A Business Owner’s Guide to Applicability of Key Federal Employment Laws

July 30, 2018 Tags: Articles, Employment, Federal Rules, Labor & Employment, Legal News, Rules, Russ Brown

How many employees work at your company?”  I ask that question early and often when I first meet new and potential clients.  The answer immediately helps employment lawyers identify the potential applicability of most federal employment laws.

The purpose of this guide is to help you flag key federal laws and their application according to your company’s employee head count.  What this post is not is a detailed analysis of every applicable law impacting employers.  For example, not covered below are state and local laws (notably, in Texas, these laws often mirror federal law), non-competition agreements, tortious interference, trade secrets, ERISA and benefits issues, breach of contract (employment agreements), independent contractor issues, tax issues, and other nuanced areas of employment law that impact employers. Instead, the best use of this guide provided by The Law Offices of David T. Schlendorf is to bring to your attention the first steps to minimizing risk or reducing exposure.

The “Mom & Pop” Federal Laws (1+ Employees)

This little minefield of federal laws applies to all business with at least one employee. In other words, even your favorite “mom and pop” business must be aware of these laws.

  • Uniformed Services Employment and Reemployment Act (USERRA). This law covers our brave members of the armed forces, and more specifically, their ability to return to their job after serving.
  • Occupational Safety and Health Act (OSHA). Outside of some narrow exclusions that you should specifically speak with a lawyer about (e.g., family farms), this law covers workplace health and safety. Once employers have at least 10 employees, they must also keep specific records regarding injuries and illnesses. Employers in unique business where risk is extremely low may not be required to keep records.
  • Section 1981 of the Civil Rights Act of 1866 (Section 1981). This law is not often relied on by litigants with race discrimination claims, but the over 150-year-old law nevertheless provides great risk to employers.  Section 1981 prohibits discrimination based upon race.  Not only are all private employers covered, but Section 1981 also has a longer statute of limitations and provides more monetary exposure than a traditional Title VII race claim.
  • National Labor Relations Act (NLRA). Despite the NLRA’s reputation of its application to traditional labor law impacting labor unions, portions of the NLRA apply to private, non-union employers other than a few statutory exclusions.  The NLRA encourages collective bargaining, union rights, and seeks to limit specific labor and employment practices that the government believes harms workers.  The magic words I most often run into in my practice are “protected concerted activities” for employees.  Employers cannot prohibit these activities, even if the employees are not unionized.
  • Fair Credit Reporting Act (FCRA). The FCRA covers an employer’s use of information obtained through consumer reporting agencies. Potential violations can stem from, e.g., failure to obtain consent or provide specific disclaimers.
  • Defend Trade Secrets Act (DTSA). This relatively recent law enacted in 2016 provides new avenues for liability for stealing trade secrets. The law also provides employees with protection if the employees share certain confidential information and trade secrets as a whistleblower.  The law also changed how employers draft employment documents such as employment agreements. More specifically, employees must be given specific written notice of DTSA protection.
  • Immigration Reform & Control Act (IRCA). This law requires employers to verify the identity and eligibility of workers to work in the United States.  Employers must obtain completed I-9 forms, verify forms of identification, and cannot hire workers ineligible to work in the United States.  IRCA also uniquely prohibits national origin discrimination for employers with 4 to 14 employees. Title VII (discussed later) covers national origin discrimination for 15+ employees. IRCA also covers citizenship discrimination for employers with 4+ employees.

Headcount is Virtually Irrelevant (1+ Employees and Other Factual Requirements)

These federal laws focus less on headcount (e.g., an employer must have only 1+ employee like the “mom and pop” laws above) and more on other factual qualifiers, which makes them a dangerous bucket of potential liability for unknowing employers.

  • Fair Labor Standards ACT (FLSA). The FLSA is focused on wages and hours worked.  This expansive law covers overtime, tips, wage deduction issues, required records on file, break times for breastfeeding, equal pay, child labor, and more.  While this law requires only one employee, there are other qualifiers such as a specific annual business or sales amount (>$500,000) in interstate commerce or by an enterprise engaged in commerce.
  • Equal Pay Act. This law prohibits treating someone differently in wage payment because of his or her sex. If your business meets the elements of FLSA coverage, you’re covered here too.
  • Sarbanes-Oxley Act (SOX). This expansive law provides whistleblower protections to employees reporting violations of law, and at times, opportunities for financial reward for reporting violations.  SOX application is almost entirely within the realm of publicly traded companies.

The “Bread & Butter” Employment Laws (15+ Employees)

One of the first statutory nuggets a young employment lawyer learns is that “15” typically is the threshold number of employees for applicability (and potential exposure) of what I describe as the “bread and butter” federal employment laws to employers.  Title VII, applicable to employers with 15+ employees have built careers on both sides of the bar, large labor and employment practice groups, and kept government agencies such as the Equal Opportunity Employment Commission (EEOC) relevant and very busy.

  • Title VII of the Civil Rights Act of 1964 (Title VII). Title VII outlaws discrimination based upon race, color, national origin, religion, or sex.
  • Americans with Disabilities Act (ADA). An employer cannot discriminate against a disabled employee or an employee regarded as being disabled.  There are some significant nuances to the application of this law, the provision of “reasonable accommodations”, and potential “undue hardship” on the employer, to name a few, so as with all these laws, speak with a knowledgeable employment lawyer regarding the finer details to reduce risk and avoid exposure. Changes to this law in 2008 through the ADA Amendments Act (ADAAA) further complicate the issues facing employers.
  • Genetic Information Nondiscrimination Act (GINA). Employers cannot discriminate against an employee based upon genetic information, which can include family medical history.

Laws Applicable to 20+ Employees

  • Age Discrimination in Employment Act (ADEA). This law prohibits discrimination against employees 40 years or older.  As a result of this law, employers must give employees 40 or older up to 21 days to consider settlement agreements and releases and then 7 days to potentially revoke the agreement.

Laws Applicable to 50+ Employees

  • Family and Medical Leave Act (FMLA). The FMLA is focused on providing employees with protected (unpaid) leave up to 12 weeks when needed for a qualifying reason. These reasons could range from the birth of a child to a serious illness to the need to care for an immediate family member who is ill. This law’s application can be tricky, as there are other unique factual elements to determine applicable employee headcount and employee eligibility even if the law generally applies to the employer.

Laws Applicable to 100+ Employees

  • Worker Adjustment and Retaining Notification (WARN). This law requires applicable employers to provide a window of time between notice of a plant closing or layoff and the actual plant closing or layoff.

The key take-away from this post hopefully is a new or renewed awareness of the applicability of a wide range of federal employment laws, impacting  publicly traded companies to even the smallest employers. My strong recommendation is that all employers, especially those over 15 employees, perform an informal audit of employment practices and documentation with their favorite employment lawyer to reduce risk and limit exposure.

Russ Brown is a labor and employment attorney who serves both companies and executives.  Brown Fox PLLC is a law firm focused on advising and representing businesses and business leaders, with a focus on what businesses face daily, including litigation, corporate, labor and employment, and real estate matters. 


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