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How These New Labor Laws Affect Small Businesses


Many labor laws in the US change every year. The federal government, states, and even cities may pass new legislation regarding labor protections that affect your business. The new labor laws for small businesses result from a changing economy, evolving technology, and growing awareness of American workers’ challenges. The Affordable Care Act and other regulations have changed the way businesses operate.

Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act (FLSA) is a federal law that sets minimum wage, overtime pay, recordkeeping, and child labor standards for employees in the private sector and Federal, State, and local governments. The law does not cover self-employed workers or employees of some small businesses.

Minimum Wage

Tipped employees (those receiving more than $30 in tips per month) are subject to the 80/20 rule under the Fair Labor Standards Act (FLSA). An employer may only take a tip credit for work performed in a tipped occupation under the FLSA (29 CFR Part 531). A full minimum wage must be paid for any work that is not directly or substantially related to tip-producing activities.

Wage and hour

The FLSA clarifies several aspects of section 3(m) concerning tip pooling. Employers who unlawfully retain tips may be penalized up to $1,100 per violation by the Department of Labor (DOL).

The Family and Medical Leave Act (FMLA)

The FMLA allows eligible employees to take up to 12 weeks of unpaid leave per year for certain family and medical reasons. The FMLA covers private employers, state and local government employers, schools, and intermediary agencies that work with individuals with disabilities under the Rehabilitation Act of 1973.

District of Columbia, B 285: Protected Time Off

The Protected Time Off Act created a new protected time-off benefit for employees of retail employers. This law requires employers to provide up to 40 hours of protected time off in a calendar year. Employees who have worked at least 1,000 hours during the preceding year are eligible for this benefit.

New York Final Rule Paid Family Leave Intermittent Leave (12 NYCRR 380-2.5)

New York Final Rule Paid Family Leave Intermittent Leave (12 NYCRR 380-2.5) This final rule establishes a temporary program for intermittent paid family leave that provides a maximum benefit duration of 26 weeks and applies only to certain employees who work for covered employers (i.e., employers who have 50 or more employees). The program began on January 1, 2022, but employers may voluntarily participate earlier than that date if they wish.

The Occupational Safety and Health Act (OSHA)

The Occupational Safety and Health Act (OSHA) is a federal law that regulates workplace safety. The law requires employers to provide a safe workplace free from recognized hazards. Employers must provide training and safety equipment and submit recordkeeping. In addition, OSHA requires that all employees are informed of any hazards in the workplace and how to avoid them. Employers are required by law to report work-related injuries or illnesses within 24 hours of their occurrence.


There are several changes made under the OSHA COVID-19 Vaccination & Testing Emergency Temporary Standard (29 CFR Parts 1910, 1915, 1917, 1918, 1926, 1928) Act:

  • COVID-19 vaccination is mandatory for businesses with 100 or more employees. Employees who wear a face covering at work and get tested regularly instead of immunized are exempted from employer policies requiring vaccination or COVID-19 testing.
  • Those eligible for medical or religious exemptions will still be able to take advantage of them.
  • Vaccinations or weekly COVID-19 tests are required for all insured employees by January 4, 2022.
  • Employees must provide vaccination proof to employers. Vaccination and testing records will not be subject to the document retention regulation of 30 years.
  • Vaccination side effects require employers to provide a reasonable amount of time off work.

Government Contractors

White House Executive Order 14042 on Ensuring Adequate COVID Safety Protocols for Federal Contractors

This allows government contractors to implement measures about COVID-19. Their subcontractors must also comply.

Healthcare Industry

United States CMS Omnibus COVID-19 Health Care Staff Vaccination Interim Final Rule

  • Before December 5, 2021, Medicare and Medicaid-participating healthcare providers and their personnel must receive the first dose of a two-dose COVID-19 vaccination or a one-dose COVID-19 vaccination.
  • By January 4, 2022, all healthcare workers must be fully vaccinated.
  • Religious and medical exemptions to vaccinations will remain valid.

California: San Francisco 2022 Healthcare Expenditure Rate (Annual Announcement)

Companies with 100 or more employees must pay $3.30 per hour for health insurance, while companies with 20 to 99 employees must pay $2.20 per hour.

Labor Relations

California SB 646: PAGA Exemption

Employees in California can bring a claim against their employers or former employers for labor violations under the Private Attorney General Act (PAGA). By July 1, 2028, janitorial employees who operate under a valid collective bargaining agreement will be exempt from PAGA.

Whistleblower Protection

This bill protects employees from retaliation when they report illegal activities to federal or state government agencies. It also protects employees who report violations of public health and safety laws by their employers. The bill prohibits employers from requiring employees to sign agreements that waive their rights under this law.

New York SB 4394 (AB2546)

In addition to independent contractors, former employees also benefit from whistleblower protections. Retaliation against whistleblowers consists of unfavorable employment actions, threats against a former employee’s current or future employment, and threats to inform immigration authorities. A reasonable employee who believes that an employer’s policy or practice violates the law is now protected from retaliation if he or she discloses it.

Protections against discrimination

In 2022, new labor laws will take effect across the United States. These laws will affect how small businesses operate and treat their employees. The following are some new labor law changes that will affect small businesses.

  • California SB 331 – Nondisclosure Agreements
  • Illinois HB 1838 – Disability Discrimination
  • Montana HB 701 (LC 2367) – Off-Duty Conduct
  • New York: NYC Int. No. 0339-2018 – Protected Classifications
  • North Carolina: Wake County Ordinance No. 16-3697/ North Carolina: Charlotte Ordinance No. 2021-115
  • North Carolina: Winston-Salem Ordinance No. 2021-23
  • Oregon HB 2935
  • Oregon SB 569 – Hiring Discrimination
  • West Virginia HB 335 – (COVID – 19)

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