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 large number of complicated laws and regulations governing this area. The United States Department of Labor, for example, enforces more than 180 employment laws and regulations. The following are brief summaries on some of the biggest employment laws that may apply to your business:
Fair Labor Standards Act (FLSA): FLSA contains the federal minimum wage and overtime standards. According to the act, the minimum wage is $7.25 per hour. In cases where an employee is subject to both 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 act, many types of occupations or workers are specified as exempt from the standards of the FLSA 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 of much of the employment law that deals with discrimination. It prohibits employment discrimination based on race, color, religion, sex, or national origin. Discrimination based on sex includes sexual harassment and discrimination based on pregnancy, childbirth or related medical conditions. This act applies to employers that have had more than 15 employees in the previous year.
Family and Medical Leave Act (FMLA): This act requires employers of 50 or more employees to give up to 12 weeks of unpaid job-protected leave for certain medical and family 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 inability to work because of a serious health condition.
Age Discrimination in Employment Act of 1967 (ADEA): The purpose of the ADEA is to protect workers who are age 40 or older. This act applies to private employers with 20 or more employees. Generally, the ADEA prohibits an employer from firing, refusing to hire, or discriminating in any way against an employee age 40 or older. Although the act does not prohibit asking a job applicant his age or date of birth, requests for age information may be closely scrutinized to ensure that the inquiry was made 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 whether an applicant is disabled or ask about the severity of a disability. However, an employer can usually ask whether an applicant can perform job-related tasks, and employers can require that an individual demonstrate how job duties will be accomplished. 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 be given equal pay for equal work. Determination of whether the jobs are substantially equal depends on the job duties, not the job title. This act applies to all forms of employee compensation. Virtually all employers are covered under the EPA.
This is only a partial list of federal employment laws. Each of the states has additional laws and regulations that govern the employee/employer relationship. Failure to follow any of the state or federal employment laws and regulations may result in costly litigation. Much of the litigation regarding the employer/employee relationship can be prevented if certain procedures are followed and put in place.