Missouri employee benefits and HR rules

Is your organization compliant with Missouri's employment laws?

If you have a Missouri-based business or employ Missouri workers, learning everything you need to know about HR compliance in Missouri is vital. This guide will provide a general overview of Missouri's employment and benefit regulations for small to medium-sized businesses.

Topics covered in this guide include:

• What are employment laws in Missouri?
• What are employees’ rights in Missouri?
• Required and non-required employee benefits in Missouri
• Health insurance in Missouri
• Wage laws in Missouri
  
  

What are employment laws in Missouri?

The federal government sets minimum benefits and HR requirements for employers nationwide. However, many states create their own employment laws to offer additional employee protections—and Missouri’s no exception.

Before opening or expanding a business in Missouri, you must familiarize yourself with Missouri’s employment laws.

In Missouri, employers must follow several state-specific laws in addition to federal employment laws, such as:

• At-will employment
  • Missouri is an “at-will” employment state, meaning employers and employees can end an employment agreement at any time, with or without cause. However, by law, employers can’t terminate an employee due to discrimination or other illegal reasons.
  • Termination may be illegal if it violates a clear public policy mandate, such as whistleblowing, attending jury duty, or filing for worker’s compensation.
  • Employees who believe they experienced a wrongful termination may take legal action.
• Missouri Human Rights Act (MHRA)
  • This Act prohibits workplace discrimination against employees based on race, color, age, sex, sexual orientation, gender or gender identity, religion, national origin, pregnancy, genetic information, disability, child or spousal support withholding, military or veteran status, citizenship, AIDS/HIV status, or immigration status.
• Drug testing laws
  • Private employers are free to develop their own drug testing policies as long as they comply with federal law. However, contractors and subcontractors performing public works construction projects in public and charter schools must conduct random drug and alcohol testing.
  • If an employer has a legitimate cause to believe an employee used alcohol or non-prescription drugs at work or has a post-injury drug testing policy, the employee will lose their workers’ compensation benefits if they refuse to take a drug or alcohol test.
  • Recreational and medical marijuana is legal in Missouri. However, employers can prohibit the use of recreational marijuana in the workplace and can discipline or terminate employees who use marijuana at work.
• Missouri background check laws
  • Missouri employers must run background checks on healthcare providers, including individuals who work in nursing homes, medical treatment facilities, residential facilities, adult daycare organizations, and service centers operated or licensed by the Missouri Department of Mental Health.
• Missouri Equal Pay Act
  • This Act prohibits employers from paying women less than men in the same organization for the same quantity and quality of work. However, pay may vary based on seniority, length of service, ability, skill, difference in duties performed, hours worked, lifting restrictions, or factors other than sex.
• St. Louis’s “Ban the Box” Law
  • The law prohibits St. Louis employers with 10 or more employees from asking about a job seeker’s criminal history on applications. Additionally, job postings can’t include language that would exclude applicants with a criminal history from applying to the position.
• Kansas City “Ban the Box” Law
  • It’s illegal for Kansas City employers with six or more employees to inquire about an applicant’s criminal history until they interview the applicant and determine that they’re otherwise qualified for the position.
  • Employers may ask all applicants about their criminal history in the final stages of the interview process.
• Smoking laws
  • Unless it interferes with job performance or business operations, employers can’t fire, refuse to hire, or disadvantage an individual regarding wage rates or terms of employment because the individual uses tobacco or alcohol products outside the workplace.
  • However, employers can provide health insurance coverage at a reduced premium or deductible for non-smokers. Religious organizations, church-operated institutions, and non-profit organizations that mainly promote healthcare are exempt.
• Child labor laws
  • The law prohibits children younger than 14 from working unless it’s in the agriculture or entertainment industries or a casual job, like babysitting, yard work, or delivering newspapers.
  • No children younger than 16 can work in hazardous conditions.
  • Employers must secure work certificates for children younger than 16 who work any job except in the entertainment industry during the school year. They must complete an entertainment industry permit for children younger than 16 who are working entertainment jobs.
  • Children aged 14 and 15 have work restrictions, including limited work hours and days if school is in session. Children age 16 and older don’t have any limitations.
• Workplace Accommodations for Nursing Mothers
  • Under the Fair Labor Standards Act (FLSA), employers must provide nursing mothers with breaks to express breast milk for one year after their child is born unless doing so places undue hardship on the employer.
  • They also must make “reasonable efforts” to provide a private location, ideally close to the employee’s workspace, for them to comfortably complete their task. Bathrooms and toilet stalls don’t meet the private location requirement.

Now that we’ve reviewed a few Missouri-specific laws, we’ll review Missouri’s employee rights.

What are employees’ rights in Missouri?

Missouri employees have many rights under state and federal law. Regardless of your company's size, you must know your employees' rights if you have or plan to hire workers in Missouri.

Some rights in Missouri include:

• Fair employee wages
  • Private employers must pay at least the state’s minimum wage and overtime compensation.
  • Public employers and employers in the retail or service industries whose annual gross income is less than $500,000 are exempt from paying the state minimum wage. However, they must pay at least the federal minimum wage rate of $7.25 per hour.
• Meal and rest periods
  • Missouri law doesn’t require employers to provide employees unpaid or paid meal or rest breaks. However, if employers allow them, breaks lasting less than 20 minutes must be paid breaks. Employers don’t have to pay for rest or meal periods lasting 30 minutes or more.
  • Minors in the entertainment industry are entitled to a set meal period for every 5.5 hours of consecutive work. They also must receive a 15-minute paid rest period after each two-hour period of continuous work.
• Employee right to privacy
  • It’s illegal for employers to listen to or record their employees’ communications unless the communication is with the employer or at least one person in the conversation consents.
• Occupational Safety and Health Administration (OSHA) compliance
  • OSHA is a federal agency that outlines safety measures and health standards for all employees at work. Employers can’t take adverse action against employees who report them for OSHA violations.
• Whistleblower's Protection Act of Missouri
  • It’s illegal for employers with six or more employees to take disciplinary action against an individual who reports a labor violation to the authorities. If their employer retaliates, the whistleblower has the right to sue and may receive back pay and reimbursement for medical bills related to the violation.
  • The State of Missouri, political subdivisions, higher education institutions, state-owned corporations, and religious organizations are exempt.
• Consolidated Omnibus Budget Reconciliation Act (COBRA)
  • COBRA gives employees the right to continue their employer-sponsored health coverage for up to 18 months after employment ends. This extended coverage also applies to any dependents on an employee’s plan, such as the employee’s spouse or children younger than 26.
  • Because of Missouri’s mini-COBRA law, all employers must offer continuation of coverage to their employees and their dependents.
  • Employers must provide an employee with a notice of their COBRA rights within 30 days of the triggering event.

• Missouri's Indoor Clean Air Act
  • This act prohibits smoking in the workplace unless it’s in a designated smoking area. The area can’t exceed 30% of the workplace, must have ventilation and physical barriers, and must have prominently posted smoking and no smoking signs in proper areas.

Health insurance coverage in Missouri

Federal law requires employers with 50 or more full-time equivalent employees (FTEs) to provide affordable health insurance with minimum essential coverage (MEC) and minimum value that satisfies the Affordable Care Act’s (ACA) employer mandate.

Even if the law doesn’t require you to provide health benefits, choosing to is a great way to attract and retain talented employees. Traditional group health insurance remains a popular option for employers. But, rising healthcare costs can make it challenging for small to medium-sized businesses on a budget to afford the premiums.

Small group health insurance premiums in some Missouri counties can get as high as $721 per month. In contrast, the average monthly premium for a 40-year-old on a silver individual plan is $594. In many rural counties, the average premium for a 50-year-old on a bronze plan is as low as $446 per month. Therefore, covering a Missouri employee’s individual health policy is generally more affordable for small employers than offering a group plan.

Here’s a look at the savings an individual plan can provide in some of Missouri’s most populated counties.

Employers interested in offering a health benefit can take advantage of Missouri’s lower individual plan prices by implementing an alternative health benefit, like a health reimbursement arrangement (HRA).

Health reimbursement arrangement (HRA)

An HRA is an IRS-approved health benefit that’s entirely employer-funded. It allows you to reimburse your employees, tax-free, for their individual health insurance premiums and qualifying medical expenses.

With an HRA, your employees choose the individual health insurance plan that suits their medical needs and budget. They can shop for a plan using a private exchange or the federal Health Insurance Marketplace.

Employers save money by not purchasing a group health insurance plan, not experiencing annual rate hikes, and only reimbursing their employees when they incur an approved medical care expense. HRAs are also tax-advantaged for employers as reimbursements are free of payroll taxes.

Some HRAs, such as the qualified small employer HRA (QSHERA), are only for employers with fewer than 50 FTEs. Others, like the individual coverage HRA (ICHRA), can satisfy the federal regulations for applicable large employers (ALEs). This makes an HRA a flexible health benefit that can work for employers of all sizes.

Learn more about each HRA

Wage laws in Missouri

Wages in Missouri are subject to various state laws. Below are the most important requirements you should know.

Minimum wage laws

Currently, the minimum wage for private employers in Missouri is $12.30 per hour. Each year, the state minimum wage will increase or decrease based on how much the cost of living has changed from the previous year.

Public employers may pay their workers less than the state minimum wage. But, the wage can’t be lower than the current federal minimum wage of $7.25 per hour.

Employers in retail or service businesses whose annual gross income is less than $500,000 are also exempt from paying the state minimum wage. They can set their own regular wage rate but must pay at least the federal minimum wage.

According to federal rules, certain employee classes—like administrative, professional, and executive workers—are exempt from overtime pay if their minimum salary is $684 per week or $35,568 per year.

Tipped wages

Currently, the tipped minimum wage is $6.15 per hour. If the employee’s base wages plus average weekly tips don’t equal the minimum hourly rate, the employer must make up the difference. If the employee makes more than minimum wage in tips, the employer doesn’t need to pay anything extra.

Tip pooling is legal in Missouri, so individual employers can require employees to participate in tip pooling or other sharing arrangements.

Prevailing wages

Under Missouri's Prevailing Wage Law, individuals who work on public works projects valued over $75,000—such as bridge, road, and government building construction—have their own minimum wage rate. Employers must list the minimum prevailing wage rate in their employer contracts for public works jobs. However, employees can negotiate for a higher pay rate.

The prevailing wage rate varies by county and type of work. The Missouri Division of Labor Standards releases an Annual Wage Order by July 1 every year, listing the prevailing wage rate in each county for applicable public work categories for the following year. The State calculates the prevailing wage rate based on Contractor's Wage Surveys, which collect voluntary information provided from contractors about their projects.

Hours worked

Missouri laws don’t establish a minimum or maximum number of hours an employer may schedule or ask an employee to work. However, most employers must pay their employees for all hours worked, including time spent traveling during work hours for job-specific purposes.

Overtime pay

Missouri’s overtime requirements are similar to the federal overtime standards. Employers must pay employees an overtime rate of 1.5 times their regular pay rate for any hours they work more than 40 in a standard workweek. Seasonal and recreational establishment employees in Missouri only receive overtime if they exceed 52 hours worked in a given workweek.

Like the minimum wage and hour law, certain employee classes are exempt from overtime pay under federal regulations if they meet the minimum salary requirements.

Wage notices

An employer may reduce an employee’s wages if they give them written notice 30 days in advance and the reduction isn’t below the state minimum wage rate (or federal minimum wage rate for public and retail or service industry employees).

Employers don’t have to provide 30 days’ written notice if they ask the employee to work fewer hours or the employee switches to a different job within the company performing different duties.

Pay frequency and method

All employers must pay their employees at least semimonthly within 16 days of each payroll cycle. Employers may pay executives, administrators, professionals, salespersons, and individuals who receive commissions monthly. Late wage payments or withholding paychecks are illegal in Missouri.

Under Missouri law, employers may pay wages by check, cash, or direct deposit.

Pay deductions and statements

Employers may deduct pay in certain situations, such as cash register shortages, damage to equipment, deductions required by local, state, or federal law, and other similar reasons. However, deductions can’t bring an employee’s gross salary below the state minimum wage.

Employers must provide employees with a monthly statement of their pay deductions.

Recordkeeping

Missouri employers must keep accurate records detailing each employee's name, address, occupation, pay rate, total wages per payroll period, hours worked (per day and week), and any employee-provided goods or services.

Employers must keep these detailed records on file on or near their workplace for at least three years and make them available for inspection or audit upon request.

Final pay

When an employee separates from employment—regardless of how they left the company—they must receive their final paycheck on the day of termination. If they don’t get their final paycheck on their termination day, they can request it in writing by certified mail, and the employer must pay them within seven days. Employers that don’t pay unpaid wages within that time frame may be subject to pay an additional 60 days of the employee’s salary.

Unless otherwise stated in the employment contract or company policy, employees aren’t entitled to unused vacation time pay or severance wages.

Frequently asked questions