Quiz: Do These 10 Labor Laws Apply to Your Small Business?

labor laws that affect small businesses

Running your business and making a profit are challenging enough. But you also must be aware of labor laws that apply to your small business. In this quiz we test your knowledge about laws that could affect small businesses like yours.

In the United States Several well-established labor laws go back decades. Originally most were designed to protect workers. There’s a silver lining for businesses. Yes, compliance can occasionally feel tedious, but step back and look at the big picture. Reasonable laws give us certainty. There’s less guesswork. They level the playing field and provide a framework for you to operate a safe, productive and respectful workplace.

The labor laws and regulations start at the Federal level, including the Fair Labor Standards Act (FLSA).  But there’s a whole patchwork of state labor laws, too. Even cities may have employment ordinances.

See how much you know about these labor laws – take the quiz!

Quiz: Labor Laws That Apply to Small Business


#1. I must provide a safe workplace for employees, true or false?

According to Employer.gov, “You must provide a workplace free of known health and safety hazards and comply with certain safety standards, rules, and regulations, which may vary depending on your industry and nature of operations. Your employees have the right to refuse dangerous work, provided certain conditions are met.”

OSHA is the main law that covers most employers, but other laws may apply to specific industries (e.g., mines). Also, 22 states have their own occupational safety divisions which are monitored by OSHA. Read.

#2. How much is the hourly minimum wage under U.S. Federal law?

Under U.S. Federal law, the minimum wage an employer can pay employees is $7.25 per hour.

Tipped employees may have lower hourly rates; however, their combined average tips and wage must equal the minimum.

Keep in mind that 30 states (including the District of Columbia) and some municipalities like New York City require a higher wage than the Federal minimum. A state map of minimum wages can be found at the Department of Labor website, here.

#3. Hourly workers who work overtime are entitled to double their rate of pay – true or false?

Under the Federal Fair Labor Standards Act, hourly workers who work more than 40 hours in a week are entitled to time-and-a-half (in other words, one and a half times their regular pay rate) for overtime hours.

State laws may require a different overtime rate. For example, California requires overtime of twice the rate of pay for any hours over 12 in a day.

#4. Is my small business required to display posters advising workers of labor law rights?

The correct answer is yes, you must display posters if the law requires one and if it applies to your type of business.

The Department of Labor has a helpful poster advisor tool to tell you which posters you must display.  There are also state laws that could apply.

#5. Can kids under age 14 be employed?

Yes, kids under 14 can be employed, but only under limited circumstances. Children under age 14 are permitted to:

  • deliver newspapers,
  • babysit,
  • work as an actor or performer,
  • work in a business owned by their parents, or
  • do limited agricultural work.

Other exceptions may apply, but those are the most common. Hours are greatly restricted, and work may not interfere with schooling. This is under Federal law. State laws may impose further limitations.

#6. A teenager aged 16 or 17 is limited to 8 hours of work a week, true or false?

In general this is false.

  • Under Federal law, teenagers between 16 and 17 have no restrictions on the number of hours they can work.
  • Some state laws restrict hours. But even those generally allow more than 8 hours a week. For example, the State of Washington limits 16-17 year olds to 20 hours a week — and more when school is not in session.
  • Always check the laws in your state.

#7. Is there a minimum age for when my minor kids can work in my business?

There are no minimum age restrictions under Federal law. But please put your child’s health and welfare first.

Also, other legal restrictions still apply. For example, your minor children cannot work in your business if you are engaged in a hazardous industry.  State laws may also apply. Read more.

#8. Is a small business required to offer family leave to employees?

The correct answer is: possibly. It depends on the size of your business and where you are located.

Under U.S. Federal law you must offer family leave if your business has 50 or more employees. However, some states and a few municipalities require family leave even by smaller businesses.

What’s more, this is an area of the law that is rapidly changing. So it’s important to stay abreast of laws in your area. Read more.

#9. Am I required to hire a disabled person even if someone else is better qualified?

The correct answer is, no. You are not required to hire a disabled person if someone else is better qualified — as long as you do not base your decision on the disability.

However, Federal law will not permit you to discriminate against a disabled person.

Also, if a disabled person asks for a reasonable accommodation to do the job, you must give it.

The Federal law applies to employers with 15 or more employees. State requirements may apply to smaller employers.

Over 50 million Americans have disabilities. Many employers have found disabled employees to be excellent workers who contribute much to the workplace.

#10. Every business must use E-Verify to prove workers have the right to work in the U.S. – true or false?


E-Verify is a good electronic system that can help you comply with the law. However, e-Verify is currently voluntary and not required except for government contractors or if required by state law.

However, as an employer, you are required to verify that you are hiring workers legally authorized to work in the United States. This means you must file Form I-9 and verify certain related information.

But whether you use e-Verify to help you in that process is your choice.


Image: DepositPhotos

Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.