What labor laws apply when hiring employees?

Labor Laws for Hiring Employees in Pennsylvania

When hiring employees in Pennsylvania, businesses must comply with several key labor laws that govern employment practices. These laws ensure proper treatment of employees and help maintain operational compliance.

Minimum Wage and Overtime

• Minimum Wage: As of 2026, Pennsylvania follows the federal minimum wage of $7.25 per hour. However, employers should monitor any local wage ordinances that may set higher rates.
• Overtime: Non-exempt employees must be paid overtime at 1.5 times their regular rate for hours worked over 40 in a workweek.

Employee Classification

• Exempt vs. Non-Exempt: Properly classify employees to determine eligibility for overtime and minimum wage protections.
• Independent Contractors: Ensure correct classification to avoid payroll and tax compliance issues.

Hiring Documentation and Verification

• Form I-9: Verify employment eligibility for all new hires using Form I-9, maintaining records as required.
• W-4 Form: Collect federal tax withholding information for payroll processing.
• Recordkeeping: Maintain employee records including hours worked, wages paid, and hiring documents for at least three years.

Anti-Discrimination and Workplace Rights

• Equal Employment Opportunity: Avoid discrimination based on race, color, religion, sex, national origin, age, disability, or genetic information.
• Harassment Prevention: Implement policies to prevent workplace harassment and provide employee training where applicable.

Workers’ Compensation and Insurance

• Workers’ Compensation Insurance: Pennsylvania requires most employers to carry workers’ compensation insurance to cover workplace injuries.
• Unemployment Insurance: Register for state unemployment insurance to comply with payroll tax obligations.

Practical Steps for Compliance

• Register your business with the Pennsylvania Department of Labor & Industry before hiring.
• Set up payroll systems to handle wage payments, tax withholdings, and reporting.
• Develop clear job descriptions and employee handbooks reflecting state labor laws.
• Use automated tools for time tracking and recordkeeping to ensure accuracy.