All business owners need to understand the labor laws governing how workers must be treated. Here are some of the most important laws to know and observe.

5 Labor Laws All Business Owners Should Know About

Owning and operating a business is no easy undertaking. Whether you’re ironing out kinks in the supply chain, hammering out sales agreements, managing the payroll, or integrating a new biometric time and attendance system with your existing network, you’ve probably got your hands full.

If you’re lucky, you have the ability to hire educated and experienced professionals to handle some of the details for you and reduce your burden. Once you get a staff on board, however, you will gain additional responsibilities that go far beyond workforce forecasting and stocking the break room with bagels and coffee.

All business owners need to understand the labor laws that govern how workers must be treated. If you want to avoid legal battles, it’s essential to know which laws apply to your business so that you can follow them to the letter.

Although there is a plethora of laws that likely apply, there are a few you should be aware of before you hire your first employee. Here are some of the most important labor laws to understand and observe.

1. Equal Pay Act of 1963

In case you haven’t heard, it’s illegal to pay women less for doing the same job as men. This was established in 1963 with the passage of the Equal Pay Act. So why are women still reportedly earning 79 cents on average for every dollar a man earns in the same position?

There are a number of factors at play in the ongoing gender pay gap. First, most employees are discouraged from discussing their salary with coworkers, so many workers don’t realize the disparity. In addition, it’s not always easy to prove that women and men are doing the same job.

Employers may claim that although titles are the same or similar, there are variables that allow for differing pay, such as variances in job description, actual duties, and factors like education and experience that can tip the pay scale. Even worse, most female employees tend to undervalue their contributions, asking for (or accepting) lower pay and fewer raises and promotions than men.

Of course, these are all moot points since it’s up to employers to engage in appropriate workforce management to ensure that there is no discrimination when it comes to paying men and women equally for doing the same job under the Equal Pay Act.

2. Title VII of the Civil Rights Act of 1964

The passage of the Civil Rights Act was a watershed moment in U.S. history, one that legally established every citizen as being equal and having equal rights. For employers, this means very real consequences for any type of workplace discrimination, including hiring, firing, and payment practices.

Title VII of the Civil Rights Act expressly prohibits discrimination by employers based on “race, color, religion, sex, or national origin”. Other laws were subsequently established to protect individuals against discrimination based on age (the Age Discrimination in Employment Act of 1967), disability (the Americans with Disabilities Act of 1990), and other factors.

Employers are required by these laws to treat all employees and potential employees equally during the hiring process, while they are in the company’s employ, and throughout the exit process (firing, layoffs, etc.).

3. Family Medical Leave Act

If you own and operate a private-sector company with 50 or more employees, you are required to grant qualifying employees up to 12 weeks of medical leave during a 12-month period. However, it’s important to understand coverage and eligibility requirements.

This law does not provide carte blanche for an employee to take extended leave. Although employers cannot interfere with, prevent, or deny an employee taking qualifying leave, you do have the right to require employees to fill out request forms and submit appropriate medical documentation to prove that requested leave qualifies under the Family Medical Leave Act.

4. Fair Labor Standards Act

This act set standards for a variety of labor-related issues, including minimum wage, overtime pay, and classifications for part-time and full-time employees, as well as contractors, among other things. Understanding the FLSA guidelines for employers will help to ensure that you remain in compliance and compensate your employees properly for their efforts.

5. State Laws

Don’t forget, in addition to federal labor laws, many states enact additional laws for the protection of workers. This could mean paying higher minimum wage than other states or adding
biometric time attendance systems to ensure that employees are taking appropriate breaks throughout the work day. So long as you do your part to comply with all federal and state labor laws, then you should be able to avoid legal issues and keep employees happy.

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