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Federal Employment Law Basics for Small Businesses

Federal Employment Law Basics for Small Businesses

January 7, 2026

Federal Employment Law Basics for Small Businesses

Navigating federal employment laws can be complex, but understanding the key regulations and requirements is essential for your small business to avoid complaints, fines, lawsuits, and other headaches. Below, we provide an overview of some major federal employment laws along with practical guidance for employers to maintain compliance.

Fair Labor Standards Act (FLSA)

The FLSA is administered by the U.S. Department of Labor (DOL) and sets minimum wage, overtime pay, recordkeeping, and child labor requirements. The FLSA applies to practically all employers. Some general rules outlined in the FLSA include:

Minimum Wage: The federal minimum wage is $7.25 per hour. You may be required to pay a higher rate if your state or local government imposes a higher minimum wage. State minimum wage laws can be found on the DOL’s Wage and Hour Division website.

Overtime: Overtime pay is at least 1.5 times an employee’s regular rate-of-pay and applies to all hours worked over 40 in a single workweek.
Child Labor: Minors may not be employed in hazardous occupations, 16- and 17-year-olds may work unlimited hours in non-hazardous jobs, and 14- and 15-year-olds may work limited hours depending on their school schedule.

Employers must post the Employee Rights Under the Fair Labor Standards Act poster in the workplace where employees can see it.

For more in-depth information on the FLSA, visit NFIB’s Guide to Wage & Hour Laws.

Equal Pay Act

The Equal Pay Act prohibits employers from paying different wages or providing different benefits to men and women who perform the same job for the same employer. The law applies to all employers. Variances in pay and benefits is allowed as along as the employer can show that the difference is due to a legitimate reason.

Employers must post the Know Your Rights: Workplace Discrimination is Illegal poster in the workplace where employees can see it.

Providing Urgent Maternal Protections for Nursing Mothers Act (PUMP Act)

The PUMP Act is an amendment to the FLSA that offers protections for nursing mothers at work. It requires employers to provide reasonable, paid break time and a private space for employees to pump breast milk for one year after a child’s birth.

Pregnant Workers Fairness Act (PWFA)

The PWFA requires employers to provide reasonable accommodations for pregnant and breastfeeding employees upon request. The law protects employees with known limitations related to pregnancy, childbirth, or other associated medical conditions and applies to employers with 15 or more employees. Employers should not assume an employee needs an accommodation; instead, the employee must first communicate their limitations to their employer.

National Labor Relations Act (NLRA)

The NLRA gives private sector workers the right to advocate for different working conditions. The NLRA applies to most private sector employers, and it grants employees the right to form or attempt to form a union, join a union, assist a union in organizing coworkers, refuse to engage in union activity, receive fair representation by a union, and participate in coordinated actions to pursue collective bargaining or other shared workplace protections.

Federal contractors and subcontractors must post the Employee Rights Under the National Labor Relations Act poster in the workplace where employees can see it.

Title VII of the Civil Rights Act of 1964 (Title VII)

Title VII prohibits discrimination based on race, color, religion, sex, or national origin in hiring, employment, and termination, and applies to businesses with 15 or more employees. Employers found in violation of Title VII may be required to reinstate affected employees, provide back pay, compensate for future loss of earnings, emotional distress, and mental anguish caused by the discrimination, cover attorney fees, and in some cases, pay punitive damages.

Employers must post the Know Your Rights: Workplace Discrimination is Illegal poster in the workplace where employees can see it.

Americans with Disabilities Act (ADA)

The ADA prohibits employers with 15 or more employees from discriminating against a qualified person with disabilities. An individual is considered qualified for a job if they meet the educational, experience, or skill requirements of the job and can perform the essential functions of the job with or without reasonable accommodation. A reasonable accommodation must be provided for qualified employees or applicants with a disability. The exception to this rule is if the accommodation imposes an “undue hardship” for the business, meaning a significant difficulty or expense. Employers should not assume any added expense or difficulty will qualify as an undue hardship.

The ADA covers a wide range of disabilities, including visible and non-visible conditions. If in doubt, employers should err on the side of caution and treat an employee’s condition as a qualifying disability until they can consult with an attorney.

For in-depth information on navigating an ADA lawsuit, visit the NFIB Guide to Responding to ADA Lawsuits.

Family and Medical Leave Act (FMLA)

The FMLA requires covered employers to provide eligible employees with up to 12 weeks of unpaid, job-protected leave for a specific medical or family-related reason. The law applies to employers with 50 or more employees, and employees are eligible if they have worked for at least 12 months and logged at least 1,250 hours of service during the preceding 12-month period.

Qualifying reasons for FMLA leave include:

The birth of a child and to care for the newborn

The placement of a child with an employee through adoption or foster care and to care for the child
To care for a child, spouse, or parent with a serious health condition
A serious health condition that prevents the employee from working
An employee is the spouse, child, parent, or next of kin to a covered servicemember experiencing a serious injury or illness

Employers covered by the FMLA must post the Your Employee Rights Under the Family and Medical Leave Act poster in the workplace where employees can see it.

Occupational Safety and Health Act (OSH Act)

The OSH Act requires employers to provide employees with a safe and healthy workplace. The law authorizes the Occupational Safety and Health Administration (OSHA) to set workplace safety standards, conduct inspections, and require employers to maintain certain records and reports related to workplace injuries and illnesses. All employers are covered by the OSH Act, with the only exceptions being self-employed individuals and farms that employ only immediate family members.

Additionally, employers must keep records of certain work-related injuries and illnesses, including those that result in death, time away from work, restricted duties, medical treatment beyond first aid, loss of consciousness, or a significant diagnosed condition. Certain incidents must also be reported directly to OSHA. A work-related fatality must be reported within eight hours of the employer learning of it, provided the death occurs within 30 days of the workplace incident. Businesses with 10 or fewer employees or in certain low-hazard industries do not need to keep injury and illness records, unless OSHA requests in writing that they do so or the state requires them to.

Employers must post the Job Safety and Health: It’s the Law poster in the workplace where employees can see it.

For detailed guidance on how to handle an OSHA inspection, visit NFIB’s Guide to OSHA Inspections.

 


 

For more detailed information and guidance on federal employment law, visit the recently updated NFIB Guide to Federal Employment Law.

For additional questions regarding federal employment law, contact NFIB’s Legal Center for help at info@nfib.org.

 

Updated January 7, 2026

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