Federal Labor Laws by Business Size: What Small Businesses Owners Need to Know

Running a small business comes with enough challenges without worrying about accidentally breaking employment laws you didn't even know existed. 

Here's what makes this tricky: federal labor laws change based on how many people work for you. Some federal employment laws apply to every business owner from day one, while others only kick in when you reach specific employee thresholds—15, 20, 50, or 100 employees. 

Miss a requirement that applies to your size business, and you could face penalties, lawsuits, or back-wage claims that seriously threaten your bottom line.

We created this guide to cut through the confusion and help you stay compliant as your business grows. You'll learn: 

• Exactly which federal laws apply to all businesses, regardless of size
• Which federal laws apply to your current team size
• Extra requirements for businesses with 15 or more employees
• New obligations when you reach 20 employees
• What changes at 50 employees
• Major compliance requirements for businesses with 100+ employees

Important note: This article focuses on federal employment laws. Your state likely has additional labor regulations with their own employee thresholds that may be more protective than federal requirements. Check your state labor law guide to understand the complete picture of what's required in your area.

The good news? You can build labor law compliance into the fabric of your small business with tools like Homebase. The scheduling, time tracking, and HR features are designed to help keep you compliant, while you focus on growing your business. Let's dive in and make sure you're covered at every stage of growth.

Federal labor laws for all small businesses

No matter how small your team is, these laws apply to every small business owner from day one.

Occupational Safety and Health Act (OSH Act)

You're responsible for providing a safe work environment for all employees. Follow the industry-specific standards set by OSHA and display the required poster about workplace rights and safety. You can take a look at the administration’s employer help site to learn more about the rules you need to follow.

Equal Pay Act (EPA)

Paying your employees fairly is key to maintaining a happy, motivated team — and it’s the law. The EPA requires you to provide equal pay for all employees, regardless of sex, who perform substantially equal work within the same workplace. This covers all forms of compensation including salary, bonuses, benefits, and overtime. 

When it comes to closing a wage gap that exists between your employees, you may not lower wages. Instead, raise the lower wage to match the higher one.

Fair Labor Standards Act (FLSA)

Wondering how much to pay your employees? The FLSA sets minimum wage requirements, overtime pay rules, child labor protections, and recordkeeping requirements for most employers.

The federal minimum wage is currently $7.25 per hour, though many states require higher rates that take priority. You'll need to pay non-exempt employees time-and-a-half (1.5 times their regular rate) for any hours worked over 40 in a workweek.

Keep accurate records of hours worked, wages paid, and other employment information for at least three years. (Psst — scheduling through Homebase will automatically track this for you.)

Immigration Reform and Control Act (IRCA)

Make sure your employees can legally work in the United States, as required by the Immigration Reform and Control Act of 1986. You'll need to complete Form I-9 for every employee and keep these records for at least three years after hiring or one year after termination, whichever is longer.

Every new hire needs to provide acceptable documentation proving their identity and work authorization before they start working. I-9 paperwork violations can result in fines, so build this into your hiring and onboarding process to make sure your employees  are covered.

Employee Polygraph Protection Act (EPPA)

Trust is an important part of building your team. But keep in mind that federal law prohibits most private employers from using lie detector tests for pre-employment screening or during employment. There are limited exceptions for certain security-related positions and ongoing investigations of workplace theft.

Employee Retirement Income Security Act (ERISA)

Offering benefits to your employees like 401(k)s or group health insurance? ERISA sets minimum standards for these plans, including disclosure requirements and fiduciary responsibilities. You’ve got to provide clear information about plan features, set standards for participation, and more. Learn more on the DOL’s ERISA Compliance Assistance site.

Uniformed Services Employment and Reemployment Rights Act (USERRA)

If you’ve got employees who might take military leave, it’s important to know their employment protections. You can't discriminate against employees or applicants based on their military service,  and employees who take military leave have the right to be reinstated to their position when they return. The USERRA guide provides detailed requirements.

Consumer Credit Protection Act (CCPA)

The CCPA are protections for consumers from banks, credit card companies, and other lenders. The CCPA protects employees from being fired due to wage garnishment for a single debt and limits how much of their wages can be garnished per week.

Jury Systems Improvement Act (JSIA)

While jury duty may seem inconvenient to a small business, it’s still a protected process by law. You can't discharge or retaliate against employees for federal jury duty. While you don't have to provide paid time off for jury service, you do need to allow employees to fulfill their civic duty.

Federal labor laws for businesses with 15 or more employees

When you reach 15 employees, you'll need to comply with additional federal laws designed to prevent discrimination in the workplace. These laws are enforced by the Equal Employment Opportunity Commission.

Americans with Disabilities Act (ADA)

The ADA prohibits discrimination against individuals with disabilities in any area of employment, including hiring, payment, job assignments, training, and benefits. You're also required to make reasonable accommodations for employees with disabilities.

This could include modifying work schedules, providing assistive technology, or making physical workspace changes. The goal is to enable qualified individuals with disabilities to perform their job duties effectively.

Genetic Information Nondiscrimination Act (GINA)

GINA prohibits discrimination against employees because of their genetic information, which includes:

• Information about their own genetic tests or those of family members
• Family medical history
• Requests for and receipt of genetic services
• Genetic information about fetuses or embryos

You can't use genetic information in hiring, firing, job assignments, or any other employment decisions.

Pregnancy Discrimination Act (PDA)

Under the PDA, you can't discriminate against employees because of pregnancy, childbirth, or any related medical conditions. You need to treat pregnant employees or those affected by related conditions the same as other employees who have a similar ability to work.

This means if you provide accommodations for other temporary conditions, you generally need to provide similar accommodations for pregnancy-related conditions.

Title VII of the Civil Rights Act

This law prevents discrimination based on race, color, religion, sex, or national origin. This includes discriminatory practices in hiring decisions, job assignments, promotions, training opportunities, and termination decisions.

You can't ask discriminatory questions during interviews or make employment decisions based on any of these protected characteristics.

What this means for your business

Once you hit 15 employees, you'll need to be more careful about your hiring practices, workplace policies, and how you handle employee issues. Document your employment decisions based on legitimate business reasons, and ensure your managers understand these anti-discrimination requirements.

Homebase's HR tools can help you create compliant employee handbooks and maintain proper documentation as you navigate these additional requirements.

Federal labor laws for businesses with 20 or more employees

When your team grows to 20 employees, two additional federal laws come into play that provide important protections for your workers.

Age Discrimination in Employment Act (ADEA)

The ADEA prevents discrimination against individuals who are 40 years of age or older. This applies to all aspects of employment, including hiring, firing, promotions, compensation, and job assignments.

You can't make employment decisions based on someone's age, ask age-related questions during interviews, or treat older workers differently because of assumptions about their capabilities or retirement plans. The law does allow you to favor older workers over younger ones, even if both are over 40.

It's also illegal to harass someone because of their age or retaliate against employees who file age discrimination complaints.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

COBRA requires you to offer employees and their family members the opportunity to continue their group health insurance coverage when they would otherwise lose it due to certain qualifying events.

Qualifying events include:

• Termination or reduction in work hours (except for gross misconduct)
• Divorce or legal separation from the covered employee
• Death of the covered employee
• Loss of dependent child status
• Employee becoming entitled to Medicare

Employees can typically continue coverage for 18 months (or 36 months in some cases) but must pay the full premium cost plus up to 2% for administrative fees. You need to provide proper notice to employees about their COBRA rights and help coordinate the continuation coverage process.

What this means for your business

At 20 employees, you'll need to be mindful of age-related comments and ensure your health insurance provider can handle COBRA administration. Many employers work with their insurance carrier or a third-party administrator to manage COBRA compliance, as the notification and enrollment requirements can be complex.

Homebase can help you maintain proper employee records and documentation that supports fair employment practices across all age groups as your team continues to grow.

Federal labor laws for businesses with 50 or more employees

Reaching 50 employees is a significant milestone that brings two major federal compliance requirements focused on employee benefits and family support.

Family and Medical Leave Act (FMLA)

The FMLA requires you to provide up to 12 weeks of unpaid, job-protected leave to eligible employees in a 12-month period for specific reasons:

• Birth and care of a newborn child
• Placement of a child for adoption or foster care
• Caring for an immediate family member (spouse, child, or parent) with a serious health condition
• Managing their own serious health condition
• Certain military family leave situations

Employee eligibility requirements:

• Worked for your company for at least 12 months
• Worked at least 1,250 hours during the 12 months before their leave starts
• Work at a location where you have at least 50 employees within 75 miles

You must maintain the employee's group health benefits during FMLA leave and restore them to the same or equivalent position when they return. You're also required to display the FMLA poster in your workplace.

Affordable Care Act (ACA) - Employer Shared Responsibility Rules

You must offer affordable, minimum value healthcare coverage to all full-time employees (those working 30+ hours per week) and their dependents. If you don't offer coverage and at least one full-time employee receives a premium tax credit for purchasing individual coverage, you may need to make a payment to the IRS.

The coverage you offer must meet affordability standards (employee's share of premium for self-only coverage can't exceed a certain percentage of their household income) and provide minimum value (cover at least 60% of total allowed costs).

Check out the IRS frequently asked questions to learn more about these requirements.

What this means for your business

At 50 employees, you're entering "large employer" territory with significantly more complex HR and benefits obligations. Many businesses at this size start working with HR professionals or benefits administrators to ensure compliance with FMLA tracking and ACA reporting requirements.

You'll need systems to track employee hours, manage leave requests, and coordinate with your health insurance provider on coverage requirements. Homebase's time tracking and HR tools can help you maintain the detailed records needed for both FMLA and ACA compliance as you navigate these new responsibilities.

Federal labor laws for businesses with 100 or more employees

At 100 employees, you're officially a large employer with additional federal reporting and notification requirements that reflect your significant role in the workforce.

Worker Adjustment and Retraining Notification (WARN) Act

The WARN Act requires you to provide written notice at least 60 calendar days in advance of covered plant closings and mass layoffs affecting 50 or more workers at a single site of employment.

You need to provide WARN notice for:

• Plant closings that will result in job loss for 50 or more employees during any 30-day period
• Mass layoffs that will result in job loss for at least 33% of the workforce (minimum of 50 employees) during any 30-day period
• Mass layoffs affecting 500 or more employees, regardless of percentage

Who gets notified:

• Each affected employee or their representative
• The state dislocated worker unit
• The chief elected official of the local government where the layoff will occur

The notice gives workers and communities time to prepare for the job losses and seek retraining or new employment opportunities. There are limited exceptions for unforeseeable business circumstances, natural disasters, and certain business situations.

EEO-1 Report

You must submit annual demographic workforce data to the EEOC and Department of Labor that breaks down your workforce by race, ethnicity, gender, and job category. This reporting helps federal agencies monitor employment patterns and enforce civil rights laws.

The report is typically due by a deadline set by the EEOC each year (the 2024 report was due June 24, 2025). You can submit your data through the EEOC's online system.

What this means for your business

At 100+ employees, you're subject to the most comprehensive set of federal employment laws. You'll likely need dedicated HR staff or external HR support to manage compliance with all these requirements, from the basic laws that apply to all employers up through these large-employer obligations.

Consider establishing formal policies and procedures for workforce reductions to ensure WARN Act compliance, and make sure someone on your team is responsible for annual EEO-1 reporting deadlines.

Homebase's comprehensive HR and compliance tools can help you maintain the detailed employee records and documentation needed to meet all these federal requirements as you continue scaling your business.

Staying compliant as you grow

Federal labor laws can feel overwhelming, but understanding which requirements apply at each stage of growth helps you prepare and stay compliant. The key is building good practices from the start and adapting as you reach new employee thresholds.

Remember that these federal requirements represent the minimum standards - many states and local jurisdictions have additional protections that may be more comprehensive. Always check your state labor law requirements to ensure you're meeting all applicable regulations.

Key takeaways

• All sizes: Focus on proper wage and hour practices, workplace safety, and basic documentation from day one
• 15+ employees: Implement anti-discrimination policies and ensure fair treatment across all protected characteristics
• 20+ employees: Add age discrimination protections and prepare for COBRA administration
• 50+ employees: Establish FMLA tracking systems and ensure ACA-compliant health coverage
• 100+ employees: Develop formal procedures for workforce changes and annual EEO reporting

Getting help with compliance

As your business grows, consider working with HR professionals, employment attorneys, or compliance tools to manage these increasingly complex requirements. Many successful small businesses find that investing in proper HR support actually saves money by preventing violations and creating efficient processes.

Homebase has HR and compliance tools built in, designed specifically for growing businesses. From time tracking and scheduling to employee handbooks and policy management, we help you stay compliant at every stage of growth so you can focus on what matters most — building your business and taking care of your team.