Wages and Benefits
By Lisa Burden, J.D. | Legally reviewed by Melissa Bender, Esq. | Last reviewed May 07, 2024
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Compensation and perks are why people go to their jobs every day. Besides an hourly or annual salary, many workers also have access to employee benefits such as employer-sponsored health care coverage, paid vacation, sick leave, and other fringe benefits. But disputes over wages and benefits happen and often lead to lawsuits.
To help you understand the legal implications of these matters, FindLaw's Wages and Benefits section explores wage laws, retirement benefits, unions, and other related issues.
Wage and Hour Laws
State and federal laws determine minimum wage, the maximum number of hours an employee may work in a single shift, collective bargaining rights, overtime laws, and other rules for how employees work and get paid. These requirements are "wage and hours" laws.
The Fair Labor Standards Act (FLSA) sets federal standards for the minimum wage, overtime pay, employee record-keeping, and child labor. The federal minimum wage rate is $7.25 an hour.
But, the FLSA grants states the right to set their own state minimum wage rate, and many have done so. For example, California, New York, and New Jersey have their own minimum wage laws. The required minimum wage in California for 2024 is $16 per hour for all employers. As of Jan.1, 2024, New York's minimum wage is $16 per hour in New York City and $15 per hour in the rest of the state. New Jersey's minimum wage for 2024 is $15.13 per hour for most employees.
Another law that's important for employer wage-and-hour compliance is the Equal Pay Act. The Equal Pay Act is a federal law that mandates equal pay for equal work, regardless of gender. It bans pay discrimination based on sex.
State and federal rules on the rate of pay and equal pay do not apply to independent contractors.
Some state laws provide extra employee protections, including mandated meal periods and limits on required work hours.
The U.S. Department of Labor enforces the federal laws. States have their own labor departments. They enforce state employment and labor laws.
Health Benefits
Many U.S. employees offer health insurance, although it's not a requirement. But once an employer offers such a benefit, federal discrimination laws and health care plan regulations apply. For instance, employers that offer health care coverage may not refuse this coverage to individual employees.
Since so many U.S. workers get subsidized health benefits through their employers, the federal government enacted the Consolidated Omnibus Budget Reconciliation Act (COBRA) to help them after a job loss. The law allows employees to maintain their employer-sponsored health care plan for up to 18 months after leaving their jobs, at their own expense.
Workers' Compensation
Workers' compensation gives financial and medical benefits to employees who get injured or become ill because of their work. It typically covers eligible workers' medical expenses, lost wages, and rehabilitation costs.
ERISA and Retirement Benefits
The federal Employee Retirement Income Security Act (ERISA) governs how employment benefits — including health care coverage — get handled.
ERISA's main purpose is to ensure that retirement funds and other such benefits get managed for the "exclusive benefit" of the participants, not simply to enrich the fund managers. This law also makes the process much more transparent with notification requirements for retirement plan changes.
Time Off
The Family and Medical Leave Act (FMLA) protects workers who need time off for a family emergency or medical necessity. Under the FMLA, employers may not terminate or otherwise retaliate against an employee with a valid leave request.
Other common types of leave include vacation and holidays. Government employers must give employees a paid day off on legal holidays, not private-sector employers. Also, employers don't have to offer paid vacation time to their employees.
Unemployment Benefits
Unemployment benefits are financial payments provided to employees who have involuntarily lost jobs and meet certain eligibility criteria. These benefits temporarily help unemployed people cover basic living expenses while they search for a new job. The amount and duration of benefits vary depending on factors such as prior earnings and state regulations.
Those are just some of the topics covered in this section. Be sure to speak with an employment law attorney if you have any legal questions about wages and benefits.
You Don't Have to Solve This on Your Own — Get a Lawyer's Help
Meeting with an employment lawyer can help you understand your options and how to best protect your rights.
