a seriously ill child, spouse or parent, or for the employee’s own serious illness.

Requires employers to continue to pay for benefit coverage for employees on FMLA leave

Guarantees return to work for same or similar job at same pay

Prohibits discrimination against anyone exercising these provisions

Enforced by the U.S. Equal Employment Opportunity Commission (EEOC)

 

Executive Order 11246 – Affirmative Action

Requires a written Affirmative Action Plan (AAP) for minorities and women by federal contractors with $50,000 or more in contracts and 50 or more employees; all federal funds depositories (i.e. banks); and all paying agents for U.S. Savings Bonds

Requires goals and timetables for elimination of underutilization of minorities and females in any job group.

NOTE: Federal contractors with contracts or subcontracts valued at $10,000 or more in 12 months, must have a written AAP for disabled and veterans

 

ONE HUNDRED OR MORE EMPLOYEES:

Workers Adjustment and Retraining Notification Act of 1988 (WARN)

Requires employers to provide 60 days’ notice to employees of plant closing or mass layoffs (employment loss of 50 or more people, excluding part-time workers)

Requires notification of public officials in surrounding communities

 

Equal Employment Opportunity Commission Regulations (EEOC)

Requires employers of 100 or more and all federal government contractors and subcontractors who have both a contract of $50,000 or more and 50 or more employees, to file a Standard Form 100 report be September 30 of each year showing sex and ethnic breakdown of workforce statistics within EEO job categories

Additional detailed reports of distribution by compensation is required of some employers

This information is only intended as a summary of federal laws and regulations applying to employers. It is not meant to be construed as legal advice. Many states enact laws to supplement or expand upon federal legislation and many enact laws particular to employers in that state only. In addition to the federal regulations, all employers should carefully research the laws applicable to the state in which the business is located.