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Compliance Issues: The importance of businesses complying with employment laws

by | May 4, 2021 | Business Law

Many components go into running a successful business. Compliance with federal, state, and local laws and regulations certainly is at the top of the list. A non-compliant business can be costly at best and devasting at worst. Hiring and training knowledgeable human resources personnel is paramount to preventing compliance issues from arising in the first place. Learn how business and employment attorneys can assist businesses in preventing compliance issues.

Businesses need to comply with business & employment laws

Employment Policies and Procedures

First and foremost, it is important to review and revise employment policies and procedures with the ever-changing and developing law governing the employment relationship. These policies and procedures must comply with federal, state, and local employment laws. By creating clear policies that define the parameters of the employment relationship, employees will know the rules by which they must abide. Attorneys can help by drafting, reviewing and revising those policies to make sure they are in accordance with the law. Below are just a few employment laws with which businesses must comply.

Fair Labor and Standards Act (FLSA)

The Fair Labor and Standards Act (FLSA) helps establish minimum wage and overtime hours and pay. The Federal minimum wage is currently set at $7.25/hour. This may be different from the state’s minimum wage. In Wisconsin, the minimum wage rate is the same as the Federal wage rate, $7.25/hour. In Illinois, the minimum wage is set at $11.00/hour. According to the FLSA, overtime pay is required by law to be at the rate of one-and-one-half times the rate of regular pay if an employee is working over 40 hours in a workweek. This law helps create fair compensation for the work your employees are performing.

Family and Medical Leave Act (FMLA)

The Family and Medical Leave Act (FMLA) establishes job protection for employees that need to take off of work because of serious family or medical reasons. There is a 12-week job protection period for employees that need to take an unpaid leave of absence due to things like a serious health condition of that employee or close relative or the birth of a child. FMLA applies to all employees of public sector employers and employees of private sector employers that employ 50 or more people for at least 20 workweeks within the year.


There are many anti-discrimination laws that are important to acknowledge. These include the Age Discrimination in Employment Act, Americans with Disabilities Act, and the Civil Rights Acts. These three laws help establish laws against discrimination based on age, disabilities, race, gender, sexual orientation, color, religion, and national origin. Although both Wisconsin and Illinois have rules for at-will employment, employers cannot use any of the aforementioned characteristics as a factor in determining the employment status of an individual.

Occupational Safety and Health Administration (OSHA)

The Occupational Safety and Health Administration (OSHA) is an organization that oversees safety and health protocols. OSHA provides strict health and safety regulations for businesses so that there is less risk and less danger for employees. OSHA also has established a Whistleblower Protection Program that protects employees who expose or report OSHA violations from retaliation. By complying with the regulations set forth by OSHA, you are putting the safety and health of your employees first. If you are not compliant with OSHA regulations, you risk not only putting your employees in danger, but also the financial penalties associated with non-compliance.

Training and Counseling

While a business’s policies and procedures may be in compliance with the law, the polices and procedures are meaningless if the business employs individuals who apply the policies and procedures incorrectly. It is therefore critical that a business’s staff be properly trained and knowledgeable with respect to how the policies and procedures will be carried out. If there is an oversight by an employee working in any sort of HR task, that could mean harsh consequences from the IRS, DOL, or other governmental agencies.

First and foremost, it is important that HR managers and other HR Staff are competent with the employment laws – both state and federal – in their state. An incompetent HR person could lead to very costly consequences such as discrimination lawsuits, misclassification of employees as exempt from wage payment laws, misclassification of persons as independent contractors, etc.

Secondly, it is important that HR employees strictly adhere to the guidelines that they’ve established. These guidelines are important for all employees in the company because they provide various protections. These not only include employment, pay, and overtime protections, but safety protocols as well. Deviation from the guidelines could be used by a savvy employment lawyer to demonstrate that the company treated one employee different from another employee in a discrimination suit. Consistent application of the employment policies is extremely important.

Lastly, it is important for HR managers to oversee all aspects of the HR department. Without adequate oversight, HR staff may not receive the proper training and instructions which could lead to costly mistakes.

How McDonald & Kloth, LLC can help with preventing compliance issues

The attorneys at McDonald & Kloth, LLC can help your business with compliance issues. We can help review and revise your employee policies and procedures to ensure that they follow suit with state and federal requirements. Our attorneys can also train and counsel your managers to handle employment law matters properly. We understand how important your business is to you. Let us help.