Federal employment law overview

by The Brightmine Editorial Team

Employment law governs the duties, rights and obligations within the employer-employee relationship. While some laws are designed to protect employees, others make it possible for employers to effectively manage their workforce. Federal employment law is composed of a complex set of rules made up of various components, such as: 

• Executive Orders; 
• Statutes; 
• Regulations; 
• Agency interpretive materials and opinions; and 
• Case law. 

Not all federal laws apply to every employer. A law’s applicability depends on a variety of factors including the employer’s size, the location of its business and employees and the industry in which the employer operates. 

Select federal employment requirements are summarized below to help an employer understand the range of employment laws affecting the employer-employee relationship. An employer must comply with federal, state, and local law. Where there is overlap, complying with the law that offers the greatest rights or benefits to the employee will generally apply.

Equal Employment Opportunity (EEO) and worker protections

Various employment laws provide employees with certain rights, such as the right to: 

• Be paid fair wages; 
• A safe workplace; 
• A workplace free from discrimination and harassment; and 
• File complaints against an employer without fear of retaliation. 

Fair employment practices

Fair employment practice laws are designed to ensure equal employment opportunity. Such laws protect employees from discrimination and require employers to treat employees equally.

Title VII of the Civil Rights Act of 1964 (Title VII) prohibits employment discrimination based on race, color, national origin, sex (including pregnancy, sexual orientation and gender identity) and religion. The law applies to private and public employers with 15 or more employees; the federal government; employment agencies; and labor organizations. 

The Pregnancy Discrimination Act amended the definition of sex under Title VII and prohibits discrimination against an employee based on pregnancy, childbirth or a related medical condition. 

Enforced by the Equal Employment Opportunity Commission (EEOC), Title VII prohibits discrimination in almost every aspect of employment including: 

• Recruitment; 
• Hiring; 
• Pay and benefits; 
• Assignments; 
• Promotions; 
• Discipline; and 
• Discharge. 

Title VII also prohibits harassment in the workplace, requires employers to provide certain reasonable accommodations for employees’ religious beliefs, and protects employees who exercise their rights under the law from retaliation. 

The Americans with Disabilities Act prohibits discrimination against individuals with disabilities with regard to employment, including job application procedures and hiring, compensation, job training, termination and all other terms, conditions and privileges of employment. The law also requires an employer to provide reasonable accommodation to an individual with a disability who is qualified for the job the individual holds or desires. 

The Age Discrimination in Employment Act (ADEA) prohibits employers with 20 or more employees from treating an applicant or employee age 40 or above less favorably because of their age. The ADEA also prohibits harassment and retaliation.  

The Older Workers Benefit Protection Act (OWBPA) amended the ADEA to prohibit age discrimination in the provision of employment benefits. The OWBPA also imposes certain restrictions on employers seeking releases relating to age discrimination claims. 

In addition, the Genetic Information Nondiscrimination Act (GINA) prohibits employers with 15 or more employees from: 

• Harassing or discriminating or retaliating against employees and applicants based on genetic information; 
• Using genetic information in making employment decisions, such as hiring or firing an employee or classifying workers in a way that would deprive them of employment opportunities; or 
• Requesting, requiring or purchasing genetic information except under specific circumstances and includes strict limitations on their ability to disclose genetic information. 

Equal pay

All employers are required to comply with the Equal Pay Act (EPA). The EPA:

• Prohibits discrimination in the payment of wages on the basis of sex; 
• Requires that men and women receive equal pay for equal work in the same establishment; and 
• If there is an inequality in wages between men and women, prohibits reducing the wages of either sex to equalize their pay. 

The Lilly Ledbetter Fair Pay Act ammended the EPA’s 180-day statute of limitations for filing a discriminatory pay charge to allow the limitations period to reset with each new discriminatory action. Accordingly, every time an employee receives a discriminatory payment, the employee has a new period of 180 days in which to file a claim. 

Pay transparency

There is currently no federal pay transparency law that requires private employers to disclose the pay range for a position to applicants or employees. However, several states and localities have enacted pay transparency laws.

Salary history inquiry restrictions

There is currently no federal law that restricts private employers from inquiring into or relying upon a job applicant’s salary history. However, a number of states and localities have enacted laws restricting salary history inquiries.

Employee wage disclosure rights

Under the National Labor Relations Act (NLRA), employers may not ban salary discussions between employees or impose pay secrecy policies.

Pregnancy accommodation

The Pregnant Workers Fairness Act (PWFA) requires covered employers to reasonably accommodate qualified employees and applicants with known limitations related to pregnancy, childbirth, or related medical conditions. 

Under the PWFA, covered employers cannot: 

• Require an employee to accept an accommodation without first engaging in the interactive process; 
• Deny employment opportunities to a qualified employee or applicant based on the person’s need for a reasonable accommodation; 
• Require an employee to take leave if the employer can provide another reasonable accommodation that would allow the employee to keep working; 
• Retaliate against a person for reporting or opposing unlawful discrimination under the PWFA; or 
• Interfere with any person’s rights under the PWFA. 

The PWFA applies to employers of 15 or more employees. 

Breastfeeding breaks

The FLSA, as amended by the PUMP for Nursing Mothers Act, requires an employer to provide all female employees, whether exempt or nonexempt, with reasonable break time to express breast milk to nurse a child for one year after the child’s birth and as often as the employee needs to do so. 

The FLSA does not require employers to pay nursing mothers for the time they spend in breastfeeding breaks unless it is otherwise required by federal law or by state laws that may provide greater protections to employees (for example, providing compensated break time, providing break time for exempt employees, or providing break time beyond one year after the child’s birth). However, breastfeeding breaks will be considered compensable hours worked if the employee is not completely relieved from duty during the entirety of their break. Nonexempt employees be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek 

An employer also is required to provide a place to express breast milk at work that meets certain requirements. 

An employer with fewer than 50 employees is not subject to the FLSA breastfeeding break requirements if compliance would impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature or structure of its business. There are also certain industry-specific exemptions. 

Access to personnel files

Federal law does not govern the right of employees to access personnel files; however, a number of state laws provide employees with the right to have access to their own personnel files and should be consulted. 

In addition, many collective bargaining agreements contain provisions granting personnel file access to employees and, in some instances, to union representatives.

Whistleblower protections

Numerous federal statutes include provisions that prohibit employers from taking adverse or negative employment actions against whistleblowers, for example the: 

• Fair Labor Standards Act; 
• Family and Medical Leave Act; 
• Affordable Care Act; and 
• Occupational Safety and Health Act (OSH Act). 

Whistleblowing occurs when an employee reports information or makes a complaint of employer mismanagement, corruption, violation of law or other wrongdoing or misconduct. 

Policies and practices should be implemented to provide adequate means for employees to make whistleblowing complaints internally and protect whistleblowers from retaliation. 

If an employee engages in protected whistleblowing activity, an employer has an obligation to ensure that the employee is not subject to threats, harassment or other forms of discrimination or retaliation because of the protected activity. Any disciplinary action, demotion, suspension or discharge should be reviewed to make sure the decision is based on conduct unrelated to the employee’s protected activity. 

Scheduling

Brightmine is not aware of any federal scheduling law applicable to private employers. However, certain jurisdictions have enacted ordinances surrounding employer scheduling of shifts. These laws provide for flexible, predictive and predictable scheduling and working arrangements.

Recruiting and hiring

Employers may be required to comply with certain requirements related to recruiting and hiring.

Credit checks

The Fair Credit Reporting Act (FCRA) governs how credit information is accessed and may be used in making employment decisions making employment decisions. Although the FCRA provides the national standards for employment screening performed by a consumer reporting agency, it does not apply when an employer conducts its own background checks. 

An employer must make a clear and conspicuous written disclosure to an applicant or employee and obtain their prior written authorization before acquiring a consumer report. In addition, an employer must certify to the consumer reporting agency that the report will not be used in violation of any federal or state equal opportunity laws. 

Before taking any adverse action based on a consumer credit report obtained from a consumer reporting agency, an employer is required to provide an applicant or employee with: 

• A summary of FCRA rights; 
• The name, address and telephone number of the consumer reporting agency making the report; 
• A copy of the credit report; and 
• Information on how to dispute the contents of the report. 

Ban the Box and Fair Chance

The Fair Chance to Compete for Jobs Act (Fair Chance Act), prohibits the federal government from requesting criminal history information from applicants before making a conditional job offer. The Fair Chance Act also prohibits federal contractors from: 

• Requiring that an individual or sole proprietor submitting a bid for a contract disclose their criminal history record information before determining to whom to award the contract; and 
• Requesting verbally or in writing the disclosure of criminal history record information regarding an applicant for a position related to work under a contract before the contractor extends a conditional offer to the applicant. 

E-Verify

E-Verify, or the Electronic Verification system, is a web-based program operated by the Department of Homeland Security (DHS) in partnership with the Social Security Administration (SSA). E-Verify allows participating employers to electronically verify the information provided by the employee on the Form I-9. It compares the information provided to the data contained in the databases of the SSA and the DHS. Employers are then advised of the newly hired employee’s eligibility to work in the US. 

Participation in E-Verify is free, and it is voluntary for most employers except where mandated by state law or federal contracts. If an employer chooses to participate in E-Verify, it must use it for all new hires at the same location.

Wage and hour

Employers may be required to comply with certain wage and hour requirements. 

Minimum wage

The federal Fair Labor Standards Act (FLSA) requires covered employers to pay nonexempt employees the federal hourly federal minimum wage rate for every hour they work. In addition to federal minimum wage requirements, an employer must comply with state and local minimum wage requirements, which may differ from the federal minimum wage. When these rates conflict, an employer must pay covered employees the rate that is most beneficial to the employee. 

Complying with minimum wage requirements goes beyond paying employees the correct hourly rate. For example: 

• Deductions that reduce an employee’s net pay below the minimum wage are generally prohibited, with some exceptions. 
• Certain employees, such as students, workers with disabilities, apprentices and messengers, may be paid a subminimum wage.
• Employers may pay workers aged under 20 a rate that is lower than the minimum wage for the first 90 days of their employment.

Overtime

Most private employers must pay nonexempt employees overtime pay when they work more than a certain number of hours, usually 40 hours in a workweek, which is defined as a fixed and regularly recurring period of 168 hours, or seven consecutive 24-hour periods. The workweek does not have to coincide with the calendar week. 

Overtime hours are paid at one and one-half times an employee’s regular rate of pay. Most often, calculating the amount of an employee’s overtime pay is as simple as multiplying the employee’s regular rate of pay by one and one-half for each hour of overtime. However, there are many situations that are more complicated.

Meal and rest breaks

The FLSA does not require an employer to provide meal breaks. But if an employer chooses to provide them, the employees must be completely relieved from duty for the purpose of eating regular meals. Employers that do provide meal breaks usually allow at least 30 minutes. The time employees are on the break does not constitute working time. An employee is not completely relieved from duty if they are required to perform any work, whether active or inactive, while eating. 

The FLSA also does not require an employer to provide rest breaks to employees. However, if an employer does provide rest breaks it must comply with the FLSA regarding compensability of such time. In general, short rest breaks of 20 minutes or less are counted as hours worked and are usually paid. Breaks lasting longer than 20 minutes do not count as hours worked and are usually not compensated.

Child labor

The FLSA’s child labor provisions govern the number of hours and the type of work performed by minors. Restrictions may vary depending on the age of the minor. For example, different rules apply to minors under age 18, 16 and 14 regarding the number of hours and the times of day and/or year they may work and the types of work they may be perform. 

Although not required, an employer may obtain an age certificate showing that an employee meets the age requirements established by the FLSA to help shield itself from liability.

Pay and benefits

Employers may be required to follow certain requirements with respect to employee pay and benefits.

Wage payment methods

The FLSA does not include requirements regarding wage payment methods. Therefore, an employer must follow state law when choosing whether to pay employees for work performed with cash or paper checks, by direct deposit or payroll debit card. Electronic payments made by direct deposit and payroll debit card are regulated by both federal and state law. 

Strategic selection of the wage payment methods to offer employees should account for both legal requirements and practical employee needs, with electronic options being particularly beneficial for remote or traveling workforces due to their efficiency and security.

Pay frequency and lag time

The FLSA only generally requires that employees be paid promptly by their regular payday, and federal courts have held employers in violation of the FLSA for not paying employees on time. 

Lag time allows an employer to reconcile payroll data, such as overtime entitlement and vacation and sick pay accruals. This eliminates mistakes that can occur when the payroll department does not have all the information needed to pay employees currently. 

Federal regulations permit employers to change pay frequencies if the change is permanent and made for a legitimate business reason, but they prohibit changes to avoid paying overtime pay.

Pay deductions

Employers are required to make deductions from employees’ wages for federal, state and local income taxes and employment taxes (i.e., Social Security and Medicare taxes and unemployment taxes). In addition, employers must withhold these taxes on the value of the fringe benefits and health insurance benefits they provide to employees. In addition, an employer may be required to withhold and remit payments for child support, creditor garnishments, student loans, tax liens or other employee debts. 

Pay statements

There are no federal laws regarding pay statements. However, most states (and some localities) require an employer to provide each employee with a pay statement or paystub on paydays. The extent of these requirements varies considerably but most jurisdictions require a summary of the wage amount the employee is receiving for the pay period, itemized deductions, how often a statement must be provided and whether it may be provided electronically. 

Wage theft

Wage theft occurs when employers deny workers the full amount of wages they are legally owed. Among other illegal actions, this may include failing to pay minimum wage or overtime, making illegal pay deductions or requiring “off-the-clock” work. State wage theft laws supplement federal wage payment protections under the FLSA, often expanding upon basic employer obligations and increasing penalties for noncompliance. 

Proactive measures such as auditing pay practices, maintaining meticulous records and training supervisors and managers, are critical for mitigating wage theft risk and avoiding severe legal consequences. 

Benefit plan administration

Employers that provide certain health care benefit and retirement plans must comply with the Employee Retirement Income Security Act (ERISA). ERISA sets minimum standards for most retirement plans and health plans set up by private employers in order to protect the interests of the employees who participate in such plans. For example, ERISA:

• Requires plans to provide participants with plan information; 
• Sets minimum standards for participation, vesting, benefits accrual and funding; 
• Sets out fiduciary responsibilities for managing and controlling plan assets; and 
• Regulates and sets standards for reporting requirements. 

The Affordable Care Act imposes a number of requirements that apply to employer-sponsored group health plans. These requirements have a large influence on health benefit plan design and strategy, touching on issues ranging from required health benefits to bans on benefit limits. Certain employers also may be subject to penalties for failure to offer employees affordable coverage. 

Health care continuation

Employers of 20 or more employees that provide group health insurance coverage are required to comply with Consolidated Omnibus Budget Reconciliation Act (COBRA) requirements to provide continued health insurance coverage to employees and certain family members for a limited time after certain qualifying events, such as the loss of a job. COBRA contains strict rules for: 

• How and when continuation coverage must be offered and provided; 
• How employees and their families may elect continuation coverage; and 
• The circumstances that justify terminating continuation coverage. 

Temporary disability insurance

There is currently no law that requires private employers to offer temporary disability insurance (TDI). However, a handful of states require employers to provide temporary disability insurance. The mandated length of coverage and amount of coverage varies by state.

Health information and privacy 

The Health Insurance Portability and Accountability Act (HIPPA) affects the administration of group health plans. The law is designed to: 

• Better protect employees’ health insurance when they change or leave a job (i.e., provide them with portability); 
• Prohibit discrimination based on individual health factors; and 
• Ensure the privacy and security of individuals’ protected health information (PHI). 

HIPAA does not require group health plans to provide any particular benefits, but it does require that any benefits provided be made available to similarly situated individuals. HIPAA also requires employers to provide employees and their dependents an opportunity to enroll in the employer’s health plan during a special enrollment period following certain qualifying events, such as when an individual becomes a new dependent through marriage, birth or adoption. 

Social security and medicare

The Social Security Act provides workers and their families with income replacement upon retirement, the death of a spouse and permanent disability. Social Security is administered by the Social Security Administration and is split into two programs: (1) Social Security and (2) Medicare. 

Benefits provided under Social Security include retirement benefits, disability benefits, death benefits and survivor benefits. Medicare is a federal health insurance program that covers individuals age 65 or over, disabled workers under age 65 and individuals with end-stage renal disease. 

Time off and leaves of absence

Employers may be required to follow certain requirements with respect to time off and leaves of absence.

Family and medical leave

The Family and Medical Leave Act (FMLA) entitles eligible employees of covered employers to unpaid, job-protected leave for the following reasons: 

• The employee’s inability to work due to a serious health condition; 
• To care for an immediate family member with a serious health condition; 
• The birth, adoption or foster care of the employee’s child; and 
• To address a military exigency arising from a family member’s military duty or call to military duty. 

While an employee is out on FMLA leave, an employer must maintain the employee’s health benefits and follow certain rules regarding other employee benefits and compensation. An employee also must be reinstated to their same position (or an equivalent position) when they return from FMLA leave. 

Because the FMLA protects employees from discrimination or retaliation based on exercising their FMLA rights, an employer cannot use an employee’s use of FMLA leave as a factor in deciding to take an adverse employment action against the employee. 

Paid sick leave

Executive Order 13706 mandates paid sick leave for employees of federal contractors.  

Employees may use paid sick leave for their own or an eligible family member’s physical or mental illness, injury or medical condition, or to obtain a diagnosis, care or preventive care from a health care provider, as well as for absences resulting from domestic violence, sexual assault or stalking (e.g., to obtain additional counseling, relocate, seek assistance from a victim services organization or take related legal action). 

Other time off requirements

In addition to the FMLA and paid sick leave, employers may also be required to comply with other leave and time off laws such as: 

• The Uniformed Services Employment and Reemployment Rights Act; and  
• The Jury System Improvements Act. 

Employers should also be aware that many states and localities may provide employees with more leave rights than required by federal law. 

Health and safety

Employers may be required to follow certain requirements with respect to employee health and safety.

Occupational safety and health

The Occupational Safety and Health Act (OSH Act) imposes on all employers a general duty to provide a workplace free from recognized safety and health hazards that could cause death or serious physical harm. In particular, the OSH Act requires employers to: 

• Provide employees with safety information and training; 
• Post required notices; 
• Perform safety checks and make needed corrections; 
• Maintain required records; and 
• Report workplace safety incidents to the Occupational Safety and Health Administration (OSHA)

OSHA is empowered to conduct workplace inspections and require employers to fix safety problems. 

As part of providing a safe working environment, a workplace safety program should be established and maintained. Such Programs may include safety training, emergency preparation and accident resolution policies and procedures. Policies and practices regarding safe on-the-job driving also should be implemented and enforced.

Drug and alcohol testing

Federal law does not prohibit employers from testing employees and job applicants who are offered a position for current illegal drug use and alcohol impairment. Some state laws limit the scope of drug and alcohol testing programs and restrict or limit the conditions under which such testing is allowed.  

Any drug and alcohol testing program and subsequent action by an employer based on test results must be implemented in compliance with the Americans with Disabilities Act (ADA), collective bargaining agreements, and other federal, state and municipal laws that protect workers from discrimination or violations of privacy. 

Employers that receive federal grants or contracts and private organizations that do business with the federal government must comply with the Drug-Free Workplace Act which requires employers to take measures to maintain a drug-free workplace, including adopting a policy prohibiting drug use in the workplace.

Smoke-free workplace

Employers have a responsibility under the Occupational Safety and Health (OSH) Act to keep the workplace free from recognized hazards, including smoking. Many states and localities also prohibit smoking in the workplace. 

Employers that want to prohibit smoking in the workplace may want to consider implementing a smoke-free workplace policy to encourage and promote good health and to advise employees of the prohibition against smoking in the workplace.

Weapons in the workplace

The threat of guns and concealed weapons in the workplace is one of the many serious security issues employers should consider. While there is no federal law that regulates weapons in the workplace, such laws exist in many states.  

The OSH Act requires employers to provide a workplace free from recognized hazards that are likely to cause death or serious physical harm to employees. Accordingly, employers may want to consider implementing a policy prohibiting weapons in the workplace to help reduce the risk of potential workplace violence. 

Safe driving practices

Prohibiting employee cell phone use and texting while driving for business-related reasons helps promote driving safety and can help limit liability from accidents involving employees who drive and use electronic devices for business-related purposes. 

The Occupational Safety and Health Administration will fine employers that appear to encourage dangerous activities such as texting, using the phone or drinking while driving. 

Organizational exit

Final pay

While there are no federal requirements related to paying final wages, employers must be aware of and comply with applicable state and local laws in this respect. Employers with remote or multistate workforces must be especially careful to comply with the law of the correct jurisdiction when paying final wages. 

Mass layoffs

Most employers that employ 100 or more employees must comply with the Worker Adjustment and Retraining Notification Act (WARN Act). The WARN Act requires covered employers to give employees 60 days’ advance notice before a plant closure or mass layoff. Employers that fail to give the required notice may be responsible for providing wages and benefits to those employees and may be subject to civil fines and penalties. 

In addition to complying with the WARN Act, employers initiating a reduction in force or plant closing must perform due diligence to ensure that company policies (including those prohibiting discrimination and retaliation) and provisions of any collective bargaining agreements are carefully followed. 

AI in employment

There is currently no federal legislation regulating AI. However, a growing number of states and localities are introducing laws to ensure AI is used fairly and responsibly in employment settings.