ARE WE COVERED BY FEDERAL LAW?
To define their jurisdiction federal laws either rely on a standard of "interstate commerce" and a minimum number of workers, or solely on the number of employees working for a substantial portion of a calendar year or a look-back of twelve months. State laws more typically use the employee number approach.
Federal Laws that use the interstate commerce standard:
1. Fair Labor Standards Act (FLSA). An employer is considered an "enterprise" under this law if it has at least two employees and is in interstate commerce. You are covered as an enterprise if your organization has an annual sales volume of at least $500,000.
These are "enterprises" without regard to dollar volumes: hospitals, businesses providing medical or nursing care, schools, and government agencies (federal, state, or local).
If you have more than one business that involves common ownership and control, the law will deem these commonly owned and controlled operations to be one "enterprise". So if each one's sales are under $500,000 a year, the law will combine their sales.
If there is no enterprise coverage the US Department of Labor will look at the workers' job activity such that they are "engaged in commerce or in the production of goods for commerce. " This is established based on the amount of sales and purchases directly or indirectly out of state.
The US Department of Labor considers domestic service workers to be protected under the FLSA.
If you wish to determine coverage under these tests, which can be complicated, contact us.
Note also that if the employer is covered there is potential PERSONAL LIABILITY for persons of authority over the organization without regard to that person's impact on commerce.
2. National Labor Relations Board
This agency enforces the federal labor law, the National Labor Relations Act, also known as the Taft-Hartley Act. The Board has jurisdiction over private sector employers (not public sector) whose activity in interstate commerce exceeds a minimal level. As a practical matter, the Board’s jurisdiction is very broad and covers the great majority of non-government employers with a workplace in the United States, including non-profits, employee-owned businesses, labor organizations, non-union businesses, and businesses in states with “Right to Work” laws.
Retailers - if they have a gross annual volume of business of $500,000 or more. This includes employers in the amusement industry, apartment houses and condominiums, cemeteries, casinos, home construction, hotels and motels, restaurants and private clubs, and taxi services. Shopping centers and office buildings have a lower threshold: $100,000 per year.
Non-retailers - jurisdiction is based on the amount of goods sold or services provided by the employer out of state (“outflow”) or purchased by the employer from out of state (“inflow”). Outflow or inflow can be direct or ‘indirect’, passing through a third company such as a supplier. The Board takes jurisdiction when annual inflow or outflow is at least $50,000.
Special categories - Channels of interstate commerce: For businesses providing essential links in the transportation of goods or passengers, including trucking and shipping companies, private bus companies, warehouses and packing houses, the minimum is $50,000 in gross annual volume.
Health care and child care institutions: Hospitals, medical and dental offices, social services organizations, child care centers and residential care centers with a gross annual volume of at least $250,000 are under NLRB jurisdiction; for nursing homes and visiting nurses associations, the minimum is $100,000.
Law firms and legal service organizations: The minimum is $250,000 in gross annual volume.
Cultural and educational centers: For private and non-profit colleges, universities, and other schools, art museums and symphony orchestras, the annual minimum is $1 million.
Federal contractors: Private contractors who work for the federal government are under NLRB jurisdiction. In addition, all federal contractors are required by the Department of Labor to post a Notice of Employee Rights under the NLRA.
Religious organizations: The Board will not assert jurisdiction over employees of a religious organization who are involved in effectuating the religious purpose of the organization, such as teachers in church-operated schools. But the Board has asserted jurisdiction over employees who work in the operations of a religious organization that did not have a religious character, such as a health care institution.
The following employers are excluded from NLRB jurisdiction:
3. Under Executive Orders governing federal contractors, such as EO 11246, there are varying degrees of compliance expected of those employers who contract to work on federal projects or in federal programs. Contact us if you are a federal contractor or subcontractor if you have questions about your coverage.
The Equal Pay Act is an amendment to the FLSA but it applies to all employers regardless of size.
OSHA covers all employers but provides small businesses a limited exception for inspections. This law has a commerce requirement but the standard is very broad. If an organization has ten or fewer employees at all times for the previous calendar year, there is no duty to maintain injury or illness records unless OSHA informs the employer otherwise.
Federal Laws that Count Heads: The discrimination laws cover employers if they have a minimum number of employees. Title VII of the 1964 Civil Rights Act defines an "employer" as an entity that has "fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year." The Age Discrimination in Employment Act uses the same test except Congress substituted "twenty or more" for "fifteen or more."
The Family and Medical Leave Act applies to any private sector employer that employs fifty or more workers in twenty or more workweeks in the current or previous calendar year. "Each working day" means any part of the week. Note that if the minimum was met in the preceding year, there is FMLA coverage in the current year even if the total employee head count fell below fifty workers.
All public sector employers are covered regardless of size.
ARE WE COVERED BY ILLINOIS LABOR AND EMPLOYMENT LAWS?
Unemployment Insurance Act 820 ILCS 405/205- If you employ one or more persons, including self-employment, for at least a day, within twenty or more weeks in a year, whether part time or full time.
Workers Compensation Act 820 ILCS 305/1 -If you are a pubic sector employer, or if you have any person in service. Section 305/3 also applies the law automatically to various enterprises or businesses that are "declared to be extra hazardous."
Minimum Wage Law 820 ILCS 105 applies to any individual or entity that employs a person on any day within a calendar year. However, an
employee is not covered if working for an employer that has less than four employees.
Wage Payment and Collection Act. 820 ILCS 115 - applies to any employer with one or more employees.
Personnel Record Review Act 820 ILCS 40/1 - applies to any employer with five or more employees (family members not to be counted).
Human Rights Act 775 ILCS 5/2- covers all employers with 15 or more employees on the payroll for at least 20 weeks out of the year. Note however that any employer is covered with respect to sexual harassment and disability discrimination claims.
VESSA (Victim's Economic Security and Safety Act) 820 ILCS 180/1 - covers all employers.
Right to Privacy in the Workplace Act. 820 ILCS 55/1. - covers all employers.
ARE WE COVERED BY WISCONSIN LABOR AND EMPLOYMENT LAWS?
Unemployment Insurance - You are a covered employer if
a) you paid wages of $1,500 or more in a quarter in any calendar year or b) You employed one or more individuals in employment for some part of a day in 20 or more weeks in any calendar year. The weeks need not be consecutive and part-time employees must be included in the employee count
c) you are a 501(c)(3) non-profit and employed 4 or more in the same time frame as described under (b) above.
Workers Compensation Act - If you usually employ three or more full-time or part-time employees. You must get insurance immediately.
Other standards for coverage:
Wisconsin Fair Employment Law (anti-discrimination) - You are covered if you have one or more employees.
Overtime and Minimum Wage Laws - Virtually all employers, public and private sectors, are covered. Exempt are farmers and those who engage domestic workers in private homes.
Wisconsin WARN law - With a few exceptions any employer with 50 or more employees within the State is covered if there is a facility shutdown or mass layoff within the State.