Legal and Regulatory Framework Governing Employment- Part 2

Posted by Jeff Pelliccio on Jul 17, 2017 9:00:00 AM

In ICS insights

In the first blog post in this series, we introduced some of the federal and state-specific regulations governing the pre-employment application, interview, and screening process. If you thought the regulatory framework was onerous in the pre-hire stage, buckle up. Your regulatory responsibility as an employer really kicks off in full force when that new employee steps through your doors for the first time in an official capacity.

In this second installment in this series, we will discuss issues employers should be mindful of when employees have begun work, including how different states address wage and hour laws, overtime pay, paid breaks, and payday requirements – laws that are all designed to protect workers by setting minimum acceptable standards.

Wage and Hour Laws

When you are hiring skilled workers, chances are you are paying them competitive wages based on their skills and experience. However, anytime you are hiring entry-level staff, you’ll need to comply with the minimum wage laws in the states you are doing business in, or with the federal minimum wage, if a state is silent on requirements.

Even in the seven states where ICS operates, there are broad differences in the amounts workers must be paid:

  • Texas follows the federal minimum wage (currently $7.25/hour);
  • Florida’s minimum is $8.10/hour;
  • Illinois law is slightly higher at $8.25/hour;
  • In Colorado, employers can expect to pay a minimum of $9.30/hour;
  • Minnesota workers get at least $9.50/hour (except small employers, who can pay $7.75/hour);
  • New York employers need to pay at least $9.70/hour;
  • District of Columbia workers will earn at least $11.50/hour – the highest in the nation.

Colorado and Florida both have minimum wage standards linked to a consumer price index, so their minimums are raised when that index is adjusted – usually annually.

The risks of not paying workers at least the minimum wage are real and significant; employers can be sued by employees or former employees, and fined or sanctioned by the Department of Labor.


Overtime provisions are treated differently from state-to-state too; In some states like Minnesota, you must pay overtime wages when a worker works more than 48 hours in a weekly period. In Illinois, the District of Columbia, New York, and Colorado, that number is 40 hours per week (although note Colorado overtime pay is also triggered when an employee works more than 12 hours in one day.)

For multi-state employers, it is critical to have processes in place to confirm you are in compliance with wage and overtime requirements.

When you work with a staffing agency that offers employer of record payroll services, you can be confident that state-specific requirements are being met. If you work with a payroll provider, make sure their systems and processes are designed to maintain compliance with DOL and state-specific rules.

Paid Breaks

While there may be exceptions in some states for administrative and executive personnel, many states have implemented mandatory rest breaks and meal breaks for employees in their state. You can find state-specific requirements for rest breaks and meal breaks on the DOL's website. If you are doing business in more than one state, make sure you understand how those state-specific differences affect your business. 

Payday Requirements

When you pay employees matters too; different states have different requirements for the minimum frequency employers can use to pay workers.

For example, Washington, D.C. workers need to be paid at least twice each month, while Illinois employers can pay executive, administrative, and professional personnel just once each month and still be in compliance with their state’s regulations. Colorado also follows a monthly pay requirement and in Texas, you can pay employees monthly if they are considered “exempt” employees; otherwise they need to be paid semi-monthly.

If your business employs workers in more than one state, it is critical that you adopt and stick to a payday schedule designed to comply with all of those states where you do business. There are still certain states that require weekly or bi-weekly paydays.

Know There are Also Local Requirements Too

Last, but not least, be aware that there are some city- or other location-specific requirements that affect your obligations, and employees' rights, too. For example, while the state of New York's minimum wage is currently $9.70/hour, employers with 11 or more workers in New York City itself must pay at least $11.00/hour, scheduled to reach $15.00/hour on 12/31/2018 (those with fewer than 11 employees must pay at least $10.50/hour, which is still higher than the state level, and scheduled to reach $15.00/hour on 12/31/2019.

Using a Staffing Agency can Help You Stay On Top of Your Regulatory Obligations

The information contained in this post represents just some of the laws employers need to be mindful of in the workplace. The next post in this series will address FLMA and time off laws and workplace safety issues. In the final installment, we will delve into how state laws differ when it comes to defining “at will” employment, and pitfalls companies can encounter when terminating employees.

ICS is a leading staffing agency for permanent, temporary, and contract workers in the New York, Washington, D.C., Fort Lauderdale, Chicago, Dallas, Houston, Minneapolis, and Denver metropolitan areas. We help employers stay in compliance with federal, state and local regulations by sourcing, screening, and placing qualified candidates, and providing employer of record payroll services when needed.

ICS will not give you specific legal advice. However, because we've been helping companies with their staffing needs since 2001, we understand the legal framework you’re operating under and we can help you operate within the requirements. To learn more, contact us online today.

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