Employment laws such as wage, employee rights, and nondiscrimination laws, are important to understand during the interviewing and hiring processes. Knowing the laws that govern how you can bring people on to your team allows you to remain compliant and competitive as an employer. If your organization develops a reputation for being fair and law-abiding, attracting and retaining top talent may be easier.
Let’s review eight categories of employment law that can impact your interviewing and hiring processes.
Department of Labor (DOL) Laws
As soon as you begin any recruitment process, you need to be mindful of the critical employment laws that exist through the US Department of Labor (DOL) and your state labor bureaus. To give you the best resources, we have compiled a list of websites that include state law office contacts and other important information.
The DOL administers and enforces more than 180 federal employment laws that govern workplace activities for about 150 million workers and 10 million workplaces.
A list of each state and their labor office contact information to assist with state-specific hiring laws.
Highlights different minimum wage laws from state to state.
Employment/Age Certification issuance practice under state child labor laws.
The Wage and Hour Division (WHD) tracks state legislation on 34 labor-related topics.
Corporate Business Laws
When starting a new business or remaining compliant with an existing business, there are several corporate employment laws you should follow. Be sure to include these items in your new hire paperwork and/or employee handbook.
An at-will employment arrangement refers to both the employee and employer maintaining the freedom to end the employment relationship at any time, with or without advance notice, and for any reason (or no reason). Employment relationships are presumed to be “at-will” in all US states, with the exception of Montana and fast-food industries in the state of New York.
Notations of your at-will employment status should be included in your employee handbook and any employment contracts. This protects both your rights as the employer and the rights of the employee to end the relationship at any time.
Although at-will employment is a standard expectation, there are times when at-will legal status is diminished. If you enter into a signed employment contract with an employee, depending on how the employment contract is constructed, the employer is usually not allowed to simply end the employment without cause or advanced notice.
Depending on the restrictions of the agreement or contract, the employer must adhere to the parameters it has agreed to with the employee. We advise seeking legal counsel when constructing employment contacts with any team member because they tend to be more legally binding and challenging to dispute.
Equal Employment Opportunity Commission (EEOC)
The EEOC is responsible for enforcing federal hiring laws that make it illegal to discriminate against a job applicant or an employee because of their race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability, or genetic information.
It is also illegal to discriminate against a person because they complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.
Most employers with at least 15 employees are covered by EEOC laws (20 employees in age discrimination cases). The laws apply to all types of work situations, including hiring, terminating, promotions, harassment, training, wages, and benefits.
Employee Wage Laws
There are many laws a business must abide by that benefit the employee. These include laws that state how and when employees should be paid. For new hires, these laws should be adhered to from the start of their employment.
Fair Labor Standards Act (FLSA)
There are a number of provisions that the FLSA covers, including minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and federal, state, and local governments.
It is important to think about the type of position you’re recruiting for and whether the position (not the employee in the position) qualifies as exempt or nonexempt, as this often determines if you pay the employee a salary or hourly wage.
Additionally, as you help prepare your new employee for their job, be aware that deductions made from wages for employer-required uniforms or tools aren’t legal if they reduce employee wages below the minimum wage required by the FLSA or the amount of overtime pay due.
State Minimum Wage Laws
Understanding the minimum wage laws in your state prevents you from underpaying employees, which could lead to repayments, penalties, and fees. Some states have a separate or higher minimum wage than the federal minimum wage (currently $7.25 per hour).
The following states have adopted a minimum wage higher than the federal required minimum:
*Rates as of Jan. 1, 2022.
**Minimum wage for all of New York state is $13.20, with the exception of Long Island ($15.00) and Westchester ($15.00).
Some states follow the federal minimum wage guidelines, set at $7.25 per hour. These include: Georgia, Iowa, Idaho, Indiana, Kansas, Kentucky, North Carolina, North Dakota, New Hampshire, Oklahoma, Pennsylvania, Texas, Utah, Wisconsin, and Wyoming.
NOTE: There is no set minimum wage in the following states: Alabama, Louisiana, Mississippi, South Carolina, and Tennessee.
Be aware of industries and job types that are exempt from federal minimum wage requirements.
During the interview and candidate screening process, there are specific laws to keep in mind—those that prevent you from asking about previous salaries, and those that require you to remove criminal history questions from your applications and interviews. Staying abreast of these interviewing laws can help you avoid legal issues.
Ban the Box Law
“Ban the box” laws require employers to remove criminal history questions from employment applications and their interviews. The law further states that you may not legally inquire about criminal convictions with job applicants until you have extended at least a verbal offer of employment.
Salary History Requests Ban
There’s also a regulation many states have implemented that bans companies from asking candidates about salary history. The idea behind this movement is that employers may be tempted to reset offers of annual pay at a rate that matches the candidate’s pay history and not the level of position the employer is filling.
Throughout the interview process, do not ask candidates about pay history. Instead, inquire about their salary expectations moving forward and consider sharing what your open position pays.
Fair Credit Reporting Act (FCRA)
Under the FCRA, employment background checks are oftentimes allowed and may include a copy of the candidate’s credit report.
The FCRA does not require employers to conduct employment background checks, but the law sets a national standard that employers must follow when doing employment screening. In some states, laws may give an employee more rights than the FCRA.
We recommend including an employment candidate’s credit profile only if the job you’re considering hiring them for merits such action (such as an accountant or IT professional role).
Illegal Interview Questions
When conducting interviews there are illegal questions you should avoid. These questions can be considered discriminatory and could result in potential lawsuits. They include asking questions on protected class topics such as race, religion, sex, or nationality.
New Hire Laws
When hiring new employees, there are specific laws and regulations related to their employment that must be followed. You must verify an employee’s eligibility to work in the US, report new hires to your state, and post workplace posters.
I-9 Employment Eligibility Verification Form
Under federal law, employers are required to verify an employee’s eligibility to work in the US by completing an I-9 Employment Eligibility Verification form within three days of the employee’s start date.
The I-9 confirms your employees are eligible to work in the US. This form should be completed and kept in a separate employee file.
New Hire Reporting
The Office of Child Support Enforcement requires that all employers report basic information on new and rehired employees within 20 days of hire (note that some states require it sooner). Private sector employers report to the State Directory of New Hires. Federal agency employers report to the National Directory of New Hires.
The state and federal government utilizes the new hire reporting process to assist with mandates such as child support payments, garnishments, and so on. All employers, regardless of size, must comply with their state’s new hire reporting requirements.
Statutes and regulations enforced by the DOL require that notices be provided to employees and/or posted in the workplace. The DOL provides free electronic copies of the required workplace posters, and some of the posters are available in languages other than English.
Post labor posters in conspicuous places for all employees to see and ensure that electronic ones are made available to those who need them (remote employees).
Employee Rights Laws
Employees are guaranteed certain rights. Be sure you understand and follow the employee laws surrounding these rights. These include retirement benefits, workers’ compensation, and child labor laws.
Employee Benefit Security
The Employee Retirement Income Security Act (ERISA) regulates employers who offer pension or welfare benefit plans for their employees. Title I of ERISA imposes a wide range of fiduciary, disclosure, and reporting requirements on businesses administering pension and welfare benefit plans.
Under Title IV, certain employers and plan administrators must fund an insurance system to protect certain kinds of retirement benefits, with premiums paid to the federal government. You’ll need to be aware of what you’re responsible for paying before offering such benefits to new employees.
There are also reporting requirements for the continuation of healthcare benefits after employees leave the company under COBRA (Comprehensive Omnibus Budget Reconciliation Act of 1985) and preventing the disclosure of sensitive patient health information under HIPAA (Health Insurance Portability and Accountability Act).
If you choose to offer benefits, including 401(k) and flexible spending accounts, as well as several other qualifying benefits, ERISA’s requirements may impact how you offer and govern these benefits.
Although the requirement to have workers’ compensation insurance comes from the federal government, the enforcement and guidance employers receive is from state labor offices. If you work for a private company or a state government, you should contact the workers’ compensation program for the state in which you live or work each time you hire a new employee. If they are located in a state that you haven’t previously employed anyone, let your workers’ compensation provider know because they will have to register that state under your policy.
There are a number of industry-specific programs and resources available:
- The Longshore and Harbor Workers’ Compensation Act (LHWCA), administered by the Office of Workers’ Compensation Programs (OWCP), provides for compensation and medical care to certain maritime employees (including a longshore worker or other person in longshore operations and any harbor worker, including a ship repairer, shipbuilder, and shipbreaker).
- The Energy Employees Occupational Illness Compensation Program Act (EEOICPA) is a compensation program that provides a lump-sum payment of $150,000 and prospective medical benefits to employees (or their survivors) of the Department of Energy and its contractors and subcontractors in the event they are afflicted with cancer caused by exposure to radiation or other work-related illnesses.
- The Federal Employees’ Compensation Act (FECA) establishes a comprehensive and exclusive workers’ compensation program that pays compensation for the disability or death of a federal employee resulting from personal injury sustained while in the performance of duty.
- The Black Lung Benefits Act (BLBA) provides monthly cash payments and medical benefits to coal miners totally disabled from pneumoconiosis (“black lung disease”) arising from their employment in the nation’s coal mines.
Child Labor Laws
When bringing on employees under the age of 18, there are certain stipulations you need to know before making a job offer. Further, there are only certain jobs 16-year-olds, for example, can perform with limited hours per day to work.
Child labor provisions under FLSA are designed to protect the educational opportunities of youth and prohibit their employment in jobs detrimental to their health and safety. FLSA restricts the hours that youth under 16 years of age can work and lists hazardous occupations too dangerous for young workers to perform.
There are laws put in place to protect employees from discrimination. These employees are part of a protected class of individuals that may not be discriminated against due to race, religion, age, sex, nationality, etc. It is imperative that you follows these anti-discrimination laws during the interview and hiring process.
Certain laws related to specific industries or groups of workers need to be followed by all employers when hiring these types of employees.
Government Contracts, Grants, or Financial Aid
Although specifically relevant for companies that receive government funding, do not ignore regulations that companies you may partner with have, because once you conduct business with them, you may also be required to adhere to the same stipulations.
Recipients of government contracts, grants, or financial aid are subject to wage, hour, benefits, and safety and health standards under the following:
- The Davis-Bacon Act requires payment of prevailing wages and benefits to employees of contractors engaged in federal government construction projects.
- The McNamara-O’Hara Service Contract Act sets wage rates and other labor standards for employees of contractors furnishing services to the federal government.
- The Walsh-Healey Public Contracts Act requires payment of minimum wages and other labor standards by contractors providing materials and supplies to the federal government.
Uniformed Services Employment and Reemployment Rights Act (USERRA)
Certain people who serve in the armed forces have a right to reemployment with the employer they were with when they were called to report for service. This includes those called from the reserves or National Guard. It is important to know this during the recruitment process if a returning service member requests their position or a similar one back.
Several agencies administer programs related solely to the construction industry. The Occupational Safety and Health Administration (OSHA) has special occupational safety and health standards for construction; the Wage and Hour Division, under Davis-Bacon and related acts, requires payment of prevailing wages and benefits.
The Office of Federal Contract Compliance Programs enforces Executive Order 11246, which requires federal construction contractors and subcontractors, as well as federally assisted construction contractors, to provide equal employment opportunity; the anti-kickback section of the Copeland Act precludes a federal contractor from inducing any employee to sacrifice any part of the compensation required.
Migrant & Seasonal Agricultural Workers
The Migrant and Seasonal Agricultural Worker Protection Act (MSPA) regulates the hiring and employment activities of agricultural employers, farm labor contractors, and associations using migrant and seasonal agricultural workers. The Act prescribes wage protections, housing and transportation safety standards, farm labor contractor registration requirements, and disclosure requirements.
The FLSA exempts agricultural workers from overtime premium pay, but requires the payment of minimum wage to workers employed on larger farms (farms employing more than approximately seven full-time workers).
The Act has special child-labor regulations as well that apply to agricultural employment; children under 16 are forbidden to work during school hours and in jobs deemed too dangerous. Children employed on their families’ farms are exempt from these regulations.
The Immigration and Nationality Act (INA) requires employers that want to use foreign temporary workers on H-2A visas to get a labor certificate from the Employment and Training Administration certifying that there are not sufficient, able, willing, and qualified US workers available to do the work.
Employers that know about and follow employment laws during the interviewing and hiring processes make better hiring decisions resulting in a stronger team. The fundamental goal of employment law is a continued effort to ensure workers have fair equity and work-life balance, and job candidates have fair access to employment opportunities of interest.