By: Gregg Zeff
On: November 30, 2022
Running a small business is complicated, but it can be even more complicated trying to stay compliant with all of the laws out there that regulate small businesses. This article gives a brief glimpse into the laws that regulate small businesses. If you have questions, do not hesitate to reach out to the small business employment law attorneys at Zeff Law Firm for more guidance.
What is Considered a Small Business?
There are many ways to define small businesses, but in the eyes of the law, small business is usually defined by either the number of employees working at that company, or the amount of revenue generated by that entity. Generally speaking, the US Small Business Administration (SBA) defines a small business as a company that employs fewer than 1,500 individuals and has an annual revenue of $41.5 million or less. However, there are other considerations that come into play when the SBA evaluates whether a company qualifies as a small business. Such factors may include the location of the business, the business structure, the ownership identity of the business, and whether it is a non-profit or for-profit organization.
How do Major Employment Laws Apply to Small Businesses?
There are dozens of employment laws that affect small businesses, but below is a short list of some of the most important ones that small businesses should try to adhere to:
- Fair Labor Standards Act: Small businesses may be subject to the FLSA if they make $500,000 or more in total annual sales or are engaged in interstate commerce. If applicable, the FLSA sets the national minimum wage, requires overtime pay for covered employees, and regulates employment of individuals under the age of 18. Qualifying small businesses will need to adhere to standards or face civil penalties.
- National Labor Relations Act: The NLRA applies to most businesses in the private sector, including small businesses, though there are some important exceptions for certain types of employees. In short, the NLRA makes it illegal for employers to utilize coercive tactics to influence employees regarding the formation and operation of unions, and also prohibits unfair labor practices by both unions and employers alike. Finally, the NLRA sets the terms by which unions and employers negotiate, in a process called collective bargaining.
- Occupational Health and Safety Act: Under this law, employers must maintain a safe workplace and prevent recognized occupational hazards that could cause death or serious harm to employees. Most businesses are required to adhere to OSHA’s regulations, including small businesses. OSHA requires employers to report accidents, post information about employee rights, and record compliance efforts.
- FMLA: Some, but not all small businesses are subject to the Family Medical Leave Act. Small businesses must adhere to FMLA if they have more than 50 employees, and if so, they must provide eligible employees with unpaid, job-protected leave for specified family and medical reasons.
- Equal Pay Act/Minimum Wage: The Equal Pay Act applies to all businesses engaged in interstate commerce or if the business earns over $500,000 in gross sales annually. In short, the Equal Pay Act requires employers to pay employees the same salary for essentially the same work, regardless of gender. Variances in wages are only permitted if there are differences in the employees’ quality of work, seniority, or any other non-gender-related quality.
Do Discrimination Laws Apply to Small Businesses, Regardless of Size?
In short, usually. All businesses with at least fifteen employees (in some states, this number is lower) are required to adhere to nondiscriminatory practices regardless of the amount of annual revenue, or whether the business is a non-profit or for-profit organization. This means that almost all businesses cannot make decisions about hiring, firing, promoting, or any disciplinary actions based on the employees’ or potential employees’ race, gender, age, or disability. Put differently, regardless of the size of your business, if you have fifteen employees or enough employees under state law you must make employee-related decisions based on the employees’ merit and not by arbitrary characteristics that do not affect a person’s work product. It is also important to note that every state also has some form of anti-discrimination in the workplace statutes. These statutes are typically more strict or specific about regulating discrimination in the workplace and may have additional requirements for a company to stay in compliance. Therefore, it may be useful to consult an employment law attorney to ensure that your business and its policies comply with every applicable law.
Contact Zeff Law Firm if you have questions about Small Business Employment Law
Zeff Law Firm has extensive experience advising small businesses on the appropriate policies and practices to implement in order to comply with the various employment law statutes that affect businesses in the Philadelphia area. Our firm understands that while following the law is certainly a priority for most small businesses, navigating the legal intricacies of employment law can be complicated. We are here to help. We can review your business practices and help educate you on how to fulfill your legal obligations as a small business. We can also provide advice on how to stay compliant with each of these laws. Contact us today to schedule a consultation and to learn more about how we help small businesses every day.