U.S. employment law and regulations is one of the 14 HR functional areas in the SHRM BASK, and it also shapes the "best answer" in many situational judgment items. An option that sounds reasonable but violates the law is never correct.
This is a study review, not legal advice. Laws, thresholds, and agency rules change, and state or local laws may add requirements.
Why law matters on the exam
Expect two kinds of legal questions: direct knowledge items ("Which law requires…") and scenarios where the law is the hidden issue. The second kind is harder because the question may never name the law. Knowing coverage thresholds and core protections lets you spot the issue quickly.
Coverage thresholds cheat sheet
| Law | Generally applies to | Core idea |
|---|---|---|
| Title VII of the Civil Rights Act | Employers with 15+ employees | Bans discrimination based on race, color, religion, sex, and national origin |
| Americans with Disabilities Act (Title I) | 15+ employees | Bans disability discrimination; requires reasonable accommodation |
| Pregnancy Workers Fairness Act | 15+ employees | Requires reasonable accommodation for known pregnancy-related limitations |
| Genetic Information Nondiscrimination Act | 15+ employees | Bans use of genetic information in employment decisions |
| Age Discrimination in Employment Act | 20+ employees | Protects workers age 40 and older |
| COBRA | Group health plans of employers with 20+ employees | Continuation of health coverage after qualifying events |
| Family and Medical Leave Act | 50+ employees | Up to 12 weeks of unpaid, job-protected leave for eligible employees |
| WARN Act | Generally 100+ employees | 60 days' notice of covered plant closings and mass layoffs |
| Fair Labor Standards Act | Most employers | Minimum wage, overtime, recordkeeping, child labor |
| Equal Pay Act | Most employers | Equal pay for substantially equal work regardless of sex |
| USERRA | All employers | Reemployment rights for service members |
Anti-discrimination laws
Title VII
Covers hiring, firing, pay, promotion, and harassment. Know the two main theories: disparate treatment (intentional different treatment) and disparate impact (a neutral practice that disproportionately excludes a protected group). Retaliation against someone who complains or participates in an investigation is also prohibited. The Pregnancy Discrimination Act amended Title VII to cover pregnancy.
ADA and PWFA
The ADA requires an interactive process to identify reasonable accommodations unless doing so creates undue hardship. The PWFA extends accommodation duties to known limitations related to pregnancy, childbirth, or related medical conditions, even when they don't rise to a disability.
Adverse impact and the four-fifths rule
Under the Uniform Guidelines on Employee Selection Procedures, a selection rate for any group that's less than four-fifths (80%) of the rate for the highest group is generally treated as evidence of adverse impact. If 50% of one group passes a test and 30% of another group passes, 30 ÷ 50 = 60%, which falls below 80%.
Test yourself on this topic with realistic, scenario-based questions.
Start 50 Free Questions →Wage, leave, and benefits laws
FLSA
Nonexempt employees earn overtime at 1.5 times their regular rate for hours over 40 in a workweek. Exempt status depends on both a salary test and a duties test; job title alone never decides it. The federal minimum wage is $7.25 per hour, though many states and cities set higher rates.
FMLA
Eligible employees have worked for the employer for at least 12 months and at least 1,250 hours in the past 12 months, at a worksite with 50 or more employees within 75 miles. Leave can be taken for a serious health condition, birth or placement of a child, caring for a family member, and qualifying military exigencies. Military caregiver leave allows up to 26 weeks.
Equal Pay Act
Pay differences for substantially equal work must be based on seniority, merit, quantity or quality of production, or a factor other than sex.
ERISA and COBRA
ERISA sets standards for most private-sector retirement and health plans, including fiduciary duties. COBRA continuation generally lasts 18 months, with up to 36 months for certain qualifying events.
Labor, safety, and workforce laws
- National Labor Relations Act: protects employees' rights to organize and engage in protected concerted activity. This applies in non-union workplaces too, such as employees discussing pay with each other.
- Occupational Safety and Health Act: employers must provide a workplace free of recognized serious hazards (the general duty clause) and meet recordkeeping requirements that apply to many employers.
- Immigration Reform and Control Act: employers verify identity and work authorization with Form I-9. Section 2 is completed within three business days of the employee's start date.
- WARN Act: covered employers must give 60 days' written notice before covered plant closings or mass layoffs.
- USERRA: returning service members generally have reemployment rights, with cumulative service limits of generally up to five years.
How law appears in scenarios
- An employee mentions a medical issue while asking for time off. The issue may be FMLA and ADA, even if the employee never names either law.
- A manager wants to fire someone right after they complained. Think retaliation risk first.
- A company reclassifies roles to cut overtime costs. Check the FLSA duties test, not just pay.
- Employees are discussing wages on a group chat, and a manager wants it stopped. NLRA protections apply.
- A new hiring test passes far fewer applicants from one group. Run the four-fifths analysis.
In each case, the best answer usually protects the employee's rights, reduces legal risk, and follows a consistent process. For practice spotting these issues, try our situational judgment walkthroughs.
Note: This article summarizes federal requirements for exam preparation only and is not legal advice. Confirm current rules with the EEOC, Department of Labor, NLRB, OSHA, and USCIS.