Get an overview of the Federal labor laws small businesses should know when hiring, and updates on federal employment laws that could impact your business.
The federal minimum wage is $7.25 per hour.
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The federal minimum salary requirement is $684 per week ($35,568 annually), which applies to many people working salaried white-collar jobs. This rate applies to the executive, administrative, and professional exemptions. Other exemptions, like the computer science exemption, have different requirements. If state law specifies a higher exempt salary minimum, the state requirement supersedes the federal requirement.
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Federal regulations don’t require employers to provide their employees with meal or rest breaks. Per federal law, offering meal and rest breaks is voluntary absent a binding agreement or contract. If an employer offers an employee a rest break, generally 20 minutes or less, the employee must be paid during the break. Employers aren’t required to pay employees during meal breaks, generally 30 minutes or more. Employers operating in states with meal and rest break regulations, should follow state meal and rest break requirements.
References: Meal & Rest Break Requirements
Under the PUMP for Nursing Mothers Act, employers must provide employees with reasonable break time for employees to pump breast milk up to one year after giving birth. Employers must provide a reasonably private space, other than a bathroom, for employees to pump.
References: FLSA Protections to Pump at Work
Keep up to date with important changes to federal employment laws and requirements.
December 2024 brought significant uncertainty regarding Beneficial Ownership Information (BOI) requirements under the Corporate Transparency Act of 2019 (CTA). The CTA requires certain companies to disclose individuals who exercise substantial control over their business. These individuals, referred to as “beneficial” owners, must be disclosed if they (1) exercise substantial control over a company, (2) own 25% or more of the interest in a company, or (3) receive substantial economic benefits from a company’s assets. On December 31, the federal government petitioned the Supreme Court of the United States (SCOTUS) to lift the preliminary injunction blocking CTA enforcement, with Justice Alito directing the plaintiffs in the Texas Top Cop Shop, Inc. case to respond by January 10, 2025. If the nationwide injunction is lifted, reporting companies may face a tight deadline to complete their BOI filings and avoid significant penalties. While BOI filing is not currently mandatory, FinCEN continues to accept voluntary filings from companies wishing to submit reports proactively. Approximately 32 million companies are expected to be impacted by the new BOI reporting requirements. Employers can take this interactive quiz to determine whether their business is subject to the reporting requirements here.
On December 3, 2024, a federal judge issued a nationwide injunction blocking the enforcement of the Corporate Transparency Act (CTA) and its beneficial ownership reporting requirements. This ruling affects all 32 million reporting companies nationwide, including those facing a January 1, 2025, deadline. Although the Department of Treasury filed an appeal on December 5, 2024, FinCEN confirmed it will comply with the order while it is in effect, meaning companies are not currently required to file and won’t face penalties for not doing so. Reporting companies can still choose to voluntarily submit their beneficial ownership reports. Employers can read the full court order here.
Over the past three years, Justworks has helped eligible small businesses on our platform file ERTC claims with the IRS. While we’ve seen close to $300 million in ERTC relief disbursed successfully, we have nearly 1,000 customers still awaiting funds totaling about $145 million.
To overcome these delays, we recently traveled to Washington, D.C. with seven of our customers to meet with lawmakers. In these meetings, small business leaders took center stage and shared their stories, emphasizing how the continued delays in receiving the ERTC funds owed to them were impacting their ability to plan for the future, survive, and compete. We're now working closely with some of these lawmakers' offices to ensure the IRS processes the remaining ERTC claims for Justworks customers.
We’re optimistic about the impact of our recent meetings and the path ahead. Just recently, the IRS announced that it is accelerating work on ERTC claims and is currently processing 400,000 backlogged claims worth about $10 billion.
If you want to get involved in future Justworks advocacy efforts on small business issues, please reach out to Tricia Russo, Director of Government Affairs, at [email protected] and we will put you on our shortlist. Your voice can make a real difference!
David Feinberg, our SVP Risk & Insurance and Chair of NAPEO, wrote about our recent trip to D.C. The article is linked below.
A federal judge blocked a rule that raised salary thresholds for exempt employees. The rule raised the exempt salary threshold in two phases: from $684 per week ($35,568 annually) to $844 per week ($43,888 annually) in July 2024 and to $1,128 per week in January 2025. According to the court, the Department of Labor (DOL) overstepped its authority by raising the thresholds too high. As a result, the exempt salary threshold has been reset to $684 per week ($35,568 annually). The DOL has officially appealed the court's ruling, but a decision is pending. Employers are encouraged to monitor future updates.
The new year will bring changes to minimum wage and exempt employee salary requirements in many jurisdictions. Employers are encouraged to review employee compensation to ensure compliance with these annual changes.
On August 23, 2024, a federal appeals court overturned the U.S. Department of Labor's (DOL) so-called "80/20/30 rule," which set strict compliance requirements for employers using tip credits to meet minimum wage obligations. The 5th U.S. Circuit Court of Appeals determined that the DOL's rule did not align with the text of the Fair Labor Standards Act. The decision provides relief to employers from the rule’s compliance requirements, including the need to distinguish between “tip-producing” and “tip-supporting” work. While the federal rule has been overturned, it is important to keep in mind that states and localities may have their own requirements when it comes to tips and minimum wages. Employers with tipped employees should work with legal counsel for guidance in reviewing pay practices in light of the ruling and to ensure compliance with state and local regulations.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.
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