Labor Law Guide for Limousine Business Owners in Texas

Introduction

This memo, prepared by Atwood and Allen Consulting, provides a review of the federal labor laws most relevant to Landslide Limousines. As your business grows, familiarity with these regulations will be essential to maintaining compliance, avoiding penalties, and protecting both your employees and your company's long-term interests.

Wage and Hour Requirements Under the FLSA

Labor laws are important to understand and apply correctly. The Fair Labor Standards Act (FLSA) establishes the federal minimum wage, governs how overtime must be paid, and sets requirements for maintaining proper payroll records for both full-time and part-time employees. The FLSA applies to private employers, state and federal employees, and the U.S. Postal Service — and it will apply to your business as well.

Currently in Texas, the minimum wage is $7.25 per hour. The penalty for failure to pay at least the minimum wage is generally up to $1,100 "for each violation" (DOL). There is also a provision in the FLSA that allows employers to pay tipped employees less than the minimum wage, as long as what you pay them plus the tips they receive add up to at least the minimum wage (Nolo). It is worth noting that the average annual salary for a limousine driver is approximately $25,020 (Suttle, 2013).

If you have long-term plans for Landslide Limousines and intend to grow the business, you will need to be aware of the Employee Retirement Income Security Act (ERISA) of 1974. This law established standards for retirement and health benefit plans in private industry. You are not required to provide your drivers with a retirement plan, but you should be aware of the Affordable Care Act (also known as the ACA or Obamacare).

Retirement and Health Benefits: ERISA and the Affordable Care Act

According to Bloomberg Businessweek, if you have fewer than 50 employees, you are not required to provide health insurance coverage for them. However, if your business grows to a point where you have more than 50 full-time employees, you will be required to provide insurance. Specifically, when you have fifty employees working an average of 30 hours per week, you will need to provide them with health insurance "starting 90 days after they are hired" (Klein, 2013). The fine for failure to provide the required insurance is up to "$2,000 per employee" (Klein). Additionally, if you have provided health insurance for an employee and that person leaves or is terminated, he or she may be eligible to continue receiving health insurance coverage under COBRA.

The Family and Medical Leave Act (FMLA) entitles eligible employees to take unpaid, job-protected leave for specified family and medical reasons, with continuation of group health insurance coverage under the same terms as when they were actively employed (DOL). An employee may take up to twelve weeks of leave under the following circumstances:

a) The birth of a child, up to one year after the birth; b) the placement of an adopted child or a child in foster care, up to one year after placement; c) when a spouse, child, or parent is suffering from a serious health condition; d) when an employee becomes seriously ill and is unable to perform job functions satisfactorily; and e) "any qualifying exigency arising out of the fact that the employee's spouse, son, daughter, or parent is a covered military member" on active duty (DOL).

Conclusion

Staying informed about federal labor law is essential for any growing small business. As Landslide Limousines expands, compliance with the FLSA, ACA, FMLA, and OSHA will protect both the business and its employees. Please do not hesitate to contact Atwood and Allen Consulting if you have questions about any of the laws or provisions outlined in this memo.