Labor and employment laws give structure to the workplace, define what employees and employers are responsible for and, in some cases, outline federal regulations to give both parties necessary direction for resolving workplace conflict. These laws are important because they enable businesses to devote more of their focus to productivity and profitability rather than giving constant energy and resources to problem-solving.

Employer's Obligations

Without labor and employment laws, many small business owners would be unaware of their obligations and responsibilities as employers. The Equal Pay Act of 1963, Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act of 1990, require that employers adhere to fair employment practices in recruiting, hiring, training and retaining employees. Fair employment practices include providing equal employment opportunities regardless of disability, national origin, race or sex. The importance of labor and employment laws cannot be understated. They create the framework for employers in constructing their recruitment and selection processes, as well as the way they run their human resources departments in retaining and promoting employees.

Workplace Structure

Labor and employment laws give structure to organizations and guidance to small business owners who otherwise might not be inclined to adhere to laws, such as the Fair Labor Standards Act. The FLSA mandates minimum wage and overtime laws for salaried and hourly, non-exempt and exempt workers. It also provides guidance for employers on recordkeeping measures, requiring that businesses maintain employees' pay records for two years in some instances related to wages and up to three years for wage information when a collective bargaining agreement is in force.

Collective Activity

Labor laws such as the National Labor Relations Act are important because they give peace of mind to both union and nonunion workers. The NLRA protects the rights of employees to act collectively -- not to join collectively -- to voice their concerns about wages, benefits and working conditions. In addition, the Act requires employers and labor unions to work collaboratively in negotiating collective bargaining agreements that set out the terms and conditions of employment. For some union employees, collective bargaining agreements represent job security, which makes the importance of labor laws like the NLRA that much more essential for employees' peace of mind.


Some labor laws preserve organizational integrity; they are useful for developing business principles and workplace ethics. For example, whistle-blower laws contained in the Occupational Safety and Health Act of 1970 and the Environmental Protection Act protect the identity of employees and small-business owners who feel the company is engaging in activities that violate public policy, laws, social or ethical responsibilities. They are important because some organizations need this formality to remind owners that they should be good corporate citizens.