Determining Which Employment Laws Are Applicable to Your Business
Laws regulating the employment relationship can come from different federal, state, or local sources and it can be confusing to figure out which ones are applicable to your workplace. Which ones apply depends on factors such as where your offices are located, how many people you employ in total and in each location, annual revenue, and the minimum number of employees specified in the particular employment law statute. Each law contains its own scope of coverage requirements and it is important to take the time to work through the information.
For example, as of 2005, federal laws such as Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act apply to all private employers, state and local governments, and educational institutions with 15 or more employees. They also apply to private and public employment agencies, labor organizations, and joint labor management committees controlling apprenticeship and training. Other federal laws, like the Age Discrimination in Employment Act, apply to all private employers with 20 or more employees, state and local governments (including school districts), employment agencies, and labor organizations.
The federal Equal Pay Act applies to all employers who are subject to the federal Fair Labor and Standards Act (FLSA). In general, the FLSA applies to almost all employers. In particular, in the private sector it generally applies to any company/organization with annual dollar volume of sales or receipts in the amount of $500,000 or more. (Note: For the FLSA to apply, there must be an "employment relationship.")
Complicating matters even further, employers based in the United States and employers based outside the United States that operate in the United States also are covered by some of the laws. For example, employers that are incorporated or based in the U.S. or are controlled by U.S. companies and that employ U.S. citizens outside the United States or its territories must comply with Title VII, the Age Discrimination in Employment Act, and the Americans with Disabilities Act with regard to all U.S. citizens in foreign offices. Multinational employers that operate in the United States (or its territories) must comply with certain federal equal employment opportunity laws to the same extent as U.S. employers, unless a treaty or other binding international agreement applicable to that employer limits the applicability of the laws.
State discrimination laws have their own eligibility requirements. For example, in California, the Fair Employment and Housing Act applies to employers who regularly employ more than five persons (with some exceptions for religious and nonprofit organizations). The California Family Rights Act applies to employers who do business in California and employ 50 or more full-time or part-time employees. California's wage and hour laws regulating minimum and overtime requirements apply to virtually all employers and different rules are applicable depending on the employer's industry. And keep in mind that in states like California with their own wage and hour laws, federal and state laws must be combined in order to be in compliance.
Some localities also have living wage requirements for employers who contract with the local government. And some localities have minimum wage requirements regardless of whether the employer has a local government contract. Other localities, like New York City, have their own discrimination laws that apply to employers of a certain size.
Employers cannot pick and choose which laws to follow, even if federal, state, and/or local law requirements overlap. Employers must comply with all federal, state, and local laws that are applicable, even if the laws have different legal standards. Sometimes, that means employers need to combine the laws and apply the provisions of each that are the most favorable to the employees.
As a result, employers must be certain that employee handbooks and other published policies are appropriately written based on the laws applicable in the different jurisdictions in which the handbooks are used. Multistate employers face particular challenges because it must also be determined whether to apply the federal, state, and local laws specific to each location or whether to combine the laws of all the jurisdictions and apply them uniformly across the board.
An employer may decide to write policies that apply a combination of the laws in every location while writing other policies more narrowly. For example, it could be very expensive for an employer to apply daily overtime standards in every state in which it has employees instead of only in those states where daily overtime is required. In other instances, it may be easier and more consistent with the corporate culture to apply the broader protections of some state and local discrimination laws in all locations in which a company does business rather than applying different employment standards to employees based on geographic limits.
The federal government and most states have informative Web sites intended to help you figure out which laws apply. It is a good idea to check those Web sites and then get advice from your human resources department and your legal counsel about the appropriate scope of coverage for your specific business.
Barrie Gross is former Vice President and Senior Corporate Counsel (Employment Law) for an international Fortune 1000 company and is a regular contributor to AllBusiness.com. She is the founder of Barrie Gross Consulting, a human resources training and consulting firm dedicated to assisting companies to manage and develop their human capital. Visit www.barriegrossconsulting.com to learn more about Barrie and the services BGC provides.
Note: The information here does not constitute legal advice and should not be relied upon as legal advice. If you have a legal issue or wish to obtain legal advice, you should consult an attorney in your area concerning your particular situation and facts. Nothing presented on this site or in this article establishes or should be construed as establishing an attorney-client or confidential relationship between you and Barrie Gross. This article is provided only as general information, which may or may not reflect the most current legal developments or be complete.
