Comprehensive Guide to US Employment Laws

The United States Employment Laws encompass relatively lesser rules and regulations than other nations. Even though the US Department of Labor decrees over 180 federal laws, these are mostly related to the work hours, wages, and prohibition on discrimination. Apart from this, the parties involved in an employment relationship have the flexibility to undergo negotiations in drafting the terms and conditions of the employment contract. 

The Employment Laws in the US can be Federal, State, and Local. Apart from these, there are case law and agency regulations. The primary federal labor laws are 

• Title VII (of the Civil Rights Act)
• The Age Discrimination in Employment Act
• The Pregnancy Discrimination Act (PDA)
• The Americans with Disabilities Act
• The Fair Labor Standards Act
• The Equal Pay Act, among others. 

Here is a glimpse into the US Employment Law Country Guide. 

All employees or workers in the US are covered and protected against discrimination based on race, sex, religion, color, pregnancy, disability, sexual orientation, national origin, union activity, or retaliation under the US Labor Law. In addition, all employees are protected from certain discrimination under State and Local Laws. 

• Employees are categorized based on an employment contract, the Union Collective Bargaining Agreement, and Employment-at-will. 
• The Wage and Hour Division has separate labor standards of provision for non-immigrants authorized to work in the country under the Immigration and Nationality Act.

An employment contract or employment agreement is a legal document that states the rules, regulations, and detailed circumstances of the relationship between the employer and the employee or a labor union. It includes – 

• Employee’s scope of work
• Pre-employment considerations
• Duration of employment
• Date of commencement of employment
• Probation clause (if any)
• Remuneration package
• Job responsibilities 
• Hours of work & overtime pay
• Working Conditions
• Employee benefits security
• Code of conduct
• Workplace Safety and Health
• Termination & Severance

According to US Employment Laws, the employment contracts need not meet minimum requirements. The employer-employee relationship is on an ‘at will’ basis, meaning any parties may undertake termination without notice or cause. The written Offer of Employment states the terms and conditions of employment. The New York Employment Law requires employers to inform their employees about the remuneration package, payday, overtime rates, and the mode of payment during hiring. 

For executives and highly paid officials, the employment contract is written. It states the cause and code of conduct that would determine termination or severance of pay for termination without cause.

Employees in the US are protected by several worker protection laws, which encompass minimum pay requirements to benefits regarding maternity leave in the US for foreigners, parental leaves, shared paternity leaves, and paid maternity leave. The US Equal Employment Opportunity Commission also enforces certain other benefits for employees. 

The key federal provisions under the Employment Act are as follows:-

Minimum wage

The Fair Labor Standards Act (FLSA) determines the minimum wage for all workers. According to the act, all employees are entitled to $7.25 per hour. Moreover, a time-and-a-half is to be paid for work done by non-exempt workers. Additionally, the Act also specifies the minimum age for certain high-risk occupations and the number of work hours for children under 16. 

Workplace safety

The Occupational Safety and Health Act of 1970 states some conditions to ensure workplace safety to minimize any workplace accidents and dangers related to the same. Accordingly, many workplace safety laws sync with particular industries like maritime, agricultural, and construction jobs. The ‘General Duty Clause’ states directions that prohibit any organization from implementing practices that bear significant risks for workers. 

Health coverage

All employees engaged in both medium and large-sized business enterprises in the US are entitled to Health Insurance schemes under the Affordable Care Act of 2010. The Employer Shared Responsibility Payment provision states that organizations employing 50 or more employees working full time should offer a minimum amount of health insurance or pay the penalty. Employees are entitled to enjoy the health insurance benefit if they qualify as ‘full-time’ employees by working for a minimum of 30 hours a week. 

Social security

In the US, disabled and retired Americans are entitled to a financial safety net amount under the Social Security Act of 1935, which had become law under President Roosevelt. As per July 2021 stats, about 55.6 million US people get their Social Security checks each month. 

The average amount for retirees was $1,543 and $1,277 for disabled citizens. Under the scheme, each party – employers and employees – contribute an amount worth 6.2% of the employee’s earnings, up to a maximum amount calculated annually. At the same time, self-employed individuals bear the entire amount, that is, 12.4% of their earnings towards the same. However, half of this payment is deductible under the tax laws. 

Unemployment benefits

• Every state in the US possesses an unemployment insurance agency. However, benefits for jobless individuals are offered by a joint federal-state program. Payments made to unemployed individuals are managed by states required to meet certain federal guidelines. 
• To be eligible for such jobless payment benefits, individuals must prove their joblessness due to reasons they don’t control (for example, layoffs or termination) while also fulfilling certain conditions specified under the state laws. Jobless individuals can receive payments under this scheme for up to 26 weeks which might be extended during economic crises.
• The payments are enough to sustain individuals for at least a few months. 
• Pay 

Whistle-blower protections

Whistle-blower protections refer to the regulations that govern cases wherein employees report their employers for any violation of conduct or law. Often, such whistle-blower protections get merged into other types of legislative laws, such as the Consumer Product Safety Improvement Act and the Clean Air Act safeguards. While the former protects consumer rights, the latter looks into environmental violations. 

Suppose workers are scared of a job loss or any other penalty after they voice their opinions against their employees. In that case, they can register their complaint with the OSHA office within 30 days of the incident. The latest update during the Covid-19 pandemic under the Whistle-blower Program is that workers can file a complaint if they feel their workplaces are unsafe and not following safety protocols.

Family leave

In 1993, the Labor Code USA sanctioned the Family and Medical Leave Act into law, signed by President Bill Clinton. Under this act, eligible employees can take 12 weeks of unpaid leave for childbirth or adoption every year. Plus, the labor act rules in the US also allow workers to avail of leaves for critical personal illness or that of any family member. 

To be eligible for the Family and Medical Leave Act benefits, employees must have worked with the organization for at least one year, covering 1250 work hours in the previous year. Also, the policy is applicable for organizations with at least 50 employees working within a 75-mile radius. 

Employment-based discrimination

Title VII of the Civil Rights Act of 1964 made it illegal for businesses in the US to discriminate against employees based on “race, color, religion, sex, or national origin.” Furthermore, the Lilly Ledbetter Fair Pay Act of 2009 created a more strengthened cause against wage discrimination toward women and minorities.

Certain penalties are imposed in case of violation of employment laws under the Department of Labor (DOL) and the Occupational Health and Safety Administration (OSHA).

For violating posting requirements for the Family and Medical Leave Act, the charges are $166 for every individual offense. Again, $1,925 is charged for willful or repeated violations of the Fair Labor Standards Act (FLSA) minimum wage and overtime rules. The charge for not proffering adequate summary benefits and coverage of ERISA to affected employees now stands at $1,105.

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The US employment law termination states that employees hired at will can be terminated with or without notice or cause. But, of course, that excludes termination based on illegal procedures such as discrimination as provided under the discrimination act or whistle-blower protections. 

The “just cause termination” clause is put forth for executives or highly-skilled officials who are given the mandate that they may be terminated under enlisted specific permissible grounds.

To comply with the Federal Laws and employment laws in the US, employers need to keep themselves updated about the various laws as put forth by HR. Undertaking repeated manager training to be abreast with the nitty-gritty of the US labor law, labor regulations in the US, and HR policies can help employers be in sync with the legal employment issues. 

With the overwhelming number of laws in place for the US labor law, it is worthwhile to hire an HR manager who will ensure that all the policies are in place and followed from time to time. To protect both the organization and the employee, one of the many best practices is establishing standard contracts, employment contracts, and offer letters. Employment contracts should also be reviewed and amended (if necessary) periodically to verify that the terms and conditions related to employment relationships are compliant.

It is wise to outsource the hiring and compliance chores to a reliable and reputable partner to relieve yourself of the stress. Your employees can also be relieved of preparing labor documents and conducting frequent compliance audits. You can outsource all aspects of employment to a corporate services provider to ensure full compliance and avoid penalties. 

If you partner with Multiplier, you can be assured of our HR professionals implementing the best practices when recruiting personnel in the US. At the same time, you focus on your business without worrying about compliance issues.