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Are You an Employer? - Be Sure to Follow the Rules

General Business News

October, 2009

Are You an Employer? - Be Sure to Follow the Rules

Do you remember your first job?  Perhaps you worked at a grocery store. Or maybe a fast food establishment. Whatever the case, you probably thought the boss had it easy; he or she made you do the really hard work.

Do you still have the same view of the boss now that you are the boss? Chances are that with age and responsibility, you have tempered that view a bit. As a business owner, you know the hours you put in far exceed those of your employees. But did you know that what makes your job tougher is not only the hours you put in and the responsibilities you shoulder, but also the myriad employment laws you must follow. The larger your business grows, the greater your obligations will be.

As with everything governmental, employment law compliance can be daunting. This article is meant to give you an idea of what you face as an employer. It is not meant to be comprehensive, as you do not have time to read several thousand pages of material. But hopefully, it will help you decide when to seek professional legal advice.

The United States Department of LaborÂ’s (DOL) Employment Laws Assistance website lists 26 major laws administered by the DOL. Each of these laws is linked to a webpage that lists resources designed to help employers comply. Though it is unlikely that many of these laws will affect you, the sheer volume of information does give you an idea of what you face. Some of the more significant laws are discussed in the following paragraphs.

Fair Labor Standards Act
The Fair Labor Standards Act is the federal law that regulates minimum wage, overtime pay, record keeping and child labor standards for nearly all types of employment. It is generally applicable to all employers with revenues exceeding $500,000 and two or more employees. The FLSA also covers employees engaged in interstate commerce, production of goods for commerce, closely related processes or occupations essential to production of goods for commerce or domestic service. In short, almost every U.S. employee is covered under this act.

Employee Retirement Income Security Act of 1974
The Employee Retirement Income Security Act is the nationÂ’s primary vehicle for regulating how employers establish and administer retirement and other employee benefit plans. The law does not require employers to offer retirement plans; however, once those plans are established it regulates their activities. ERISA also guarantees the payment of benefits under some plans through the Pension Benefit Guarantee Corporation.

Consumer Credit Protection Act
If you have ever received a notice of garnishment from the court, you know what a hassle it can be to comply with such a notice. The Consumer Credit Protection Act protects employees from discharge by their employers because their wages have been garnished. It also limits the amount of earnings that can be garnished in any one week.

Family and Medical Leave Act
This is perhaps one of the laws most quoted by employees. It is also one of the most misunderstood laws. The Family and Medical Leave Act provides an entitlement of up to 12 weeks of job-protected, unpaid leave during any 12-month period to eligible, covered employees for certain reasons. Applicable to employers with at least 50 employees, the FMLA does not require employers to provide paid leave. The act's provisions are complex.

In addition to the many acts administered by the Department of Labor, other federal laws affect the workplace.

  • EEOC: Equal Employment Opportunity Laws are administered by the U.S. Equal Employment Opportunity Commission and generally prohibit discrimination based on age, disability, race, sex, religion or national origin.
  • ADA: The Americans with Disabilities Act is primarily administered by the U.S. Department of Justice, which protects persons with disabilities.
  • OSHA: These workplace safety regulations are administered by the Occupational Safety and Health Administration.

As an employer, you are responsible to make certain you comply with various employment laws. You are also required to follow laws related to employment taxes, including Social Security, Medicare and unemployment insurance.

This article is general in nature. If you are an employer and question what your responsibilities are under various federal laws, give us a call. While we are not lawyers, we can assist you with general questions and point you in the direction of attorneys who are versed in employment law.


These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact their CPA regarding the topics in these articles.

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