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New Labor Laws Affecting Small Businesses in 2023

September 28, 2022

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If you are a small business owner or starting a new business, you may have to comply with various federal labor and employment laws.

The Wage and Hour Division (WHD) of the US Department of Labor (DOL) administers and enforces some of the most comprehensive federal labor laws. These laws cover private, state, and local government employment for the entire United States of America as well as its territories. Ensuring compliance with federal and state laws is crucial when running a small business or startup.

This article will help you stay up-to-date on changes to federal and state labor laws in the United States. Remember, following the law is good for business!

Fair Labor Standards Act (FLSA)

The FLSA establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting most full-time and part-time workers in the private sector and federal, state, and local governments.

Minimum Wage

The Fair Labor Standards Act (FLSA) emphasizes the 80/20 rule for tipped employees (who receive more than $30 a month in tips). According to the FLSA (29 CFR Part 531), an employer may only take a tip credit for work performed in a tipped occupation. According to the act, any work that does not directly or substantially support tip-producing activities must pay the full minimum wage.

Wage and hour

The U.S. DOL Final Rule Tip Regulations under the FLSA and Partial Withdrawal (29 CFR Parts 531, 578, 579, and 580)A number of amendments to section 3(m) of the FLSA concerning tip pooling is clarified. In the final rule, the Department of Labor (DOL) is empowered to assess civil monetary penalties on employers for unlawfully retaining tips up to $1,100 per violation.

The Family and Medical Leave Act (FMLA)

District of Columbia, B 285: Protected Time Off

The state law provides that medical leave will be increased to six weeks during a fiscal year and that prenatal leave will be increased to two weeks during a fiscal year. It also establishes a date for implementing the Ban on Non-Compete Agreements Amendment Act of 2020.

New York Final Rule Paid Family Leave Intermittent Leave (12 NYCRR 380-2.5)

The New York State law establishes the maximum number of days eligible employees may use for intermittent leave. A maximum of 60 days of intermittent leave may be taken annually by qualified workers who work at least five days per week.[/vc_column_text][vc_column_text]

The Occupational Safety and Health Act (OSHA)

At the end of 2021, federal OSHA announced an Emergency Temporary Standard (ETS) requiring firms with 100 or more employees to guarantee that all employees are vaccinated against COVID-19 or submit to weekly COVID-19 testing. The ETS’s status continues to evolve in 2022 too.


Under the OSHA COVID-19 Vaccination & Testing Emergency Temporary Standard (29 CFR Parts 1910, 1915, 1917, 1918, 1926, 1928) Act,

  • Businesses with 100 or more workers are required to develop an obligatory COVID-19 vaccination policy. Employers who implement a policy requiring workers to be vaccinated or to undergo regular COVID-19 testing and wear a face covering at work in lieu of immunization are exempt.
  • Medical and religious exemptions will remain available for eligible people.
  • By January 4, 2022, all insured employees must be completely vaccinated or begin weekly COVID-19 testing.
  • Employers must ensure they have proof of vaccination from their employees. The Act also clarifies that the 30-year document retention regulation will not apply to vaccination and testing records.
  • Employers need to provide a reasonable amount of time off work for vaccination side effects.

Government Contractors

White House Executive Order 14042 on Ensuring Adequate COVID Safety Protocols for Federal Contractors

The Act directs executive agencies need to amend federal contracts. This will let government contractors take measures against COVID-19. Subcontractors must follow the same procedures.

Healthcare Industry

United States CMS Omnibus COVID-19 Health Care Staff Vaccination Interim Final Rule

  • Medicare and Medicaid-participating healthcare providers and their personnel must obtain the first dose of a two-dose COVID-19 vaccination or a one-dose COVID-19 vaccine before providing the patient or other related services on December 5, 2021.
  • All health care staff must be fully vaccinated by January 4, 2022.
  • Vaccine exemptions will remain applicable to recognized medical and religious beliefs.

California: San Francisco 2022 Healthcare Expenditure Rate (Annual Announcement)

Under California State law, firms with 100 or more employees have to pay $3.30 per hour for health insurance, and employers with 20 to 99 employees have to pay $2.20 per hour for health insurance.

Labor Relations

California SB 646: PAGA Exemption

The Private Attorney General Act (PAGA) is a California law that allows employees to bring a claim to their employers or former employers for labor violations. The Act exempts janitorial employees from PAGA if they operate under a valid collective bargaining agreement in place by July 1, 2028.

Whistleblower Protection

New York SB 4394 (AB2546)

Whistleblower protections are extended to independent contractors and former employees. Whistleblower retaliation is defined as real or threatened unfavorable employment actions, threats against a former employee’s present or future employment, and threats to inform immigration authorities. This amendment now protects employees who disclose an employer’s policy or practice if the employee has a reasonable belief that the policy or practice violates the law.

Protections against discrimination

California SB 331 – Nondisclosure Agreements

It is prohibited for an employer to require an individual to sign a settlement or non-disparagement agreement linked to unlawful workplace activities such as discrimination and harassment.

Illinois HB 1838 – Disability Discrimination

Disability discrimination now also includes discrimination against an individual because of the individual’s affiliation with a disabled person.

Montana HB 701 (LC 2367) – Off-Duty Conduct

Employers cannot discriminate against employees who use marijuana legally outside of work hours.

New York: NYC Int. No. 0339-2018 – Protected Classifications

The change in the act amends the New York City Human Rights Law to add domestic workers as covered employees.

North Carolina: Wake County Ordinance No. 16-3697/ North Carolina: Charlotte Ordinance No. 2021-115

Discrimination in employment on the basis of a protected class is prohibited. Sexual orientation, gender identity, and natural hairstyles are now included in the amended definition of protected classes.

North Carolina: Winston-Salem Ordinance No. 2021-23

Employers are not entitled to discriminate in employment or public accommodations on the basis of a protected class.

Oregon HB 2935

Natural hairstyles are included in the notion of race. This modification does not restrict enforcing otherwise appropriate clothing regulations as long as they do not adversely impact protected class members.

Oregon SB 569 – Hiring Discrimination

The law change makes it an illegal employment practice for an employer to ask for a valid driver’s license unless the driver’s license is an essential requirement to perform the job.

West Virginia HB 335 – (COVID – 19)

It is now mandatory for employers to allow medical or notarized certification from licensed physicians or advanced practice registered nurses to allow employees to refuse vaccinations because of their religious beliefs.


All US businesses are required to comply with the law, regardless of whether it is a federal or state law. Labor laws are enforced differently depending on many factors, such as business type, number of employees, and where the business operates. Having legal professionals’ support and consultation is always recommended for small business owners who want to maintain their reputation.

Disclaimer: The above article can be used for general reading purposes only.


Picture of Shyamala Gowri
Shyamala Gowri
Shyamala excels in content marketing, seamlessly blending customer service insights, strategic approaches, and service management solutions into her work. She thrives on creating content that simplifies complex tech concepts and highlights their real-world benefits.

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