6 Important Labor And Employment Regulations To Know About Wages

Monday, October 15th, 2018
labor and employment laws

If you are the owner of a business, you must be diligent in managing your employees’ wages, work hours, tipping practices, and overtime. Proper management of these elements is essential for keeping your employees productive and satisfied. If you do not respect labor and employment laws, you will open your business to legal problems, including lawsuits by employees. Here are six of the most critical employment law issues that you should understand for the protection of your business and your workers.

Applicable minimum wage

You should know the applicable minimum wage for your employees according to the law. The Fair Labor Standards Act has outlined the federal minimum wage for workers. This wage is imposed for covered and non-exempt employees. However, it is important to note that most states have their own minimum wage laws as well. You should check the regulations for your business before making any wage decisions.

In general, if your employees are subject to state and federal laws, the applicable wage will be the higher rate of the two. Choosing the lower amount could expose your business to legal problems. You should also know that there are some exemptions that you must consider when looking at minimum wages. For instance, the minimum wage may be different for people on government aid, student learners, full-time students, and tipped employees.

Small business minimum wage

Small businesses are subject to minimum wage laws if their annual sales income surpasses the threshold set in the Fair Labor Standards Act. Failing to meet the requirements due to the size of your operations can result in negative consequences. However, your business will still be subjected to the same minimum wages with less than the set annual income if you operate across different states.

Interstate commerce is subject to broad interpretation in the legal industry. For instance, if your business handles goods, mail, or even phone calls across state lines, it might be considered to be engaged in interstate commerce. It is best to consult a lawyer before deciding to pay a minimum wage lower than the federal minimum. If you do get involved in a legal case, the court could interpret some operations as interstate work.

Compensatory time

You should handle compensatory time with caution to avoid violating federal employment laws. Some business owners choose to provide compensatory time as opposed to paying wages for the overtime put in by their workers. This practice might seem ideal because employees get compensatory pay for every additional hour they work. However, this is illegal because workers will not get their overtime premiums.

Overtime for executive employees

Under normal circumstances, executive employees or individuals in managerial positions are not entitled to overtime pay. However, you should understand the meaning of executive employees under the applicable federal law. True managers should be in charge of at least two full-time employees, manage the company or a subdivision, and have the rights to hire and fire workers. If your managerial staff does not have these rights, they cannot be exempt from overtime payment.

Wages for tipped employees

If your employees regularly earn tips, you must ensure that their total wages match up to the federal minimum to avoid legal action. Simply speaking, the wages for tipped workers can be low if your employees earn significant tips. But, the total amount of money earned by each employee, including the basic pay and the tips, must add up to the minimum wage. If the amount is less than the legal rate, you must provide funds to make up for the difference.

Hiring a labor and employment attorney

Having someone on your side when something goes wrong can help your business stay strong. Whether you need help with a lawsuit or would like to learn more about staying compliant with federal labor and employment laws, an experienced attorney can help. These professionals are dedicated to keeping your business compliant and protecting your company.

Employment and labor laws can be complicated and hard to keep up with while managing a company. If your business is in need of help with employment law compliance, the Labor and Employment team at Brown & Fortunato, P.C. is ready to help. You can Contact Us by email or call us at 833.228.6300 to learn more about our Practice Areas.