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What is labor law

Labor law, also known as employment law, sets clear guidelines for employer responsibilities, employee rights, and the role of trade unions. It ensures that workplaces are fair, outlining what employers must do in terms of paying fair wages, providing safe working conditions, and respecting workers' rights. This law also supports employees in understanding their rights and helps trade unions protect those rights.

Every country in the world has established a complex system of labor laws. These laws protect the interests of workers and employers to assure a minimum standard of living and a healthy economy. 

In most jurisdictions, governments enforce labor laws to:

  • Provide workers with fundamental human rights such as minimum wage and parental leave

  • Regulate employment relationships by raising the costs of laying off workers and increasing work hours

  • Empower labor unions to represent workers and enforce workplace regulations

Key aspects of labor laws

While labor laws may vary across jurisdictions worldwide, they usually address similar aspects of employment. Their goal is to protect workers and create a safe and fair working environment. Here are the main elements of work regulated by labor laws:

  • Employee rights: These include the right to a safe workplace, fair wages, and freedom from discrimination. Labor laws ensure employees understand their rights and have mechanisms to report violations.
  • Working conditions: Laws dictate aspects like workplace cleanliness, ventilation, lighting, and breaks, ensuring a healthy and comfortable work environment.
  • Workers' compensation: If an employee is injured or becomes ill due to work, these laws provide financial and medical support for recovery.
  • Workplace safety: Regulations mandate safety protocols, training, and equipment to minimize workplace hazards and prevent accidents.
  • Occupational health: Labor laws address potential health risks associated with specific jobs, requiring employers to implement preventative measures.
  • Minimum wage laws: These establish the lowest legal hourly wage employers can pay their workers.
  • Overtime pay: Employees working beyond standard hours are entitled to additional compensation under overtime regulations.
  • Pensions (in some countries): Labor laws in some countries may dictate employer contributions or minimum standards for employee retirement plans.
  • Equal pay: Ensures employees performing equal work receive equal compensation regardless of gender, race, or other protected characteristics.
  • Equal employment opportunities: Prohibits discrimination in hiring, promotion, or other job-related opportunities based on factors like race, religion, or disability.
  • Layoffs and terminations: Labor laws may establish procedures for layoffs and terminations to ensure fairness and protect employee rights.
  • Working hours: Regulations often set maximum working hours per day or week to prevent employee burnout and promote work-life balance.
  • Discrimination law: Protects employees from discrimination based on various characteristics and ensures fair treatment in the workplace.
  • Meal and rest periods: Laws may mandate minimum break times for employees to ensure their well-being and prevent fatigue.
  • Paid time off and accrual: Regulations may require employers to provide paid time off for vacations, sick leave, or other purposes, with clear guidelines for accrual and usage.

Who do labor laws protect?

Labor laws protect workers differently depending on their worker classification.

There are three main types of classification:

  • Employee: those who have an employment contract

  • Worker: those who have a contract for services

  • Self-employed: owners of a company, freelancers, or contractors


Labor laws provide employees with certain rights. Depending on the local jurisdictions, these could include:

  • A right to written terms that outline their job rights and responsibilities

  • The right to sick, holiday, and parental leave pay

  • The right to claim redundancy and unfair dismissal after two years of service


Labor law provides workers with slightly different rights; however, many of the same laws apply. These could include:

  • A right to written terms that outline their job rights and responsibilities

  • The right to national minimum wage

  • The right to paid holiday

  • Payslips

  • Protection against unlawful discrimination 


While protection is not as comprehensive for self-employed, labor law often provides some fundamental protections such as:

  • Protection for their health and safety on a client’s premises

  • Protection against discrimination

Who governs labor laws?

Labor laws are governed by a country’s local government.

In the US, for example, the federal government’s U.S. Department of Labor administers labor law under the Fair Labor Standards Act (FLSA). The FLSA establishes federal minimum wage, overtime pay, eligibility, recordkeeping, and child labor standards. These laws affect full-time and part-time workers in the private and public sectors.

US states are also free to make their own state labor laws as long as they don’t conflict with federal laws.

How are labor laws enforced and regulated?

Each country has different systems in place to enforce and regulate labor laws.

In the UK, for example, labor law is enforced through three main methods: trade unions, the Tribunal and court system, and government agencies. 

The most effective system of enforcement and creation of labor rights is through workers joining trade unions and collective bargaining.

Trade unions, also known as labor unions, have played a prominent role in enacting a broad range of labor laws and employment practices.

Trade unions are organized groups of workers who engage with employers to solve workplace problems. Governments empower trade unions to represent workers collectively and protect union strategies in negotiations with employers.

A trade union will engage in collective bargaining with employers if a workplace problem arises. Collective bargaining is the process in which working people, through their unions, negotiate contracts with their employers. These negotiations determine the terms of employment, including pay, benefits, hours, leave, job health, and safety policies.

One worker is unlikely to get his employer to agree on new safety measures or a wage increase. However, numerous workers have a much stronger chance. This is an example of collective bargaining.

Once a trade union and employer reach an agreement, they will sign a collective bargaining agreement (CBA). This legally binding contract outlines the new terms of employment.

The US also relies on trade unions to enact and enforce employment laws and regulations. In 1935 the federal government passed the National Labor Relations Act, which gave private sector employees the right to organize into trade unions to engage in collective bargaining.

The Act also created the National Labor Relations Board. The Board oversees union voting and negotiations in the United States and has the power to prosecute violations.

Other US federal and state laws protecting workers include:

Labor law compliance requires large and small businesses to stay up to date on the legal landscape, ensuring their business operations follow the rules. Failure to follow labor laws can result in financial penalties and lawsuits.

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