In the New Year, it’s important for small business to consider the current and new employment laws that are taking effect. As an employer, do you realize how many employment laws affect your business if you have one or more employees? In this first installment of a blog series regarding employment laws that affect businesses both large and small, we will begin by covering the laws that affect all businesses with one or more employees. Next week, we’ll tackle businesses with 11 or more employees.
Fair Labor Standards Act (FLSA)
In essence, this law requires you to pay overtime for non-exempt employees, and it affects most employers in the United States, even small businesses. To be exempt from overtime, three conditions must be met:
The salary is more than $455 a week or $23600 annually
Consistency in pay is either salaried or an employee’s hourly schedule is without change
The types of job duties performed: the employee must be either a manager, an administrative professional with independent judgement, or a professional that requires advanced education.
Common issues that many employers face are letting part-timers log full-time hours, not calculating overtime, and mis-classifying employees. For example, employees making $100,000 or more are always exempt, even if they are paid hourly.
If you do not comply with FLSA, the result is that employees don’t receive overtime compensation or scheduled breaks when they should.
Immigration Reform and Control Act (IRCA)
According to this law, employers may only hire lawfully eligible workers and must maintain up-to-date I-9 forms for all employees. Should an employer not collect and verify appropriate documentation for the I-9 form within the first three days of employment, they are required to terminate the employee.
In order to comply, you must collect I-9 forms within three days of on-boarding employees and keep them separate from any other personnel files (password protected if electronic and under lock if on paper). You must make copies of these documents and attach them to the new version of the I-9 through August 31, 2019.
Equal Pay Act (EPA) – governed by the Equal Employment Opportunity Commission
This requires that all employers pay male and female employees the same wage for the same work. A recent key amendment to this law includes the Lilly Ledbetter Pay Act, which ensures more monetary gain for employees when payment violations occur.
National Labor Relations Act (NLRA) – Governed by the National Labor Relations Board
This law stipulates that an employer cannot prohibit employees from joining or forming a union and cannot prohibit non-exempt employees from discussing their wages with one another. There are monetary penalties for noncompliance with this act.
Employee Polygraph Protection Act (EPPA) – Governed by the U.S. Department of Labor
Under no circumstance may an employer employ the use of lie detector tests or polygraphs during pre-employment screening or during employment, with a few exceptions for government contractors.
Consumer Credit Protection Agency (CCPA) – Governed by the U.S. Department of Labor
This requires employers to follow employee wage garnishment requirements and to protect employee consumer privacy information, such as social security numbers.
Specific to Colorado as of September 2018 is the Protections For Consumer Data Privacy law, which is outlined below.
During the course of your employment, the Company will collect certain information that is classified as “personal identifying information,” or PII, under applicable laws. Such information may include, but is not limited to:
Your first and last name or initials;
Username(s) and password(s);
Social security number;
Driver license or other identification card number;
Medical documentation;
Biometric data;
And more.
The Company may keep these records in paper and/or electronic format.
When such documentation is no longer needed, pursuant to records retention requirements and best practices, the Company will either (a) destroy the records or (b) arrange for their destruction, e.g. by shredding, erasing, or otherwise modifying the personal identifying information in such a manner as to render it unreadable or indecipherable through any means.
It’s completely normal to feel overwhelmed by the volume of laws that you face as an employer. There is quite a lot that you have to comply with! Though this list is not all-inclusive of every employment law that you are expected to be in compliance with, it is an excellent place to start in the New Year. HRx is here to provide support through not only these blogs but also through individual consulting. If you are curious to learn more or to check if your business is in violation of any of the aforementioned laws or would simply like an audit, please contact us with questions!