Introduction
Overview

Which Laws Your Company Must Follow....................................... 3

Which Federal Laws Apply.......................................................... 4

Which State and Local Laws Apply........................................... 14

Putting It All Together................................................................ 15

Basic Compliance Tools................................................................ 16

Lawyers..................................................................................... 16

Training...................................................................................... 17

Policies....................................................................................... 18

Responding to Legal Violations.................................................. 19

Outsourcing............................................................................... 20

Documentation.......................................................................... 21

If You Need More Information....................................................... 22

Government Agencies............................................................... 22

SHRM and Nolo Resources...................................................... 22

Most managers and human resources professionals—particularly those who work for larger companies—have to deal with federal employment laws every day. These laws reach into nearly every stage of the employment relationship, from hiring and first-day paperwork, to providing benefits and time off, to termination and layoffs. Whether you are developing workplace policies, creating forms and notices for your company to use with employees, or handling employee performance and discipline issues, you have to understand your company’s legal obligations—and make sure that you don’t inadvertently violate the law.

It can be tough to find out exactly what these federal laws require. That’s where this book comes in. It explains all of the major federal employment laws: whom they protect, who has to follow them, what they require, and what they prohibit. Each chapter covers a single federal employment law, including the obligations employers have under each law, deadlines, posting requirements, and record-keeping rules. If you need more information, each chapter includes a list of resources. And many of the chapters include charts that provide information on state laws.

Health Care Reform: Still a Work in Progress

Although the Patient Protection and Affordable Care Act (known in various circles as the PPACA, the ACA, Obamacare, or simply health care reform) passed in 2010, it has taken a long and winding road toward implementation. Contrary to what many commentators expected, the Supreme Court upheld the law’s individual mandate in the summer of 2012. Just a few months later, however, the Court reopened a case challenging the law’s employer mandate and requirement for contraceptive coverage, asking a federal Court of Appeals to decide these issues (which lays the groundwork for further Supreme Court review).

Agencies are still drafting and finalizing the regulations implementing the law, states are still deciding whether and how they will participate, and courts are busy hearing challenges and defenses to the law. Given this state of flux, it’s just too early to spell out the precise contours of the law’s employer requirements, prohibitions, exceptions, and so on, as we have for the laws in this book. We will post updates and information on the employer provisions of the PPACA at this book’s online companion page; see the end of this chapter for more information.

This first chapter gives you the information you need to get the most out of this book. First, we explain how to figure out which laws your company has to follow, including which federal laws apply to your company and when and how state and local laws might come into play. Next, we cover a handful of practical strategies that will help your company comply with these laws, such as consulting with a lawyer, documentation, and training. Finally, we explain what to do if you need more help.

What This Book Doesn’t Cover

Some employment situations are not covered in this book. If you fall into one of the following categories, the information you need is likely beyond the scope of this book:

Government employers. Although we explain which (if any) federal, state, and local government workers are covered by each law, we don’t detail the special rules that may apply to government employees. For example, although federal government workers are protected from certain types of discrimination by Title VII (see Chapter 18), they have to follow a special complaint process that doesn’t apply to private companies. We don’t cover that process here.

Federal contractors. Private employers who contract to do work for the federal government are subject to additional employment laws. We don’t cover those laws here.

Which Laws Your Company Must Follow

Employment law comes from many sources. Each of the federal laws (also called “statutes”) covered in this book has been interpreted and refined by court decisions and sometimes by regulations issued by the federal agency responsible for enforcing and administering the law. Many of the topics these laws cover are also addressed by state, and sometimes even local, laws. If more than one law applies, employers generally have to follow whichever law—federal, state, or local—is more beneficial to employees.

You can use this book to figure out which federal laws apply to your company, whether those laws protect particular employees, and whether the situation you’re facing is addressed by a federal employment law. “Which Federal Laws Apply,” below, will help you get to this information quickly.

This book also provides some information on state laws, in the form of charts briefly describing the laws of the 50 states and the District of Columbia, at the end of some chapters. However, you may have to do some research on your own—or talk to a lawyer—to find out whether a state or local law applies to your situation. This is covered in “Which State and Local Laws Apply,” below.

Which Federal Laws Apply

Federal employment law consists of the statutes themselves, any regulations issued by the federal agency responsible for administering the law, and court decisions interpreting the law and regulations. Together, these sources determine what the terms in the law mean, what employers have to do to comply with the law, and how violations of the law will be handled. Each chapter of this book covers a federal employment statute, any regulations interpreting it, and the major court cases decided under the law.

Because the employment laws explained here are federal statutes, they apply throughout the country, regardless of what state the company or worker is in. This means that every federal law in this book has the potential to apply to your company if it operates in the United States. We say “potential” because no law described here applies to every employer and employee, in every situation. Instead, most laws specify which employers need to follow them, which employees are protected by them, and which specific actions they prohibit and require.

To figure out whether a particular federal employment law applies to your company and your situation, you’ll need to answer these five questions:

Does your company have enough employees?

Is your company otherwise covered by the law?

Is the employee covered by the law?

Do all of the law’s provisions apply?

Is this situation covered by the law?

Different Rules for Unions

If your company is unionized, the first place to look for answers to your employment questions is not the law, but the collective bargaining agreement (CBA) between the union and the company. If the CBA gives workers more rights in certain areas (most commonly, wage and hour issues, time off, discipline, and termination procedures), it supersedes the law.

For example, let’s say you want to know how much time an employee can take off for childbirth and parental leave. You look up the Family and Medical Leave Act in this book and see that it requires covered employers to provide up to 12 weeks of unpaid leave. Your company’s CBA, however, gives employees up to 16 weeks of paid leave. Even though the CBA is more generous than the law, you must follow its provisions.

Generally, unions are not allowed to bargain away their members’ federal rights in a collective bargaining agreement. Therefore, a CBA typically does not provide workers less than what the federal law requires. However, there are some exceptions to this rule. For example, most courts have upheld a common CBA provision that requires workers to make certain workplace claims only through the union grievance procedure, rather than bringing them to court (which they would otherwise have the right to do). And some laws allow unions and management to bend the rules in a CBA; for example, although some state laws require employers to give workers specified meal and rest breaks, these laws may not apply to a workplace governed by a CBA.

Does Your Company Have Enough Employees?

Many employment laws apply only to employers that have at least a minimum number of employees. You’ll find these rules under the heading “Regulated Employers” in each chapter. For example, an employer with only 20 employees is not covered by the Family and Medical Leave Act (FMLA); only employers with at least 50 employees must comply with that law.

Is Your Company Otherwise Covered?

Some employment laws don’t impose a minimum size requirement, but instead apply only to companies that engage in “interstate commerce” (and, in a few cases, meet a minimum volume of business requirement). These rules are included in the chart, “Laws That Apply by Size or Operations of Employer,” above.

All but the smallest local companies are engaged in interstate commerce within the meaning of these laws. For example, if your company buys, sells, or handles materials or products that have come from or will go to another state, or if your company’s employees communicate across state lines as part of their job duties, your company is most likely engaged in interstate commerce.

For decades, the U.S. Supreme Court has defined “interstate commerce” very broadly, to encompass virtually any activity that does—or could—exceed a state’s borders. This expansive definition allows the Court to uphold Congressional legislation: The Constitution gives Congress the right to regulate interstate commerce, so Congress has the most extensive possible reach when interstate commerce is defined in broad strokes.

In recent years, however, the Court has been scaling back this definition to occasionally find that Congress has overstepped its bounds. For example, although the Court ultimately upheld the Affordable Care Act (the health care reform law) on other grounds, a majority of the Court found that Congress exceeded its authority to regulate interstate commerce. This recent holding signals that the definition of interstate commerce remains in flux. If, after reading the relevant chapter in this book, you believe that your company is not covered, you should probably check your conclusion with a lawyer.

Even laws that impose a minimum size requirement don’t apply to every employer that is large enough to be covered. Some laws include exceptions for particular types of employers and some apply only to certain types of companies. For example, the Sarbanes-Oxley Act of 2002 applies only to companies that are publicly traded or required to register with the Securities and Exchange Commission. You’ll find this information under the heading “Regulated Employers” in each chapter.

Is the Employee Covered?

Some employment laws apply only to employees who have worked for the employer for a certain period of time. Some exclude independent contractors, apply only to employees in certain occupations, or apply to people who don’t even work for the employer. For example, the Consolidated Omnibus Budget Reconciliation Act (COBRA) applies not only to employees and former employees, but also to an employee’s spouse and dependents, if they are covered by the employer’s group health insurance plan. Each chapter explains whom the law protects under the heading “Covered Workers.”

Do All of the Provisions Apply?

Some laws have provisions that apply only to certain workers and/or certain employers. For example, the provisions of the Fair Labor Standards Act that require employers to pay overtime and minimum wages don’t apply to certain types of employees, including certain computer specialists, seamen, and criminal investigators. Similarly, only employers that have at least four employees are subject to the antidiscrimination provision of the Immigration Reform and Control Act (IRCA), but all employers—regardless of size—have to comply with IRCA’s verification provision, which requires employers to verify that their employees are legally authorized to work in the United States.

You can find this additional coverage information within the discussion of each provision of the law, under the headings “Regulated Employers” and/or “Covered Workers.”

Is Your Situation Covered?

Each law covers a limited spectrum of employment issues and may not extend to the problem or question you’re facing. We’ve included two charts below to help you figure out which chapters to review. The first, “What Each Law Covers,” gives a very brief summary of the law. The second, “Laws That Apply to Common Employment Situations,” lets you know which aspects of the employment relationship are covered by each law. Once you decide which laws might apply, you’ll need to read the sections called “What’s Prohibited” and “What’s Required” in the chapters covering those laws to find out whether your particular situation is addressed.

For example, if you have a question about discrimination, you’ll see that several laws prohibit discrimination in employment. You’ll also see that these laws prohibit different types of discrimination—for instance, the Civil Rights Act of 1866 prohibits only race discrimination, while the Equal Pay Act prohibits only gender-based wage discrimination. To find out precisely what each law requires and prohibits, turn to the appropriate chapters.

In addition, some laws make exceptions for certain situations in which employers are not required to comply with the law. You can find this information in the “Exceptions” section of each chapter. For example, although the Worker Adjustment and Retraining Notification Act (WARN) generally requires certain employers to give employees advance notice of a layoff, employers don’t have to give notice if the layoff results from a strike or the closing of a temporary facility.

Which State and Local Laws Apply

Even if you follow every applicable federal employment law to the letter, your company could still be violating other legal obligations to its employees. The federal government isn’t alone in regulating the employment relationship—state and local governments often adopt their own employment laws as well. If your company and situation are covered by more than one law, you must follow the law that is the most beneficial to the employee in a particular situation.

This book will help you get started in figuring out which state laws might apply. At the end of many chapters, you’ll find charts summarizing the laws of the 50 states and the District of Columbia on the same topic. For example, at the end of the chapter on the FLSA, you’ll find charts on state minimum wage, overtime, and meal and rest break laws. However, these charts may not provide the details you need. In that case, you should contact your state’s labor or fair employment practices department (you can find contact information in Appendix A), consult a resource on the employment laws of your state, or talk to a local employment lawyer.

To find out whether local laws might come into play, you’ll have to find out what your city or county requires. Some local governments post their laws (often called “ordinances”) or information for local employers on their websites; you can find links to many city and county websites at www.statelocalgov.net. You can also find out what local laws require by talking to a local employment attorney.

State and local laws can be quite similar to federal employment laws: They cover similar topics, apply to only certain employers (often those with a minimum number of employees), and protect only certain types of employees. However, state and local laws very often provide workers with more benefits—and apply to more employers.

Putting It All Together

Here are a couple of examples to illustrate how to figure out which laws your company has to follow.

Example 1: The only manager of a four-employee graphic design company in Berkeley, California, wants to know what the company’s obligations are to applicants with disabilities. The federal Americans with Disabilities Act governs this issue, but it applies only to private employers with at least 15 employees. California also has an antidiscrimination law that prohibits disability discrimination, but it applies only to employers with at least five employees. However, the city of Berkeley prohibits all companies that contract with the city from discriminating on the basis of disability. Therefore, if the company wins a bid to redesign the city’s website, it will have to comply with this municipal law.

Example 2: A national restaurant chain is considering expanding to New Mexico. Its HR director does some research and learns that New Mexico’s minimum wage is $7.50 an hour. Because this is higher than the current federal minimum wage ($7.25 an hour), the chain will have to pay its workers at least the higher state amount. But if the chain decides to open in Santa Fe, it will have to pay workers at least $10.29 an hour, because that city has adopted a living wage law that applies to all employers required to have a business license or registration from the city. Santa Fe doesn’t require employers to pay any straight wages to tipped employees as long as their tips add up to at least the minimum wage, if the employee receives at least $100 in tips for the month. However, both federal and New Mexico law require employers to pay tipped workers a wage of at least $2.13 an hour, in addition to tips. So, the restaurant will have to pay tipped workers in Santa Fe at least the $2.13 an hour required by federal and state law, and their total pay—including tips—will have to add up to at least the city’s minimum wage of $10.29.

As you can see, things can get confusing if your company is covered by two or more laws that impose different requirements or seem to contradict each other. If you find yourself in this position, you may need some help figuring out what to do. This is a good time to consult with an employment lawyer.

Basic Compliance Tools

This book will help you understand which federal employment laws your company must follow and what those laws mean. However, to stay out of legal trouble, your company must do more than simply follow the letter of the law. It will also have to adopt some practical strategies to make sure that it meets its legal obligations. These compliance tools are not strictly “required” by the laws covered in this book, but a company that wants to avoid legal problems should consider them standard operating procedures.

This section briefly explains a handful of basic strategies every company should follow, but it is only an introduction to these important topics. The ins and outs of creating an effective compliance program are well beyond the scope of this book. However, SHRM and Nolo both have plenty of detailed resources that will help you design and implement procedures for compliance; see “If You Need More Information,” below.

Lawyers

Even the most conscientious HR professional occasionally needs help from a lawyer. Although you can handle many employment issues on your own, some are particularly tricky and require some legal expertise. As you read this book, you’ll see that we sometimes advise you to see a lawyer if you need more information on a difficult topic. And with good reason: Although lawyers don’t come cheap, your company can save money by paying a lawyer for advice and information that would be very time-consuming and difficult to research on your own.

There are no hard and fast rules determining when you should consult with a lawyer. You’ll have to decide when it’s time to get some expert help based on a number of factors, including your own comfort level, how important the issue is, how many employees are affected, whether your company is facing significant legal exposure, and your company’s budget. However, a good general rule is to consider consulting a lawyer sooner rather than later in any potentially difficult situation.

You can use a lawyer for a variety of tasks, including:

Document drafting or review. A lawyer can create or troubleshoot documents you use over and over again, such as employment contracts, employee notice forms, waivers, your employee handbook, and other written policies.

Advice on employment decisions. Of course, your company would quickly go out of business if it consulted a lawyer every time an employee was hired or disciplined, but there are times when a lawyer’s advice will be very valuable. If, for example, you are considering firing a worker who is on FMLA leave or has recently complained of sexual harassment, a lawyer can help you make sure that you have adequate legal support for your decision.

Help understanding your legal obligations. As noted above, companies must follow whichever law—federal, state, or local—provides the most benefits for workers. A lawyer can help you untangle these obligations and assist you in figuring out your responsibilities when several laws overlap.

Representation in legal or administrative proceedings. If an employee files a complaint with an administrative agency or a lawsuit, your company should consult with a lawyer right away. Good legal advice at the outset can make the difference between winning and losing the case.

Training

Training is a great way to keep your company’s legal exposure to a minimum—and give your company an opportunity to deal with potential problems early on, before they have a chance to escalate. Training is a vital component of a company’s efforts to combat harassment and discrimination, for example. In this type of training, employees learn about harassment and discrimination and about how to report possible misconduct to the appropriate people. Managers should also be trained to recognize harassment and discrimination and take appropriate action if they learn that harassment or discrimination might be taking place. You can learn more about discrimination and harassment training from the Training Institute of the Equal Employment Opportunity Commission, www.eeotraining.eeoc.gov.

As a legal matter, training can help limit your company’s liability if it faces a harassment lawsuit. Companies that take reasonable care to prevent and correct harassment—through adopting an antiharassment policy, training managers in their responsibilities, investigating complaints effectively, and taking