The difference between federal and state employment laws

Employment laws in the US are multi-layered, making it difficult to pin down which rules you’re expected to follow. Federal laws apply nationwide, but you also need to understand the latest state laws where your business operates. Failing to comply with these laws can lead to proceedings, legal sanctions, and financial liability. 

Discover the differences as we cover how federal and state laws interact and how you can tell which applies to your business. We’ll also explore the key employment laws that differ from state to state.

What is the difference between federal and state laws?

The US Constitution makes federal laws the primary law of the land while also giving power to individual states to govern themselves. To simplify things, think of federal laws as the baseline protections that employers must provide. 

Regardless of where your business operates in the US, you must meet the requirements of federal laws. When states adopt laws on the same topics, those laws are only allowed to build on the federal law’s protections. As a result, some states have more stringent employee protections than others. 

In practice, this means that you need to understand both the federal laws that impact your business and the state laws where you operate. If your business has operations in multiple states, then you may be subject to multiple rules. 

Important laws that differ between federal and state levels

These laws often differ across state lines and are likely to impact your business.

Minimum wage

The Fair Labor Standards Act (FLSA) sets the federal minimum wage at $7.25 per hour. Five states (Alabama, Louisiana, Mississippi, South Carolina, and Tennessee) follow the federal standard without adopting their own minimum wage. 

Two other states, Georgia and Wyoming, have state minimum wages that are lower than the federal minimum wage. However, state laws with lesser protections are superseded by the FLSA, so the federal minimum wage applies in these states.

The remaining states and Washington, D.C. have enacted laws that set a minimum wage the same or higher than the federal rate. For example, Iowa has adopted $7.25 per hour as the state minimum wage (the same as the federal rate), while New Mexico requires employers to pay a higher minimum wage of $12.00 per hour.

Overtime calculation

The majority of states follow the FLSA’s method for calculating overtime. Under that law, employers must pay non-exempt employees overtime when they work more than 40 hours in a single workweek. 

However, four states have added a requirement to pay overtime when an employee exceeds a set number of hours in a single workday. Alaska, California, Colorado, and Nevada require the calculation of overtime on both a daily and weekly basis.

Discrimination

Title VII of the Civil Rights Act prohibits discrimination in all states based on protected characteristics that include race, color, sex, religion, or national origin. 

Several states have added to the list of protected characteristics to instill greater protections. For example, Alaska and California include pregnancy and marital status within their protected characteristics.

Paid sick leave

The Family and Medical Leave Act (FMLA) protects unpaid leave for employees in some circumstances, but there’s no federal law guaranteeing paid sick leave for US employees. However, Washington, D.C., and several states have adopted state sick pay laws.

With no federal law setting the standard for paid sick leave, the state laws on this topic can be quite varied. Evaluate your state’s laws to fully understand how paid sick leave accrues, how employees may use it, and which family members are covered. 

Paid sick leave laws are currently found in Arizona, California, Colorado, Connecticut, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Washington, and Washington, D.C.

Occupational health and safety

The Occupational Safety and Health Act (OSH Act), administered by the Occupational Safety and Health Administration (OSHA), sets the federal standard for workplace health and safety. At the same time, states can enhance safety standards to reflect unique industries or hazards. 

More than 20 states have adopted enhanced standards that apply to both private industry and government employers. Another seven have applied enhanced standards only in government settings.

Right-to-work laws

The National Labor Relations Act (NLRA) protects collective action by workers and unions nationwide, but it doesn’t prevent unions from requiring the employees they represent to become members and pay dues. For example, an individual who is hired in a warehouse where the workers are represented by a union would be required to join the union and pay dues.

Nearly half of the states in the US have adopted their own laws that limit unions from compelling employees to become members or pay dues. These laws are commonly referred to as “right-to-work” laws. The unions still represent all employees covered in the workplace but can’t require the represented employees to become members or pay dues.   

Federal vs. state laws: FAQs

Who should I contact in case of a dispute? 

Contact an employment lawyer if you’re unsure which laws apply to your business. In the event of an employment dispute, federal law applies in all states. However, many states have expanded on federal law requirements. In those states, you are obligated to follow both the federal law requirements and the state law’s expanded requirements.

Can states give more rights than the federal government?

Yes. States have the power to adopt laws that add more rights for citizens beyond what’s guaranteed by federal law. State laws can’t reduce or restrict rights below federal guarantees, but they can expand them. 

Keep in mind that state laws apply only within the state’s boundaries. A state law in California, for example, doesn’t create new rights for employees in Texas.  

When federal and state labor laws differ, which one do we follow?

If the state law contradicts a federal law, then the federal law applies. State labor laws can’t replace federal laws, but they often add to them. Consider the federal law as setting a baseline. Any state law that adds additional rights must be followed in addition to the federal law. State laws that restrict or reduce rights can’t replace federal law.

The final word on federal and state employment laws

Understanding which employment laws apply to your location is a vital step to running a compliant business. Avoid costly lawsuits and damage to your reputation by identifying the applicable laws in your state and establishing a plan to meet your legal requirements.

Running a legally compliant business also supports fair hiring and employment practices. TestGorilla can help by delivering data-driven and impartial insights that build objectivity into your hiring process. Customize pre-employment assessments with role-specific skills, personality, and cognitive ability tests to gain a clear picture of your candidates.

For a streamlined and fair hiring process, try TestGorilla for free today.