There is often a temptation for small and mid-sized family-owned businesses to disregard employment laws, particularly when considering a family member’s employment, but those laws generally do not have an exemption for family members. A business’ relaxed approach with respect to family members can also easily spill over to non-family member employees. All of this is to say that it is essential that every family business owner be familiar with federal, state, and local employment laws.
Below is a summary of a few important federal employment laws to keep in mind. If you or your HR team do not have a handle on these, it is time to brush up – be sure to reach out to your employment or benefits counsel for additional information as needed. And be sure to know about state and local employment laws, too, as they can impact the business as much as federal laws.
Wages and Hours
The Fair Labor Standards Act (FLSA) regulates wages and overtime pay. The FLSA requires business owners to pay employees (who are not otherwise exempt) at least the minimum federal wage and one and a half times the regular pay rate for any overtime hours (defined as more than 40 hours in a week. Additionally, many states and local jurisdictions have additional laws that require a higher minimum wage and may require that non-exempt employees be paid overtime if they work more than a certain number of hours in one day.
Workplace Safety and Health
The Occupational Safety and Health Act (OSHA) regulates safety and health conditions. In addition to compliance with the safety and health standards set forth by OSHA, employers also have the duty to maintain a workplace free of any recognized serious hazards. Enforcement of the OSHA is administered through workplace inspections and investigations.
Employee Benefit Plans
The Employee Retirement Income Security Act (ERISA) regulates employee pension and welfare benefit plans and preempts many related state laws. ERISA contains various provisions intended to protect the rights of plan participants and beneficiaries, including fiduciary, disclosure, and reporting requirements.
Family and Medical Leave
The Family and Medical Leave Act (FMLA) requires that employers with 50 or more employees within a 75-mile radius give up to 12 weeks of unpaid leave to all eligible employees who for their own serious health condition, caring for certain family members with a serious health condition, or for bonding with a baby.