The Employment Law Review: USA

Employment law in the United States derives from a combination of federal, state and local laws and regulations. Historically, federal law has been the primary source of employment-related statutes and rules. In recent years, however, virtually all the legislative action in the employment arena – and there is plenty of it – has taken place at the state and local levels (i.e., cities and counties).

Federal law applies to all 50 states and Washington, DC. Generally, a federal law pre-empts state or local law when the latter conflicts with the former. On the other hand, there is no federal pre-emption issue when a state or local law addresses a matter not covered by federal law, such as private sector employee paid leave.

For the most part, recent state and local measures have significantly increased employees' legal rights, protections and benefits and have correspondingly expanded employers' legal obligations. As a result, employees in many states and localities enjoy greater rights than they have under federal law. Generally, employers must follow the law that is more favourable to their employees. For instance, many states and localities have enacted minimum wage increases in the past few years that surpass the current federal minimum wage rate. Thus, employers in those jurisdictions must pay their non-exempt employees the higher minimum wage.

Moreover, the ever-broadening scope of state and local laws regulating the employer-employee relationship continues to gain strength as a formidable exception to the long-established employment-at-will doctrine. 'At-will' means that the employment relationship can be terminated by either party, at any time, without notice and for any reason, as long as the termination does not contravene the terms of a written contract (including a collective bargaining agreement (CBA)) or a federal, state or local law. The most likely laws to be raised to contest a dismissal are the anti-discrimination laws, such as Title VII of the Civil Rights Act of 1964 (Title VII), the Americans with Disabilities Act and the Equal Pay Act, and their state or local counterparts. Further, a discharge may be challenged under a variety of other laws that also ban retaliation, such as state and local paid sick leave laws.