Labor laws might seem burdensome if you only look at their effect on the bottom line, but you’re not going to change them, so you might as well see if you can embrace them. Reviewing state and federal labor laws with an employment expert and your insurance company will help you understand why these laws were enacted, how they can potentially benefit you, where they’ll cramp your style and how you can stay compliant and avoid fines, penalties and lawsuits that can shut you down.
Some labor laws provide guidelines for employers to create and maintain safe workplaces, and these laws -- however restrictive -- benefit everyone. Workplace safety laws cover proper ventilation requirements in factories, adequate exits, required breaks after a specific number of hours worked, limits on driving and flying hours and regulations regarding the handling of certain materials. Limiting where and how long children can work and the age at which they can work protects younger workers from exploitation and harm that can arise from trying to do work only suitable for adults.
Labor laws that guarantee employees the right to organize allow workers to form unions and prohibit employers from taking any actions that discourage the formation of unions. For example, you can't post signs or make threatening statements regarding what will happen if your employees organize. Workers can collect dues that pay for representatives who negotiate for them with management, and if employees can’t come to terms with management on an issue, they are allowed to strike without fear of losing their jobs. Their union dues might temporarily provide financial assistance during strikes. Labor laws restrict some activities of unions, limiting their ability to strike without good faith bargaining.
Overtime laws prohibit employers from making employees work long hours without extra pay -- and they often prohibit employers from even asking workers to put in overtime hours. Collective bargaining agreements often result in higher pay and benefits and stricter work rules. Minimum wage laws can increase your payroll costs in a marketplace with high unemployment and low wage demand. Labor laws can increase your expenses if you have to upgrade or maintain the physical aspects of your workplace to meet safety standards.
The more labor laws and standards that apply to your business, the greater the potential for lawsuits. Employee actions arise from injuries on the workplace, wrongful termination, harassment and discrimination. Employers who don’t correctly post required signs notifying employees of their rights face fines and a weakened defense in case of a lawsuit. Include rules and regulations in your company handbook that mirror regulations from the Equal Employment Opportunity Commission, National Labor Relations Board, Occupational Safety and Health Administration and federal and state departments of labor. If your business has no signs posted informing employees of their rights, for example, you’re probably violating one or more laws.