Hire and manage employees
Establish a basic payroll structure to help you hire employees. Then, manage employees properly with a general understanding of state and federal labor laws.
- Hire and pay employees
- Employees and independent contractors
- Plan to offer employee benefits
- Follow federal and state labor laws
Hire and pay employees
Before finding the right person for the job, you’ll need to create a plan for paying employees. Follow these steps to set up payroll:
- Get an Employer Identification Number (EIN)
- Find out whether you need state or local tax IDs
- Decide if you want an independent contractor or an employee
- Ensure new employees return a completed W-4 form
- Schedule pay periods to coordinate tax withholding for IRS
- Create a compensation plan for holiday, vacation and leave
- Choose an in-house or external service for administering payroll
- Decide who will manage your payroll system
- Know which records must stay on file and for how long
- Report payroll taxes as needed on quarterly and annual basis
The IRS maintains the Employer’s Tax Guide, which provides guidance on all federal tax filing requirements that could apply to the obligations for your small business. Check with your state tax agency for employer filing stipulations.
Employees and independent contractors
Distinguishing between employees and independent contractors can impact your bottom line, as this affects how you withhold taxes and avoid costly legal consequences. Learn the differences before hiring your first employee.
An independent contractor operates under a separate business name from your company and invoices for work completed. Independent contractors can sometimes qualify as employees in a legal sense. The Equal Employment Opportunity Commission created a guide for making the determination.
If your contractor is discovered to meet the legal definition of employee, you may need to pay back taxes and penalties, provide benefits, and reimburse for wages stipulated under the Fair Labor Standards Act.
Handy Reference Guide to the Fair Labor Standards Act
On This Page
- Basic Wage Standards
- Who is Covered?
- Tipped Employees
- Employer-Furnished Facilities
- Industrial Homework
- Subminimum Wage Provisions
- Youth Minimum Wage
- Child Labor Provisions
- Nonagricultural Jobs (Child Labor)
- Farm Jobs (Child Labor)
- Nursing Mothers
- Terms Used in FLSA
- Computing Overtime Pay
- Retaliation is Prohibited
- Other Labor Laws
- Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)
- Equal Pay Provisions
(For best printout, see the PDF version.)
Revised September 2016
The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments.
The Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) administers and enforces the FLSA with respect to private employment, State and local government employment, and Federal employees of the Library of Congress, U.S. Postal Service, Postal Rate Commission, and the Tennessee Valley Authority. The FLSA is enforced by the U.S. Office of Personnel Management for employees of other Executive Branch agencies, and by the U.S. Congress for covered employees of the Legislative Branch.
Special rules apply to State and local government employment involving fire protection and law enforcement activities, volunteer services, and compensatory time off instead of cash overtime pay.
Covered, nonexempt workers are entitled to a minimum wage of $7.25 per hour effective July 24, 2009. Special provisions apply to workers in American Samoa and the Commonwealth of the Northern Mariana Islands. Nonexempt workers must be paid overtime pay at a rate of not less than one and one-half times their regular rates of pay after 40 hours of work in a workweek.
Wages required by the FLSA are due on the regular payday for the pay period covered. Deductions made from wages for such items as cash or merchandise shortages, employer-required uniforms, and tools of the trade, are not legal to the extent that they reduce the wages of employees below the minimum rate required by the FLSA or reduce the amount of overtime pay due under the FLSA.
The FLSA contains some exemptions from these basic standards. Some apply to specific types of businesses; others apply to specific kinds of work.
While the FLSA does set basic minimum wage and overtime pay standards and regulates the employment of minors, there are a number of employment practices which the FLSA does not regulate.
For example, the FLSA does not require:
- vacation, holiday, severance, or sick pay;
- meal or rest periods, holidays off, or vacations;
- premium pay for weekend or holiday work;
- pay raises or fringe benefits; or
- a discharge notice, reason for discharge, or immediate payment of final wages to terminated employees.
The FLSA does not provide wage payment or collection procedures for an employee’s usual or promised wages or commissions in excess of those required by the FLSA. However, some States do have laws under which such claims (sometimes including fringe benefits) may be filed.
Also, the FLSA does not limit the number of hours in a day or days in a week an employee may be required or scheduled to work, including overtime hours, if the employee is at least 16 years old.
The above matters are for agreement between the employer and the employees or their authorized representatives.
All employees of certain enterprises having workers engaged in interstate commerce, producing goods for interstate commerce, or handling, selling, or otherwise working on goods or materials that have been moved in or produced for such commerce by any person, are covered by the FLSA.
A covered enterprise is the related activities performed through unified operation or common control by any person or persons for a common business purpose and —
- whose annual gross volume of sales made or business done is not less than $500,000 (exclusive of excise taxes at the retail level that are separately stated); or
- is engaged in the operation of a hospital, an institution primarily engaged in the care of the sick, the aged, or the mentally ill who reside on the premises; a school for mentally or physically disabled or gifted children; a preschool, an elementary or secondary school, or an institution of higher education (whether operated for profit or not for profit); or
- is an activity of a public agency.
Any enterprise that was covered by the FLSA on March 31, 1990, and that ceased to be covered because of the revised $500,000 test, continues to be subject to the overtime pay, child labor and recordkeeping provisions of the FLSA.
Employees of firms which are not covered enterprises under the FLSA still may be subject to its minimum wage, overtime pay, recordkeeping, and child labor provisions if they are individually engaged in interstate commerce or in the production of goods for interstate commerce, or in any closely-related process or occupation directly essential to such production. Such employees include those who: work in communications or transportation; regularly use the mails, telephones, or telegraph for interstate communication, or keep records of interstate transactions; handle, ship, or receive goods moving in interstate commerce; regularly cross State lines in the course of employment; or work for independent employers who contract to do clerical, custodial, maintenance, or other work for firms engaged in interstate commerce or in the production of goods for interstate commerce.
Domestic service workers such as day workers, housekeepers, chauffeurs, cooks, or full-time babysitters are covered if:
- their cash wages from one employer in calendar year 2010 are at least $1,700 (this calendar year threshold is adjusted by the Social Security Administration each year); or
- they work a total of more than 8 hours a week for one or more employers.
Tipped employees are individuals engaged in occupations in which they customarily and regularly receive more than $30 a month in tips. The employer may consider tips as part of wages, but the employer must pay at least $2.13 an hour in direct wages.
The employer who elects to use the tip credit provision must inform the employee in advance and must be able to show that the employee receives at least the applicable minimum wage (see above) when direct wages and the tip credit allowance are combined. If an employee’s tips combined with the employer’s direct wages of at least $2.13 an hour do not equal the minimum hourly wage, the employer must make up the difference. Also, employees must retain all of their tips, except to the extent that they participate in a valid tip pooling or sharing arrangement.
The reasonable cost or fair value of board, lodging, or other facilities customarily furnished by the employer for the employee’s benefit may be considered part of wages.
The performance of certain types of work in an employee’s home is prohibited under the law unless the employer has obtained prior certification from DOL. Restrictions apply in the manufacture of knitted outerwear, gloves and mittens, buttons and buckles, handkerchiefs, embroideries, and jewelry (where safety and health hazards are not involved). The manufacture of women’s apparel (and jewelry under hazardous conditions) is generally prohibited. If you have questions on whether a certain type of work is restricted, or who is eligible for a homework certificate, or how to obtain a certificate, you may contact the local WHD office.
Subminimum Wage Provisions
The FLSA provides for the employment of certain individuals at wage rates below the statutory minimum. Such individuals include student-learners (vocational education students), as well as full-time students in retail or service establishments, agriculture, or institutions of higher education. Also included are individuals whose earning or productive capacity is impaired by a physical or mental disability, including those related to age or injury, for the work to be performed. Employment at less than the minimum wage is authorized to prevent curtailment of opportunities for employment. Such employment is permitted only under certificates issued by WHD.
A minimum wage of not less than $4.25 an hour is permitted for employees under 20 years of age during their first 90 consecutive calendar days of employment with an employer. Employers are prohi-bited from taking any action to displace employees in order to hire employees at the youth minimum wage. Also prohibited are partial displacements such as reducing employees’ hours, wages, or employment benefits.
Some employees are exempt from the overtime pay provisions or both the minimum wage and overtime pay provisions.
Because exemptions are generally narrowly defined under the FLSA, an employer should carefully check the exact terms and conditions for each. Detailed information is available from local WHD offices.
Following are examples of exemptions which are illustrative, but not all-inclusive. These examples do not define the conditions for each exemption.
Exemptions from Both Minimum Wage and Overtime Pay
- Executive, administrative, and professional employees (including teachers and academic administrative personnel in elementary and secondary schools), outside sales employees, and employees in certain computer-related occupations (as defined in DOL regulations);
- Employees of certain seasonal amusement or recreational establishments, employees of certain small newspapers, seamen employed on foreign vessels, employees engaged in fishing operations, and employees engaged in newspaper delivery;
- Farmworkers employed by anyone who used no more than 500 “man-days” of farm labor in any calendar quarter of the preceding calendar year;
- Casual babysitters and persons employed as companions to the elderly or infirm.
Exemptions from Overtime Pay Only
- Certain commissioned employees of retail or service establishments; auto, truck, trailer, farm implement, boat, or aircraft sales-workers; or parts-clerks and mechanics servicing autos, trucks, or farm implements, who are employed by non-manufacturing establishments primarily engaged in selling these items to ultimate purchasers;
- Employees of railroads and air carriers, taxi drivers, certain employees of motor carriers, seamen on American vessels, and local delivery employees paid on approved trip rate plans;
- Announcers, news editors, and chief engineers of certain non-metropolitan broadcasting stations;
- Domestic service workers living in the employer’s residence;
- Employees of motion picture theaters; and
Partial Exemptions from Overtime Pay
- Partial overtime pay exemptions apply to employees engaged in certain operations on agricultural commodities and to employees of certain bulk petroleum distributors.
- Hospitals and residential care establishments may adopt, by agreement with their employees, a 14-day work period instead of the usual 7-day workweek if the employees are paid at least time and one-half their regular rates for hours worked over 8 in a day or 80 in a 14-day work period, whichever is the greater number of overtime hours.
- Employees who lack a high school diploma, or who have not attained the educational level of the 8th grade, can be required to spend up to 10 hours in a workweek engaged in remedial reading or training in other basic skills without receiving time and one-half overtime pay for these hours. However, the employees must receive their normal wages for hours spent in such training and the training must not be job specific.
- Public agency fire departments and police departments may establish a work period ranging from 7 to 28 days in which overtime need only be paid after a specified number of hours in each work period.
The FLSA child labor provisions are designed to protect the educational opportunities of minors and prohibit their employment in jobs and under conditions detrimental to their health or well-being. The provisions include restrictions on hours of work for minors under 16 and lists of hazardous occupations orders for both farm and non-farm jobs declared by the Secretary of Labor to be too dangerous for minors to perform. Further information on prohibited occupations is available from https://www.youthrules.dol.gov.
Regulations governing child labor in non-farm jobs differ somewhat from those pertaining to agricultural employment. In non-farm work, the permissible jobs and hours of work, by age, are as follows:
- Youths 18 years or older may perform any job, whether hazardous or not, for unlimited hours;
- Minors 16 and 17 years old may perform any nonhazardous job, for unlimited hours; and
- Minors 14 and 15 years old may work outside school hours in various nonmanufacturing, nonmining, nonhazardous jobs under the following conditions: no more than 3 hours on a school day, 18 hours in a school week, 8 hours on a non-school day, or 40 hours in a non-school week. Also, work may not begin before 7 a.m., nor end after 7 p.m., except from June 1 through Labor Day, when evening hours are extended to 9 p.m. Under a special provision, youths 14 and 15 years old enrolled in an approved Work Experience and Career Exploration Program (WECEP) may be employed for up to 23 hours in school weeks and 3 hours on school days (including during school hours). In addition, academically oriented youths enrolled in an approved Work-Study Program (WSP) may be employed during school hours.
Fourteen is the minimum age for most non-farm work. However, at any age, minors may deliver newspapers; perform in radio, television, movie, or theatrical productions; work for parents in their solely-owned non-farm business (except in mining, manufacturing or on hazardous jobs); or gather evergreens and make evergreen wreaths.
In farm work, permissible jobs and hours of work, by age, are as follows:
- Minors 16 years and older may perform any job, whether hazardous or not, for unlimited hours;
- Minors 14 and 15 years old may perform any nonhazardous farm job outside of school hours;
- Minors 12 and 13 years old may work outside of school hours in nonhazardous jobs, either with a parent’s written consent or on the same farm as the parent(s);
- Minors under 12 years old may perform jobs on farms owned or operated by parent(s), or with a parent’s written consent, outside of school hours in nonhazardous jobs on farms not covered by minimum wage requirements.
Minors of any age may be employed by their parents in any occupation on a farm owned or operated by their parents.
The FLSA requires employers to keep records on wages, hours, and other items, as specified in DOL recordkeeping regulations. Most of the information is of the kind generally maintained by employers in ordinary business practice and in compliance with other laws and regulations. The records do not have to be kept in any particular form and time clocks need not be used. With respect to an employee subject to the minimum wage provisions or both the minimum wage and overtime pay provisions, the following records must be kept:
- personal information, including employee’s name, home address, occupation, sex, and birth date if under 19 years of age;
- hour and day when workweek begins;
- total hours worked each workday and each workweek;
- total daily or weekly straight-time earnings;
- regular hourly pay rate for any week when overtime is worked;
- total overtime pay for the workweek;
- deductions from or additions to wages;
- total wages paid each pay period; and
- date of payment and pay period covered.
Records required for exempt employees differ from those for nonexempt workers. Special information is required for homeworkers, for employees working under uncommon pay arrangements, for employees to whom lodging or other facilities are furnished, and for employees receiving remedial education.
The Patient Protection and Affordable Care Act (“PPACA”), signed into law on March 23, 2010 (P.L. 111-148), amended Section 7 of the FLSA, to provide a break time requirement for nursing mothers.
Employers are required to provide reasonable break time for an employee to express breast milk for her nursing child for one year after the child’s birth each time such employee has need to express the milk. Employers are also required to provide a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public, which may be used by an employee to express breast milk.
The FLSA requirement of break time for nursing mothers to express breast milk does not preempt State laws that provide greater protections to employees (for example, providing compensated break time, providing break time for exempt employees, or providing break time beyond 1 year after the child’s birth).
Employers are required to provide a reasonable amount of break time to express milk as frequently as needed by the nursing mother. The frequency of breaks needed to express milk as well as the duration of each break will likely vary.
A bathroom, even if private, is not a permissible location under the Act. The location provided must be functional as a space for expressing breast milk. If the space is not dedicated to the nursing mother’s use, it must be available when needed in order to meet the statutory requirement. A space temporarily created or converted into a space for expressing milk or made available when needed by the nursing mother is sufficient provided that the space is shielded from view, and free from any intrusion from co-workers and the public.
Only employees who are not exempt from the FLSA’s overtime pay requirements are entitled to breaks to express milk. While employers are not required under the FLSA to provide breaks to nursing mothers who are exempt from the overtime pay requirements of Section 7, they may be obligated to provide such breaks under State laws.
Employers with fewer than 50 employees are not subject to the FLSA break time requirement if compliance with the provision would impose an undue hardship. Whether compliance would be an undue hardship is determined by looking at the difficulty or expense of compliance for a specific employer in comparison to the size, financial resources, nature, and structure of the employer’s business. All employees who work for the covered employer, regardless of work site, are counted when determining whether this exemption may apply.
Employers are not required under the FLSA to compensate nursing mothers for breaks taken for the purpose of expressing milk. However, where employers already provide compensated breaks, an employee who uses that break time to express milk must be compensated in the same way that other employees are compensated for break time. In addition, the FLSA’s general requirement that the employee must be completely relieved from duty or else the time must be compensated as work time applies.
Workweek – A workweek is a period of 168 hours during 7 consecutive 24-hour periods. It may begin on any day of the week and at any hour of the day established by the employer. Generally, for purposes of minimum wage and overtime payment, each workweek stands alone; there can be no averaging of 2 or more workweeks. Employee coverage, compliance with wage payment requirements, and the application of most exemptions are determined on a workweek basis.
Hours Worked – Covered employees must be paid for all hours worked in a workweek. In general, “hours worked” includes all time an employee must be on duty, or on the employer’s premises or at any other prescribed place of work, from the beginning of the first principal activity of the work day to the end of the last principal work activity of the workday. Also included is any additional time the employee is allowed (i.e., suffered or permitted) to work.
Overtime must be paid at a rate of at least one and one-half times the employee’s regular rate of pay for each hour worked in a workweek in excess of the maximum allowable in a given type of employment. Generally, the regular rate includes all payments made by the employer to or on behalf of the employee (except for certain statutory exclusions). The following examples are based on a maximum 40-hour workweek applicable to most covered nonexempt employees.
Hourly rate (regular pay rate for an employee paid by the hour) – If more than 40 hours are worked, at least one and one-half times the regular rate for each hour over 40 is due.
Example: An employee paid $8.00 an hour works 44 hours in a workweek. The employee is entitled to at least one and one-half times $8.00, or $12.00, for each hour over 40. Pay for the week would be $320 for the first 40 hours, plus $48.00 for the four hours of overtime – a total of $368.00.
Piece rate – The regular rate of pay for an employee paid on a piecework basis is obtained by dividing the total weekly earnings by the total number of hours worked in that week. The employee is entitled to an additional one-half times this regular rate for each hour over 40, plus the full piecework earnings.
Example: An employee paid on a piecework basis works 45 hours in a week and earns $405. The regular rate of pay for that week is $405 divided by 45, or $9.00 an hour. In addition to the straight-time pay, the employee is also entitled to $4.50 (half the regular rate) for each hour over 40 – an additional $22.50 for the 5 overtime hours – for a total of $427.50.
Another way to compensate pieceworkers for overtime, if agreed to before the work is performed, is to pay one and one-half times the piece rate for each piece produced during the overtime hours. The piece rate must be the one actually paid during nonovertime hours and must be enough to yield at least the minimum wage per hour.
Salary – The regular rate for an employee paid a salary for a regular or specified number of hours a week is obtained by dividing the salary by the number of hours for which the salary is intended to compensate. The employee is entitled to an additional one-half times this regular rate for each hour over 40, plus the salary.
If, under the employment agreement, a salary sufficient to meet the minimum wage requirement in every workweek is paid as straight time for whatever number of hours are worked in a workweek, the regular rate is obtained by dividing the salary by the number of hours worked each week. To illustrate, suppose an employee’s hours of work vary each week and the agreement with the employer is that the employee will be paid $480 a week for whatever number of hours of work are required. Under this agreement, the regular rate will vary in overtime weeks. If the employee works 50 hours, the regular rate is $9.60 ($480 divided by 50 hours). In addition to the salary, half the regular rate, or $4.80, is due for each of the 10 overtime hours, for a total of $528 for the week. If the employee works 60 hours, the regular rate is $8.00 ($480 divided by 60 hours). In that case, an additional $4.00 is due for each of the 20 overtime hours for a total of $560 for the week.
In no case may the regular rate be less than the minimum wage required by the FLSA.
If a salary is paid on other than a weekly basis, the weekly pay must be determined in order to compute the regular rate and overtime pay. If the salary is for a half month, it must be multiplied by 24 and the product divided by 52 weeks to get the weekly equivalent. A monthly salary should be multiplied by 12 and the product divided by 52.Enforcement Through Investigation
WHD enforcement of the FLSA is carried out by investigators stationed across the country. As WHD authorized representatives, they conduct investigations and gather data on wages, hours, and other employment conditions in order to determine compliance with the law regardless of workers’ immigration status. Where violations are found, they will recommend changes in employment practices to bring an employer into compliance.
Enforcement Through Legal Remedies
The FLSA allows the Department of Labor (“Department”) or an employee to recover back wages and an equal amount in liquidated damages where minimum wage and overtime violations exist. Generally, a 2-year statute of limitations applies to the recovery of back wages and liquidated damages. A 3-year statute of limitations applies in cases involving willful violations.
Remedies may be recovered through administrative procedures, litigation, and/or criminal prosecution.
- The Department is authorized to supervise the payment of unpaid minimum wages and/ or unpaid overtime compensation owed to any employee(s).
- In lieu of litigation, the Department may seek back wages and liquidated damages, through settlements with employers.
- Civil money penalties may be assessed for child labor violations and for repeat and/or willful violations of FLSA minimum wage or overtime requirements.
- Employers who willfully or repeatedly violate minimum wage or overtime pay requirements are subject to civil money penalties for each violation.
- Employers who violate the child labor provisions of the FLSA may be subject to civil money penalties. These penalties may be increased for each violation that results in the death or serious injury of an employee who is a minor, and may be doubled if the violation was determined to be willful or repeated.
- For current penalty amounts, see https://www.dol.gov/whd/flsa/index.htm#cmp.
- The Department may file suit on behalf of employees for back wages, an equal amount in liquidated damages, and civil money penalties where appropriate.
- The Department may seek a U.S. District Court injunction to restrain violations of the law, including the unlawful withholding of proper minimum wage and overtime pay, failure to keep proper records, and retaliation against employees who file complaints and/or cooperate with the Department.
- The Department may seek an order for payment of civil money penalties from a U.S. Department of Labor Administrative Law Judge where appropriate.
- An employee may file a private suit to recover back wages, an equal amount in liquidated damages, plus attorney’s fees and court costs. In such a case, the Department will not seek the same back wages and liquidated damages on that employee’s behalf.
- The FLSA provides that DOL may seek a U.S. District Court order to prevent the shipment of the affected goods.
- Employers who have willfully violated the law may be subject to criminal penalties, including fines and imprisonment.
Employees who have filed complaints or provided information cannot be discriminated against or discharged on account of such activity. If adverse action is taken against an employee for engaging in protected activity, the affected employee or the Secretary of Labor may file suit for relief, including reinstatement to his/her job, payment of lost wages, and damages.
In addition to the FLSA, WHD enforces and administers a number of other labor laws. Among these are:
- the Davis-Bacon and Related Acts, which require payment of prevailing wage rates and fringe benefits on federally-financed or assisted construction;
- the Walsh-Healey Public Contracts Act, which requires payment of minimum wage rates and overtime pay on contracts to provide goods to the Federal Government;
- the Service Contract Act, which requires payment of prevailing wage rates and fringe benefits on contracts to provide services to the Federal Government;
- the Contract Work Hours and Safety Standards Act, which sets overtime standards for service and construction contracts;
- the Migrant and Seasonal Agricultural Worker Protection Act, which protects farm workers by imposing certain requirements on agricultural employers and associations and requires the registration of crewleaders who must also provide the same worker protections;
- the Wage Garnishment Law, which limits the amount of an individual’s income that may be legally garnished and prohibits firing an employee whose pay is garnished for payment of a single debt;
- the Employee Polygraph Protection Act, which prohibits most private employers from using any type of lie detector test either for pre-employment screening of job applicants or for testing current employees during the course of employment;
- the Family and Medical Leave Act, which entitles eligible employees of covered employers to take up to 12 weeks of unpaid job-protected leave each year, with maintenance of group health insurance, for the birth and care of a child, for the placement of a child for adoption or foster care, for the care of a child, spouse, or parent with a serious health condition, or for the employee’s serious health condition; and
- the Immigration and Nationality Act, as amended, which:
- under the H-2A provisions, provides for the enforcement of contractual obligations of job offers which have been certified to by employers of temporary alien nonimmigrant agricultural workers;
- under the H-2B provisions, provides for the enforcement of employment conditions in the application for alien nonimmigrants in temporary, non-agricultural jobs;
- under the H-1C provisions, provides for the enforcement of employment conditions attested to by employers in disadvantaged areas employing H-1C temporary alien nonimmigrant registered nurses;
- under the D-1 provisions, provides for the enforcement of employment conditions attested to by employers seeking to employ alien crewmembers to perform specified longshore activity at U.S. ports; and
- under the H-1B provisions, provides for the enforcement of labor condition applications filed by employers wishing to employ aliens in specialty occupations and as fashion models of distinguished merit and ability.
More detailed information on the FLSA and other laws administered by WHD is available by calling our toll-free help line 1-866-4US-WAGE (1-866-487-9243). For those who have access to the Internet, further information may also be obtained on WHD’s Internet Home Page which can be located at the following address: www.wagehour.dol.gov.
In accordance with the provisions of the SBREFA, the Small Business Administration established a National Small Business and Agriculture Regulatory Ombudsman and 10 Regional Fairness Boards to receive comments from small entities about federal agency enforcement actions. The Ombudsman annually evaluates enforcement activities and rates each agency’s responsiveness to small entities. Small entities wishing to comment on WHD enforcement activities may call 1-888-REG-FAIR (1-888-734-3247), or write the Office of the National Ombudsman, U.S. Small Business Administration, 409 3rd Street, SW, MC2120, Washington, DC 20416-0005, or visit the Ombudsman’s internet website, www.sba.gov/ombudsman/.
The right to file a comment with the Ombudsman is in addition to any other rights a small entity may have, including the right to contest the assessment of a civil money penalty. Filing a comment with the Ombudsman neither extends the maximum time period for contesting the assessment of a penalty, nor takes the place of filing the response required to secure an administrative hearing on a penalty. WHD does not consider filing of a comment with the Ombudsman as a factor in determining how to resolve issues raised during a compliance action.
The equal pay provisions of the FLSA prohibit sex-based wage differentials between men and women employed in the same establishment who perform jobs that require equal skill, effort, and responsibility and which are performed under similar working conditions. These provisions, as well as other statutes prohibiting discrimination in employment, are enforced by the Equal Employment Opportunity Commission. More detailed information is available by calling 1-800-669-4000 or visiting www.eeoc.gov.
Plan to offer employee benefits
Healthcare and other benefits play a significant role in hiring and retaining employees. Some employee benefits are required by law, but others are optional.
Required employee benefits
- Social Security taxes: Employers must pay Social Security taxes at the same rate as their employees
- Workers’ Compensation: Required through a commercial carrier, self-insured basis, or state Workers’ Compensation Program
- Disability Insurance: Disability pay is required in California, Hawaii, New Jersey, New York, Rhode Island and Puerto Rico
- Leave benefits: Most leave benefits are optional outside those stipulated in the Family and Medical Leave Act (FMLA)
- Unemployment insurance: Varies by state, and you may need to register with your state workforce agency
Workers’ Compensation Commission
1428 Lakeland Drive
P. O. Box 5300
Jackson, MS 39296-5300
(601) 987-4200 or 1-866-473-6922
The FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. Eligible employees are entitled to:
- Twelve workweeks of leave in a 12-month period for:
- the birth of a child and to care for the newborn child within one year of birth;
- the placement with the employee of a child for adoption or foster care and to care for the newly placed child within one year of placement;
- to care for the employee’s spouse, child, or parent who has a serious health condition;
- a serious health condition that makes the employee unable to perform the essential functions of his or her job;
- any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty;” or
- Twenty-six workweeks of leave during a single 12-month period to care for a covered servicemember with a serious injury or illness if the eligible employee is the servicemember’s spouse, son, daughter, parent, or next of kin (military caregiver leave).
Your small businesses can offer a complete range of optional benefits to help attract and retain employees. Even if a benefit you offer is optional, it might still have to comply with certain laws if you choose to offer it.
Businesses that offer group health plans must comply with federal laws, for which the Department of Labor hosts a guide.
Employees can expand coverage through the Affordable Care Act and some may qualify for benefits via the Consolidated Omnibus Budget Reconciliation Act (COBRA). Businesses must extend the option of COBRA benefits to employees who are terminated or laid off.
Retirement plans are a very popular employee benefit. Consider offering an employer-sponsored plan like a 401k or a pension plan. The federal government offers a wide range of resources to aid small business owners in choosing their retirement plan and pension.
Employee incentive programs
Employee incentive programs can boost morale and create more draw for open positions: Common incentives such as stock options, flex time, wellness programs, corporate memberships and company events.
Consider benefits administration software if your budget allows. It can make your accounting easier and more efficient. Detailing these benefits in the employee handbook helps your staff make decisions, and they can use it as a reference for workplace requirements.
Follow federal and state labor laws
Protect workers’ rights and your business by adhering to labor laws, which means you must ensure that business practices align with industry regulations.
This includes learning applicable laws for hiring veterans, foreign workers, household employees, child labor and people with disabilities, among others groups. You must also comply when terminating an employee, laying off workers, or downsizing the company.
The goal of the Mississippi Department of Employment Security is to help Mississippians get jobs. Through our network of WIN Job Centers, MDES matches qualified, prospective employees with employers.
Also at the Job Centers, Mississippians can obtain job training to sharpen their work skills and make themselves more competitive in the job market.
In addition, MDES administers the unemployment benefits program that provides payments to Mississippians who have lost their jobs through no fault of their own. This temporary compensation enables unemployed individuals to concentrate on securing new jobs.
Through these programs, MDES works to expand employment, improve workforce skills, and enhance productivity in our state.
Helping Mississippians Get Jobs