This article explores how federal and state labor laws shape employment practices in the United States. From wage protections and worker classification to union rights and leave policies, the legal landscape significantly impacts both employers and employees.

Federal Labor and Employment Laws in the US

Labor and employment laws in the U.S. continue to shape the quality of life for millions of workers by establishing and enhancing bargaining rights, minimum wages, equal opportunity, and safety in the workplace. The laws are designed to ensure workers stay safe and are treated fairly, while also protecting employers’ interest. Accordingly, there are many laws that shapes businesses, job seekers, and workers.

Fair Labor Standards Act (“FLSA”)

This act provides federal standards for wages and overtime pay that affects both the private and public employment sectors.

Occupational Safety and Health Act

This act mandates employers to comply with safety and health standards in the workplace. It requires employers to provide a workplace free from hazards.

National Labor Relations Act

This act protects the rights of employees to organize and join unions, act in concert to protest or attempt to change working conditions, and engage in collective bargaining.

Family and Medical Leave Act

This act requires employers of 50 or more employees to give up to 12 weeks of unpaid, job-protected leave to eligible employees for the birth or adoption of a child or for the serious illness of an employee or an employee’s family member.

Title VII of the Civil Rights Act of 1964

This act prohibits employment discrimination based on race, color, sex, national origin, and religion.

The FLSA Mandates a Federal Minimum Wage and Overtime Pay

The FLSA established federal minimum wage, overtime pay, recordkeeping, and youth employment standards that affect employees in the private and public sector. Covered nonexempt workers are entitled to a minimum wage of no less than $7.25 per hour and overtime pay at a rate no less than one and a half times the regular rate of pay.

Who is Not Entitled to Minimum Wage?

The FLSA requires that most employees in the United States be paid at least the federal minimum wage for all hours worked and overtime pay when applicable. However, one substantial share of workers is excluded from coverage under the FLSA—independent contractors.

Some employers avoid complying with the FLSA and other federal labor laws by classifying employees as independent contractors. In many cases, employees and independent contractors face identical working conditions but workers misclassified as independent contractors are not afforded the same legal rights to minimum wage laws under the FLSA.

Those misclassified independent contractors often are paid below the minimum wage and do not get overtime pay for work done over the 40 hour workweek. Furthermore, employers that misclassify workers circumvent laws that require they provide essential healthcare and employee benefits, as well as paying taxes on those wages. This is especially prevalent in the construction, telehealth, and transportation industries.

State Legislation Provides a Model for Federal Labor Rights

Many state-level initiatives have influenced national employment policies like employee misclassification guidance and the Providing Urgent Maternal Protections (“PUMP”) Act. For example, following California’s Assembly Bill 5, the Department of Labor published the 2024 rule on how to analyze whether a worker is an employee or an independent contractor. Furthermore, in 2023, the PUMP Act drew on state legislation from Utah and California in expanding rights to nursing employees.

Economic Realities Test Modeled After California’s Misclassification Laws

In 2018, California adopted the ABC test to determine if workers in California are employees or independent contractors under the Labor Code. Under the ABC test, a worker is considered an employee and not an independent contractor, unless the employer determines that:

The worker is free from the control and direction of the employer in connection with the performance of the work;
The worker performs work that is outside the usual course of the hiring entity’s business; and
The worker is customarily engaged in an independently established trade, occupation, or business of the same nature.

The Department of Labor adopted the 2021 Independent Contractor Rul...

Miller Shah

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