There are an extraordinary number of laws, rules, and regulations that govern businesses and their employees. However, a small business may be exempt from one or more of them depending on the number of employees it has.
It’s important to remember that an exemption from one law doesn’t exempt you from all similar regulations. Just because your business is exempt from a federal discrimination law, for example, doesn’t mean that there won’t be a similar state discrimination law that you have to follow.
That being said, from our team of Idaho small business attorneys at Generations Law Group, here are some federal regulations that don’t apply to small businesses.
Discrimination laws
Small businesses may be exempt from several discrimination laws protecting employees from discrimination:
- Title VII of the Civil Rights Act of 1964 prohibits employers from discriminating against employees on the basis of sex, race, color, national origin, and religion. However, if you are a small business you might be exempt. In most cases, Title VII only applies to employers with 15 or more employees, including federal, state, and local governments.
- The Americans with Disabilities Act (ADA) prohibits discrimination against people with disabilities and guarantees equal opportunities for individuals with disabilities in employment, transportation, public accommodations, state and local government services, and telecommunications. If your business has fewer than 15 employees, you are exempt from the law requiring you to provide reasonable accommodations for applicants and employees. However, if your business provides public accommodation, your accommodations must be accessible under the ADA, regardless of the size of your business.
- The Age Discrimination in Employment Act (ADEA) protects certain applicants and employees, 40 years of age and older, from discrimination on the basis of age in hiring, promotion, discharge, compensation, or terms, conditions, or privileges of employment. Private businesses with fewer than 20 employees are exempt from this law.
This page from the Equal Employment Opportunity Commission (EEOC) has more information on small business exemptions from federal discrimination laws.
OSHA requirements
The Occupational Safety and Health Administration (OSHA) oversees workplace safety conditions with the intent to avoid employee injuries. Businesses that violate OSHA requirements will generally have to pay fines (sometimes quite large fines).
OSHA requirements have become all the more prevalent in the minds of some business owners because of new guidelines put in place in response to the COVID-19 pandemic. However, OSHA cuts small employers a break in a few areas:
- Employers with fewer than 25 employees only pay 40% of a normal fine.
- Employers with fewer than 10 employees are generally exempt from requirements to report workplace injuries at all, which means they don’t have to pay any fines.
Workers’ compensation
State laws set workers compensation insurance requirements. However, virtually every state’s laws vary from one another. Some states exempt small businesses with 5 or fewer employees, while some offer no exemption at all. Others fall somewhere in between.
It is very important to check with your state’s workers compensation department to see what specifically applies to you.
FDA regulations
The Food & Drug Administration (FDA) exempts nutritional labeling requirements for some small businesses in the food industry.
Here are some examples:
- Businesses that employ less than an average of 100 full-time equivalent employees and sell fewer than 100,000 product units in a 12-month period are exempt from labeling requirements. To qualify, a notice must be filed with the FDA.
- Businesses with annual gross sales of less than $500,000 or with annual gross sales of foods or dietary supplements to consumers of less than $50,000 are also exempt. In addition, the FDA does not require notice in this situation.
Check out this pdf from the FDA for more information on how regulations apply to small businesses.
Hire a small business lawyer in Idaho
While this blog post may have laid out a brief overview of federal regulations that small businesses are exempt from, such regulations are always more complicated than they seem. If you ever have a question about your business law issues, don’t hesitate to reach out to an experienced small business lawyer like me.
Just ask and I will get back to you with some insights and guidance on how to proceed. And if you have enough questions, feel free to schedule a consultation and talk about your issues.
