10 Things That are Illegal for Your Employer to Do

Employers who violate the law can cause trouble for their workers

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Updated May 28, 2024
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Most jobs turn out to be a good experience. The employer treats workers well and does everything by the book. With any luck, you might even earn solid pay that helps lower your financial stress.

But sometimes, employers don’t follow labor laws. And when that happens, it can hurt you as an employee and is also illegal.

Following are some illegal things that an employer might try to do.

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Ask prohibited questions

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Federal law prohibits employers from asking specific questions when talking to workers.

For example, there are restrictions around questions about your citizenship status, marital status, and religious beliefs.

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Pay less than the law requires

Krakenimages.com/Adobe african american woman folding hands frowning at laptop screen

The federal minimum wage is a mere $7.25 per hour. Generally, you are entitled to at least that much pay, although there are exceptions to the rule.

Many states have their own minimum wage requirements that are higher than the federal standard. In most cases, it’s illegal for any employer to pay their employees less than the hourly minimum wage in any particular state.

Pay under the table

Анастасия Семашко/Adobe man rubbing eyes in stress holding money

Employers can pay you in cash if they take out the required deductions and report the earnings to the government. However, your boss is prohibited from paying you in cash in an attempt to dodge reporting your earnings for tax purposes.

Don’t join forces with your employer and try to cheat the government. If you are caught earning money that you’re not reporting, it can lead to tax fines and penalties.

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Discriminate

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It is illegal for your employer to discriminate against you. This can take on many forms, including discrimination based on:

  • Race
  • Gender
  • Age
  • Religion
  • National origin
  • Disability status

Discrimination for any or all of these reasons is both unacceptable and illegal. In fact, it could be grounds for legal action against your employer.

Treat contractors as employees

Studio Romantic/Adobe man appears stressed while working at his desk in the office

Employers sometimes use independent contractors to keep costs to a minimum. That is because the company doesn’t have to pay benefits, overtime, any sort of severance package, and other expenses.

However, employers cannot classify workers as independent contractors yet treat them like employees.

The rules surrounding this distinction can be complicated, but one key rule states that an employer cannot tell an independent contractor when and how to work. Doing so makes the worker an employee.

Withhold a paycheck

Drobot Dean/Adobe angry business woman usine laptop

Not only is it unprofessional and unacceptable for an employer to withhold your paycheck, but it’s also illegal in most cases.

If you’re providing a service for an employer and exchanging your time for financial compensation, you’re supposed to be paid in full and on time for your work.

Treat workers differently due to age

Gorodenkoff/Adobe female manager explaining work on monitor to senior businessman

Ageism is a form of illegal discrimination in the workplace. It occurs when an employer discriminates against you solely based on your age.

The Equal Employment Opportunity Commission cites the example of a retail manager who assigns older employees to work only with senior customers.

Laws around age discrimination typically apply to employees who are 40 or older.

Retaliate against workers

Mongkolchon/Adobe female boss throwing papers in air while standing in conference room

It is illegal to retaliate against employees for engaging in protected activities, such as filing a complaint about discrimination or reporting illegal behavior by other employees.

Every employee can exercise their legal rights in the workplace without fear of being punished for doing so.

Harass workers

Alexis Scholtz/peopleimages.com/Adobe

Harassment can make it difficult to complete your day-to-day work responsibilities. Examples of harassment include:

  • Creating a hostile work environment
  • Making an employee fearful of speaking out about mistreatment
  • Sexual advances

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Fail to provide accommodation for disabled employees

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According to the Americans with Disabilities Act, employees are entitled to reasonable accommodation if they are disabled. Employers who fail to make such accommodations are acting illegally.

Employers must make reasonable accommodations so that disabled workers have an equal opportunity when they apply for a job, according to the U.S. Department of Labor.

In addition, the company must make accommodations that help disabled workers perform their jobs and partake in the benefits and privileges of employment.

Examples of reasonable accommodation could include providing special equipment to perform the job or modifying schedules if necessary.

Bottom line

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There are laws that protect you as an employee, and they should be respected at all times.

While maintaining a positive relationship with your employer is important, you should never feel you are being taken advantage of as an employee. 

It is essential to be aware of unethical and illegal behavior or actions by your employer and to speak up when it’s necessary. Knowing your rights can help ensure you are treated in a way that allows you to build a career and build your wealth with dignity.

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Author Details

Adam Palasciano

Adam Palasciano is a personal finance-obsessed and money-savvy individual who loves to hash out content on all things saving money. He specializes in writing millennial-friendly personal finance content, covering topics ranging from trending financial news, debt, credit cards, cryptocurrency, and more.