There are so many things to consider when you are a new business owner, and one of the more confusing elements include employment laws. Following the law and federal regulations are very important, as the laws that cover businesses can be extensive. Whether you are a large corporation or a small business, it is important to be aware of what these laws are. Since they are constantly changing and often modified, here are four key laws to keep in mind if you are running a small business.
The Family and Medical Leave Act (FMLA)
The Family and Medical Leave Act can be misunderstood as it requires employers to cover employees a total of up to 12 weeks of unpaid leave during any 12-month period. According to the U.S. Department of Labor, the reasons include, “the birth and care of a newborn child of the employee, placement with the employee of a son or daughter for adoption or foster care, care for an immediate family member [spouse, child, or parent] with a serious health condition and taking of medical leave when the employee is unable to work because of a serious health condition.” The act was amended back in 2009 to include family members that were injured in the course of military service.
Age Discrimination in Employment Act (ADEA)
The Age Discrimination in Employment Act exists to protect individuals that are 40 years of age or older by prohibiting age discrimination in the workplace. This is applied to those companies that have more than 20 employees. It covers state, local and federal government. There are rare occasions when a bona fide occupational qualification comes in to play, such as in establishing an age limit for airline pilots.
U.S. Fair Labor Standards Act (FLSA)
In accordance with the Fair Labor Standards Act, when a business has $500,000 or more in sales, a law is required for minimum wage to be paid by the business to the employee. Currently, the federal minimum wage for nonexempt employees is set for $7.25. Let’s not forget overtime, which is set at time and half for work that is over 40 hours in a week. This law also protects children, as child labor laws are included in this act.
Having a proper title for employees is important when it comes to classification, so they can be paid for their title. Keep in mind that exempt employees are typically executive in level of authority and get paid a salary. These include those in management positions or above. The minimum wage law does not apply in this case. Remember not to use exempt classification to avoid paying any overtime. This also goes for independent contractors, those who create their own hours, work on their own time and are responsible for their own gains. IRS pays attention to these classification to keep an eye on businesses that are trying to avoid paying overtime.
This article was written by Elle Toussifor for CBS Small Business Pulse