Failure to understand the regulations that apply to your organization and be in compliance with them can create significant problems that distract from your mission. As a complement to EnsuriseHR’s webinar session on Organizational Risk & Compliance, we summarize many of the key regulations that impact U.S. employers.
Disclaimer: This is not exhaustive of all legislation, nor is it meant to be interpreted as detailing the exact requirements of each law.
26 Federal Employment Laws You Need to Know
In the United States, not all labor law applies to all employers. The smaller your organization, the fewer regulations you will need to be concerned with. Additionally, the laws are applied using a 6-12 month average for number of employees, giving you a grace period to comply with added regulations and requiring sustained compliance before dropping reducing requirements.
The Big Fifteen (for 1 to 15 employees)
These fifteen labor laws date back as far as 1935, cover the gamut of fundamental employee protections in the United States, and apply to all U.S. employers with at least one employee. (Sole proprietorships are exempt.)
Overview: Outlines key requirements for employee pay and payroll records, including – minimum pay rate, hourly vs salary, overtime, under 18, and record keeping that applies to your payroll.
Points of Confusion: Not all roles are permitted to be classified as independent contractors, and exempt, non-exempt, and independent contractor versus W-2 classifications can be really confusing for business and nonprofit leaders. Failure to comply correctly can result in extremely expensive back payments, fines, and penalties.
Bonus: States often have additional rules that apply and constitute key compliance risks.
Overview: Requires employers to confirm employment eligibility for all W-2 employees within three days of their hire date and keep completed I-9 forms in case of audit.
Points of Confusion:
- Employers must view employee’s work authorization documents in person, unless permitted an exception (not common).
- Employers are responsible for tracking expiration of visas or temporary work authorizations and ensuring that up to date documentation is provided.
- The E-Verify program incorporates but does not take the place of I-9 requirements.
Bonus: Federal government contractors with contracts over $10,000 and employers in 9 U.S. states are required to use E-Verify.
Tip: Don’t assume that your forms are correct just because they’re in your payroll system. We actually find the most errors in third-party systems and fines for incomplete or missing forms can run up to $2,789 per form.
Overview: All employers have some obligations under the ACA. Even if your organization does not sponsor health insurance plans you still must provide an annual marketplace notice or face fines. Stipends (recorded as taxable income) instead of sponsored coverage are permissible for employers with fewer than 50 employees.
Point of Confusion: If you are a smaller organization that voluntarily provides employer-sponsored coverage, then all aspects of the Affordable Care Act, except some reporting requirements, apply to you.
Bonus: ACA also requires all employers to provide break time for nursing mothers.
Overview: Requires that all employers keep health related information confidential.
Point of Confusion: The employee can tell anyone they choose about their condition, but you, the supervisor or the leader, may not share the information without that employee’s express permission.
Tip: Provide guidance at hiring or promotion of supervisory staff, plus an annual reminder to protect against privacy violations that could result in claims for your organization.
Overview: UGESP provides guidance on employment selection procedures requirements that all recruitment and hiring procedures must be relevant, valid, and reliable. USERRA protects past, current and future service members from discrimination and all employers must provide military leave.
Point of Confusion: It may not be compliant to require a college degree (rather than equivalent work experience) for certain jobs.
Bonus: Federal government contractors must post all available jobs on designated veteran outreach sites.
Tip: Consistency on things like educational requirements, application forms and assessments, is key to compliance. We recommend putting processes and templates in place to streamline interview and onboarding.
Overview: Requires that men and women in the same workplace receive equal pay for performing jobs that require substantially equal skill, effort, and responsibility. Lilly Ledbetter allows up to 300 days to claim an EPA violation.
Point of Confusion: The law allows for differences, making it very challenging for employers to identify acceptable exceptions.
Tip: We find that the best way to avoid equal pay claims is to establish market-based pay ranges by position for each role in your organization, rather than negotiating pay on a person-by-person basis.
Overview: Requires all employers to provide unpaid, job-protected time off for documented jury service.
Bonus: Some state laws and the District of Columbia require paid time off.
Overview: If using polygraphs in your hiring process it’s important to confirm that your organization is covered under an exception to the Employee Polygraph Protection Act.
Overview: Employers are required to comply with legal garnishments or court orders from creditors to collect a debt from an employee.
Tip: Payroll services will ensure that you do not exceed the permissible withholding. But we recommend that you carefully confirm each garnishment before implementing to avoid fraudulent requests.
Overview: Both NLRA and Taft-Hartly Acts both refer to regulations relating to labor organizing.
Tip: If you have or may have union employees, you should consult an employment attorney to ensure every T is crossed and every I is dotted.
Overview: A highly technical set of regulations related to employee benefit and welfare plans like medical, dental, 401k.
Tip: A payroll provider will ensure compliance, but if you’re doing in-house payroll you should have a deep and thorough understanding of ERISA to avoid significant fines and penalties that come with making mistakes.
Overview: Employers are only permitted to take pre-tax deductions for medical or other benefit plans if they have a formal written Premium Only Plan (POP) documents in place. Compliance errors can result in costly penalties and tax assessments by the IRS against employees.
Tip: Some payroll platforms offer to create POP documents for a significant fee. Whereas most brokers will provide you with a POP for a minimal fee.
Overview: This law regulates federal payroll taxes.
Tip: Your payroll provider is your best protection to ensure your contributions in reporting are correct.
Overview: Limits employers’ right to candidate or employee credit information. If you are performing credit checks on candidates or employees, you will need to also provide very specific notifications and then access to any information that you receive based on that check.
Bonus: May states have laws to add additional limits on employers. You’ll want to make sure you’re aware of state regulations before performing credit or background checks.
Overview: Outlines a wide scope of health and safety requirements for U.S. workplaces, including training and notification requirements.
Additional Regulations for Larger Employers
For organizations with 15 employees or more, employers are required to comply with these additional regulations.
Overview:
- Creates protection against discrimination based on race, color, religion, sex, national origin in all employment practices, including hiring, firing, compensation, promotion.
- Prohibits hostile work environment tied to a protected class.
- Requires employers to provide a reasonable accommodation for religious practices.
Point of Confusion: With 40-50% of EEOC claims including charges of retaliation, the most frequently alleged basis of discrimination and the most common reason employers lose.
Tip: A comprehensive and authentic policy is key, including warnings with regard to and protections against retaliation.
Bonus: The Supreme Court’s decision on June 5, 2025 in Ames vs Ohio Department of Youth Services determines that all employment decisions cannot include any protected status as a factor, including gender, race, or other class. We expect that this decision will now open the door to a significant increase in types and number of claims.
Overview: Requires employers to define essential functions of the job for employment decisions and for candidates or employees with qualifying disabilities, and to make reasonable accommodation to allow these candidates or employees to perform their jobs.
Points of Confusion: The regulations require a particular sequence of documents and approvals that are not difficult, but they are very specific. There are essentially two factors to a reasonable accommodation: cost, making crushingly expensive accommodations would not be required., and the accommodation allows the employee’s ability to perform the essential functions of the job.
Tips: We recommend putting in common sense accommodations so that you’re prepared for common, reasonable requests.
Overview: Requirements related to pregnant workers, including prohibitions against discrimination, requiring pregnant workers to resign, or non-medical leave of absence.
Point of Confusion: Pregnant workers are not exempt from performing the essential functions of their job and are not inoculated against layoffs or other workplace actions.
Bonus: As of 2024, there’s an affirmative requirement to provide reasonable accommodation for pregnant workers.
Tip: Your best protection against a claim related to pregnancy is to have policies and processes in place that are consistently applied.
Overview: Employers are not permitted to request or require employees or employees’ family members to provide genetic information.
Overview: Employers must take reasonable measures to protect the personal information of your employees. All transmissions of employee personal data must be secure.
Point of Confusion: If an employee’s identity is breached based on your failure to protect it, there are significant risks so NEVER send or request social security numbers, personal identity documents or other confidential information via unencrypted email.
Tip: It’s easy to set up a portal or a drop box to move this information in a completely protected environment.
Overview: Prohibits age discrimination in employment, including the setting of mandatory retirement ages for employees over 40.
Tip: Follow all the same recommendations noted for Title 7 protected classes.
Overview: Requires all employers who offer medical benefits to groups over 20 employees to permit covered employees and or their dependents to extend their health insurance coverage after a eligible life event (such as divorce, employment termination, new dependent, etc.) for up to 36 months by paying the full premium.
Points of Confusion: Specific notices are required for new hires and departing or otherwise qualified employees, and they’re required within very specific deadlines. Many companies choose to outsource their COBRA administration to a third-party vendor because of the technical nature of the requirement, but it is possible to do it yourself.
Bonus: 44 of the 50 states plus the District of Columbia have COBRA laws which may have to apply even if you have fewer than 20 employees.
Overview: Requires employers to provide unpaid, job-protected leave to qualifying employees for qualified events.
Points of Confusion: Each situation requires analysis to know if the person and the reason qualifies, the length of the leave, documentation of the leave on very specific forms, and careful attention to ensure correct and consistent application of the regulation.
Tip: With hundreds of iterations it may be prudent to review your FMLA policy and process with a consultant to confirm compliance.
Overview: In addition to all of the notice regulations that apply to all employers, organizations with 50 or more employees also have the requirement to :
- provide health insurance coverage to employees who work 30 or more hours per week
- send annual reporting to employees regarding health care costs
Points of Confusion: The look-back period to meet the 30 hour threshhold is 6 to 12 months, depending on your policy. Also, at this level, stipends are not permitted.
Tip: Because of the technical nature of the reports, many employers choose to outsource this either to their payroll provider or to another third party.
Overview: Employers with at least 100 employees must give at least 60 days advanced notice of plant closings or layoffs under certain situations.
Bonus: 13 states have additional WARN requirements, which may need to be considered as well.
Overview: In addition to the regulations that apply to all employers, organizations with 100 or more employees OR federal contractors with 50 or more employees also have the requirement to file an annual EE01 report
Tip: This report requires extensive data tracking and most qualifying employers use their payroll system to create all the required fields.
Special Requirements for Federal Contractors
If you receive funds from the federal government, there are additional regulations that may apply depending on the amount and type of grant or contract. If you receive any federal government funds and especially if you’re subject to an audit of your contract or grant, you want to read the contract carefully to understand all of the labor related requirements.
Brief Overview of State and International Labor Law
Some jurisdictions have virtually no labor laws, while others have extensive regulation. Even some cities have passed their own labor laws. All of these may apply to you if you are a multi-jurisdiction employer.
If you have international work from anywhere policy, your organization is also subject to tax and labor law in the country in which you have workers. If you have international employees or U.S. employees working internationally, you need to talk to a consultant or a labor law attorney to protect your organization.
All U.S. companies are subject to what are called the nexus laws require that you know and follow state labor law for any state or the District of Columbia in which an employee spends 51% or more of their working time– regardless of the location of your organization’s headquarters or main office. If you are a multi-state employer we strongly recommend an audit of employee locations to ensure that you are compliant by location.
Conclusion
Compliance and risk mitigation may not be the top of mind for building a thriving organization. However, because of the complexity and variation of labor laws — and the cost of mistakes — it’s prudent for organizational leadership to check the compliance box early and often.
