For any business owner or manager, one of the most complex and important tasks to get right is labor law compliance. And if you run businesses in multiple locations, you know that laws differ based on the area – which makes regulations even more complicated to follow.

There’s a laundry list of laws for businesses to keep track of and manage at the federal, state, and city levels. Not to mention new and emerging labor laws are being enforced more frequently. For example, the U.S. Department of Labor (DOL) recently announced a new overtime rule that will affect millions of workers.

With so much to keep track of, we’ve compiled a list of labor laws that every business needs to know. Keep reading to unpack what to expect from each law and what you need to follow to stay compliant.

Minimum wage

Every year, businesses need to monitor which states, cities, and industries have updated minimum wage requirements. For example, California recently raised its general minimum wage to $16 per hour, $20 per hour for fast-food restaurant workers, and $18-$23 for certain healthcare facilities workers.

The U.S. federal minimum wage for covered nonexempt employees is $7.25 per hour. According to the U.S. Department of Labor (DOL), many states also have minimum wage laws. In certain circumstances, an employee is subject to both the state and federal minimum wage and will be entitled to the higher one between the two wages.

The Fair Labor Standards Act (FLSA) doesn’t provide wage payment collection procedures for an employee’s usual or promised wages in excess of those required by FLSA. However, most states have laws that dictate how, where and when claims for such wages should be filed. Want to learn more about minimum wage laws in the area you work in? Here is a breakdown of wage amounts per state.

Overtime rules

Overtime is by far one of the most common rules we get questions about. Here are the main notables to take away. Most nonexempt employees are covered by the Fair Labor Standards Act (FLSA) which states that they must receive overtime pay for hours worked over 40 within a workweek. This pay must be at a rate that’s not less than time and a half of their regular pay rate.

According to the U.S. Department of Labor (DOL), the FLSA does not limit the number of hours employees aged 16 and older may work within a workweek. The FLSA also doesn’t generally require overtime pay for work on weekends, holidays, or regular days of rest unless overtime is worked on those days.

Many states have different overtime pay requirements that are more beneficial to employees. As always, employers should familiarize themselves with all applicable laws and where more than one law could apply, they must comply with the one that is most beneficial to the employee.

Lastly, the DOL announced a final rule in April 2024 that changes the overtime exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees. The new rule took effect on July 1, 2024. Be sure to look into the details of the final rule here.

Meal and rest breaks

Breaks can be tricky depending on where you’re running your business and what sector you work in — since meal and rest break compliance requirements differ by state and industry. Many states have strict rules for scheduling and recording breaks. For example, states like California require premium pay for missed breaks and high penalties for breaches.

According to the U.S. Department of Labor, meal periods generally serve a different purpose than coffee or snack breaks. They are not considered work time and are not compensable.

Some states require meal breaks to be scheduled at specific times within the shifts, and certain states also don’t require employers to provide them.

The FLSA does not require lunch or coffee breaks. However, it does consider breaks as compensable work hours when employers offer short breaks, typically lasting 5-20 minutes. Certain states don’t require employers to provide a rest break, and it is up to the discretion of the employer to decide.

Family and Medical Leave Act (FMLA) rules

According to the U.S. Department of Labor, the Family and Medical Leave Act (FMLA) was created to help employees balance their responsibilities between work and home by allowing them to take “reasonable unpaid leave” for certain family and medical reasons.

The Act provides eligible employees with up to 12 weeks of unpaid leave per year and protects their jobs while on leave. The FMLA guidelines for employers also require that group health benefits be maintained while an employee is on leave.

Where do these regulations apply? FMLA rules for employers apply to all public agencies, schools, and private sector companies with 50 or more employees. Employees are eligible for leave if they meet all of the following requirements:

They work for a covered employer,
They have worked for the employer for at least 12 months as of the date the FMLA leave is to start,
They have at least 1,250 hours of service for the employer during the 12-month period immediately before the date the FMLA leave is to start (a different hours of service requirement applies to airline flight crew employees), and
They work at a location where the employer employs at least 50 employees within 75 miles of that worksite as of the date when the employee gives notice of the need for leave.

FMLA leave may be used for the following reasons:

The birth of a child and to bond with the newborn child within one year of birth,
The placement with the employee of a child for adoption or foster care and to bond with the newly placed child within one year of placement,
A serious health condition that makes the employee unable to perform the functions of his or her job, including incapacity due to pregnancy and for prenatal medical care,
To care for the employee’s spouse, son, daughter, or parent who has a serious health condition, including incapacity due to pregnancy and for prenatal medical care, and
Any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a military member on covered active duty or call to covered active duty status.

In addition, eligible employees may take up to 26 workweeks of FMLA leave per year to care for a covered servicemember with a serious injury or illness if the employee is the spouse, son, daughter, parent, or next of kin of the servicemember (referred to as military caregiver leave).

Fair Workweek laws

You may have heard of fair workweek laws, also known as Predictive Scheduling or Secure Scheduling laws. These regulations aim to make employee scheduling more stable, fair, and transparent. Predictable schedules help workers, especially part-time retail, fast food, and restaurant workers, meet their needs outside of work, such as attending school or arranging childcare.

States like New York require advance notice of schedules and premium pay for late changes. Most recently, the Los Angeles County Board of Supervisors voted to require retail businesses to provide their employees with various protections related to their work schedules and working hours county-wide.

Fair workweek laws differ by city and sector, but they can include the requirements below. Be sure to check the specific ordinance that applies in your area and industry.

A good faith estimate of regular work hours, days, and locations,
Advance notice of work schedules – in most cases, up to 14 days’ notice before the first day on the work schedule,
Consent and predictability pay for schedule changes,
A chance to say no to extra work or clopenings,
Adequate rest between shifts, and
Access to available hours before the business hires new staff.

For certain Fair Workweek laws, when an employer reduces an employee’s scheduled work time by at least 15 minutes, they are required to compensate the employee for the time not worked, which is typically one-half of the employee’s regular pay.

State premium pay requirements

Some states require premium pay for certain hours in addition to the minimum wage and overtime pay requirements discussed above. Premium pay rules vary from state to state. For example, California requires employers to pay premium pay for hours worked on the 7th consecutive workday. Some states require premium pay when an employee works a split shift, and New York requires some employees to be paid premium pay for working a “spread of hours” of more than 10 hours in a day (inclusive of rest and meal breaks).

Leave laws

Leave management can be complicated. Certain types of leave are required by law such as paid sick leave, or FMLA leave (discussed above), but others are dependent on the employer’s policies, such as vacation leave or celebration days. Depending on the rules that apply to your business, your employees may be entitled to many different types of leave.

Some of the main types of leave benefits in the United States include Family and Medical Leave (FMLA), paid sick leave, vacation leave, paid time off (PTO), parental leave, bereavement leave, voting leave, and jury or witness leave.

Occupational Safety and Health Act (OSHA)

According to the federal OSHA regulations, every employee has the right to a safe and healthy workplace. Employers are responsible for providing a safe workplace that complies with the rules and regulations under the OSH Act and meets OSHA standards.

By following the standards, employers can ensure their employees have safe and healthy working conditions. If an employer needs assistance, OSHA provides training, outreach, education, and help for employers who need it.

Employees have the right to speak up if they feel any hazards or standards are not being met – without the fear of retaliation. For example, they have the right to refuse to work when they feel they could be exposed to a hazard.

How Businesses Can Simplify Compliance

With so much to keep track of and follow regarding labor law compliance, it can be easy to miss important details and break regulations within the law. That’s why it pays to invest in smart labor law compliance software.

It can help you streamline compliance with federal, state, local, and emerging laws. Software with smart tools and guardrails makes it simpler for owners and managers to meet obligations and reduce their chances of financial penalties.

For example, it can help you schedule the right meal breaks, flag missed rest breaks, record attestations, auto-calculate premium pay and overtime, and alert you when breaks are missed. Doesn’t that sound like a load off your plate?

Let labor law compliance be one less thing you have to stress about. Ready to gain peace of mind? Book a free demo here in just a few easy steps.

Disclaimer: The information provided in this publication is for general informational purposes only. Deputy makes no representations or warranties of any kind, express or implied, with respect to the software or the information contained in this publication. While, Deputy’s software is designed to simplify shift work by assisting with hiring, onboarding, scheduling, time and attendance tracking, payroll integration, and wage and hour compliance, it is not a substitute for payroll or legal advice, nor is it intended to relieve you of your obligation to comply with the legal requirements applicable to your business. It is ultimately your responsibility to ensure that your use of Deputy complies with all applicable laws and regulations. Please review our Product Specific Terms for more information about your compliance responsibilities.

The Labor Laws Every U.S. Business Needs to Know