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Federal Laws That Affect Employers

As many employers know, there are a variety of federal laws that impact the workplace.  Federal law imposes responsibilities on employers which they should regularly review for compliance.  Even well-known laws are frequently updated by regulation, without legislative action.  The Federal Laws section covers the following federal statutes: 

Nondiscrimination Laws

At a minimum, the federal nondiscrimination laws prohibit discrimination in hiring and firing, promotions, pay, benefits and other terms and conditions of employment.  They include:

  • Title VII of the Civil Rights Act of 1964, which prohibits discrimination in employment on the basis of race, color, sex, pregnancy, religion, and national origin.  Many states have similar laws prohibiting discrimination based on these classifications as well as disability and age, and against other protected classes.    
  • The Americans with Disabilities Act (ADA), which prohibits discrimination against qualified individuals with disabilities.  The ADA also requires covered employers (those with 15 or more employees) to provide a reasonable accommodation to these qualified individuals, unless the accommodation would impose an undue hardship on the employer’s operations.
  • The Age Discrimination in Employment Act (ADEA), which prohibits discrimination against individuals age 40 and older on the basis of their age.  This law also has requirements related to the treatment of pension benefits for older workers.  See the Older Workers Benefit Protection Act (OWBPA), which is part of the ADEA.
  • The Uniformed Services Employment and Reemployment Rights Act (USERRA), which prohibits discrimination against a person on the basis of past military service, current military obligations, or intent to serve.  Many states also provide job-protected military leave. 
  • The Genetic Information Nondiscrimination Act (GINA), which prohibits discrimination in employment based on genetic information.

Family and Medical Leave

The Family and Medical Leave Act of 1993 (FMLA) provides job-protected, unpaid leave to employees for their immediate family member’s or their own serious health condition.  The FMLA now also provides for leave for family members of covered service members in the Armed Forces for certain reasons.  Eligible employees of covered employers (50 or more employees) may not be denied entitled leave, and may not be retaliated against for validly using FMLA leave.  There are also comparable family/medical laws in many states.   

Portability of Health Benefits

The federal COBRA law generally requires employers with 20 or more employees who offer group health plans to offer employees, their spouses and their dependents continued health  coverage following termination of their coverage under the group plan (so long as the plan itself continues).  Employers of fewer than 20 employees that are not covered by COBRA may still have similar continuation of coverage responsibilities under their State law. 

The federal HIPAA law requires group health plans (including employer-sponsored plans) to issue documents demonstrating an insured’s period of coverage that can be credited against any pre-existing condition period.  These documents are called certificates of creditable coverage.  A certificate must be issued automatically and free of charge when an individual:

  • Loses coverage under a plan;
  • Becomes entitled to elect COBRA continuation coverage;
  • Lose COBRA continuation coverage; or
  • Upon request while the individual has health coverage, or within 24 months after their coverage ends.

For more on creditable coverage and HIPAA in general, please visit the HIPAA Section (link to new HIPAA section).

Laws Affecting Retirement Plans

The Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code govern the establishment, operation and administration of retirement plans.  After employee stops working for a company, an employer-sponsored retirement plan may need to comply with retirement distributions or responsibilities relating to “rolling over” a former employee’s assets to another plan or fund.  For more on these and other rules related to ERISA-covered retirement plans, visit the Retirement Plans Section by clicking here (link to new Retirement Plans section).       

Unemployment Insurance

The Federal Unemployment Tax Act (FUTA), with state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs. Most employers pay both a Federal and a state unemployment tax.

Note: This overview is not an exhaustive list or explanation of federal or state laws, regulations or case law that affect employee terminations.  Rather, these brief descriptions are intended to highlight a few key areas for employers to be aware of.  For more guidance, please visit other Sections, or for specific matters, seek the advice of employment counsel in your local jurisdiction. 

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