Wage and Hour Laws
What are wage and hour laws?
Wage and hour laws are regulations that affect employers, employees and employment in general. In the US, there are federal, state and local wage and hour laws. In addition, there are wage and hour regulations set by unions.
The term ‘wage and hour’ generally refer to requirements that specifically involve wages and work hours. However, many employment laws have a wage or hour component, therefore, some people consider any law affecting employment as a ‘wage and hour’ law.
Wage and hour laws that affect most employers:
- Minimum wage
- Child labor
- Overtime laws
- Meals and rest breaks
- Sick leave
- Employee classification (exempt vs. non-exempt)
What are the federal wage and hour laws?
The following federal laws apply to employment:
- FLSA (Fair Labor Standards Act)
- FMLA (Family and Medical Leave Act)
- EEOC (Equal Employment Opportunity Commission)
- ADA (American with Disabilities Act)
- ACA (Affordable Care Act)
- Occupational Safety and Health Act (OSHA)
- Payroll Based Journal (PBJ)–census data reporting for Long Term Care and Nursing Home facilities
Most of the laws that affect employee wages and work hours are found in the FLSA.
Who enforces federal wage and hour laws?
The Department of Labor, Wage and Hour division enforces most of the regulations in the FLSA. The EEOC enforces many laws that apply to employment, including anti-discrimination laws. In addition, the Internal Revenue Service (IRS) enforces some FLSA laws that involve employee wages and payroll taxes.
State wage and hour laws
Some states have laws that differ from the FLSA. It’s important for employers to remember, however, that they must follow both the state and federal law. If the regulations conflict, the employer must follow the higher standard. In other words, the laws that gives the greatest benefit to the employee. For example, if the state has a minimum wage higher than the federal one, the employer must comply with the state minimum wage. For information about laws in your state, contact your state Department of Labor. You can find your state’s DOL contact information here: State Labor Offices.
State employee scheduling laws
Some states and local jurisdictions have laws that regulate employee shift scheduling. Employee scheduling laws are known by several different names including fair workweek, secure scheduling, predictive scheduling and advance scheduling. Predictive employee scheduling regulations aim to improve scheduling practices for part-time and shift workers.
If I only have a few employees, am I subject to wage and hour laws?
The regulatory burden increases as your workforce grows. All employers are subject to the Fair Labor Standards Act (FLSA). When you hire your 11th employee, you are subject to the Occupational Safety and Health Act (OSHA). At 15+ employees, the Americans with Disabilities Act (ADA) kicks in. When your staff hits 51, the Affordable Care Act (ACA) applies.
How can I comply with wage and hour laws?
- Know current federal and state laws—many have changed recently
- Update your company policies and employee handbook with legal guidance
- Train managers, HR, executives, and employees
- Ensure your corporate culture supports a safe, legal, and welcoming environment
What is the best work tech for wage and hour compliance?
A Human Resources Management System (HRMS) helps businesses comply with wage and hour laws. An HRMS:
- Tracks work time accurately for payroll
- Enforces meals and breaks
- Manages employee classification (exempt vs. non-exempt)
- Supports compliant work schedules
- Sends overtime alerts
- Helps prevent child labor violations
- Automates recordkeeping
- Is configurable for union and industry regulations
- Tracks tips, job classifications, and employee certifications
Minimum wage laws sets the lowest hourly rate an employer can pay an employee who is covered by the law. The current federal minimum wage is $7.25 per hour. It was enacted July 24, 2009. 29 states and the District of Columbia have a minimum wage law that is different than the federal level. 32 cities and counties raised their minimum wages in 2021. Some of the increases to their minimum wage laws were due to scheduled increases. Others were raised due to cost-of-living mechanisms built into minimum wage laws. Most cost-of-living adjustments are based on the Consumer Price Index (CPI).
Overtime laws regulate overtime. Employee overtime is defined by the federal government as hours worked beyond 40 in a workweek. State and local laws may also set rules for overtime. Overtime increases business costs by imposing a multiplier on the pay rate for non-exempt workers. The most effective way to control employee overtime is through a combination of policy, employee scheduling, and timekeeping work tech that together avoid scheduled overtime and unplanned overtime through clock enforcement.
Paid and Unpaid Leave
Review paid leave benefits in light of FMLA and state regulations. Ensure HRMS settings support compliance. Check timesheet/scheduling recordkeeping.
Predictive Scheduling/Fair Workweek
State laws that govern employee scheduling vary. When crafting your policy, address the following:
- Good faith estimate of employee schedules
- Post schedules at least 2 weeks in advance
- Employee schedule preferences
- Restrictions on filling vacant shifts
- Advance notice of schedule changes
- Predictability pay
- Rest periods and clopenings
- Time and attendance recordkeeping
No Federal law yet. If you are currently asking about salary history during interviews, this could be illegal in your state. Check with your state Department of Labor.
- Fair Labors Standards Act (FLSA)
- Family and Medical Leave Act (FMLA)
- Americans with Disabilities Act (ADA)
- Why LMS Compliance Training is an Onboarding Must-Have, Swipeclock
- How to Improve Your Onboarding Process (COVID & Remote Work Issues for 2021), Swipeclock
- Your Independent Contractors Are Probably Employees: Compliance 2020, Swipeclock
- How to Write and Update Your Employee Handbook for 2021, Swipeclock
- Employers: Don’t Make These Top 13 FMLA Mistakes in 2020, Swipeclock
- Time and Attendance: Timekeeping, Policies, Software, Compliance, Templates, Swipeclock
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