Guide to Wisconsin employee benefits and HR rules

Is your organization compliant with Wisconsin's employment laws?

If you have a Wisconsin-based organization or employ Wisconsin workers, learning everything you need to know about HR compliance in Wisconsin is crucial. In this guide, we’ll provide a general overview of Wisconsin's employment and benefits regulations for small to medium-sized businesses.

Topics covered in this guide include:

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

What are employment laws in Wisconsin?

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 Wisconsin is no exception.

The Wisconsin state government can fine employers between $10 to $100 per day for violating labor regulations. So, before opening or expanding your business in Wisconsin, it’s essential to familiarize yourself with the state’s employment laws.

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

• At-will employment
  • Wisconsin is an “at-will” employment state. Employers may hire, terminate, promote, demote, lay off, or suspend employees with or without cause. They can also set work hours and policies at their discretion. However, employers can’t terminate employees due to discrimination or other illegal factors.
  • Employees who believe their employer fired them illegally can file a discrimination claim.
• Wisconsin Fair Employment Law
  • This law prohibits employers with one or more workers from discriminating against any individual due to their sex, race, disability, age (40 and older), creed, color, national origin, ancestry, sexual orientation, marital status, arrest and conviction record, military service, use of lawful products (like alcohol or tobacco), and genetic testing.
  • The equal pay provision of this law also prohibits employers from discriminating against workers based on sex for jobs that use equal skill, effort, and responsibility in similar working conditions.
  • Employers are responsible for all discrimination and harassment, regardless of whether they knew it happened.
• City of Madison Equal Opportunities Ordinance
  • As an extension of the Fair Employment Law, Madison employers can’t discriminate against individuals based on lawful source of income, less than honorable discharge, religion, domestic partners, homelessness, physical appearance, political beliefs, student status, unemployment, credit history, status as a victim of domestic abuse, sexual assault, or stalking, retaliation, or refusal to disclose their Social Security number.
• Child labor laws
  • Wisconsin's child labor laws restrict a minor’s working hours, the times they may work, and the types of work they may do. Employers may receive penalties for employing a minor without a valid work permit or violating other child labor regulations.
  • The law prohibits the employment of minors younger than 11. Employers hiring minors younger than 16 must obtain a state-issued work permit. Except for a few exceptions, the state restricts minors younger than 18 from working wherever liquor is sold.
• Wisconsin Right-to-Work Law
  • Wisconsin is a right-to-work state, meaning no business, labor organization, or individual can require an individual to become or stay a labor organization member or pay union dues, fees, assessments, or charitable donations as a condition of new or continued employment.
• Wisconsin's Business Closing and Mass Layoff (WBCML) Law
  • All employers with 50 or more employees closing a business or performing a mass layoff must give 60 days' notice to the Wisconsin Department of Workforce Development, affected employees, unions, and the highest official in the town, village, or city where the business is located.
• Medical examinations
  • Employers may ask candidates and current employees to take medical examinations. However, they must cover the cost of required examinations if they’re a condition of hiring or continued employment.
• “One Day of Rest” Law
  • Employers must give all employees working in a factory or retail company 24 consecutive hours of rest each calendar week. However, the law doesn’t require the employer to provide a day of rest every seven days.
  • For example, an employer can give employees the first Sunday in a two-week period off but then have them work through Friday of the following week, as long as they have that Saturday off, which satisfies the one rest day per week minimum.
  • Certain job positions and employees who state in writing that they voluntarily waive the 24 hours of rest period are exempt.
• Social Media Law
  • It’s illegal for employers to access an employee’s or applicant’s social media accounts. Employers can’t refuse to hire, discharge, or discriminate against an applicant or employee for refusing to provide access to their personal accounts.
• Salary history and background checks
  • Unlike in many other states, employers can ask job applicants and employees about their salary history to determine employment.
  • Employers can also perform background checks on job applicants and employees. However, employers must inform candidates in writing and receive written consent before running the background check.
• Arrest and conviction check laws
  • It’s illegal for Wisconsin employers to make employment decisions based on an applicant's arrest or conviction record.
  • Employers can’t create a blanket rule stating that they won’t consider individuals with an arrest record for employment. They can only refuse to hire an applicant if they have a conviction substantially related to the job.
• Workplace accommodations for nursing mothers
  • Wisconsin doesn’t require employers to give nursing mothers breaks to express breast milk. However, the state must follow federal Fair Labor Standards Act (FLSA) regulations regarding these workers. Under the FLSA, employers must give nursing mothers breaks to express breast milk for one year after the child’s birth in a private space. Toilet stalls don’t meet the private space requirement.

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

What are employees’ rights in Wisconsin?

Employees in Wisconsin have many rights under state and federal laws. Regardless of your organization's size, you must know your employees' rights if you have or plan to hire employees in the state.

Some state rights include:

• Fair wages
  • Employers must follow federal minimum wage requirements and overtime laws.
• Meal periods
  • The law doesn’t require employers to offer their adult workers meal periods. However, the state recommends that employers give employees a 30-minute or longer break for meals. Employers must pay workers for rest periods that are shorter than 30 minutes.
  • Minors younger than 18 who work six consecutive hours must receive a 30-minute break close to the standard meal times of 6:00 a.m., 12 p.m., 6 p.m., and 12 a.m. If not during these times, the break must be near the middle of the shift.
• Rest periods
  • The law doesn’t require employers to offer their workers rest periods or coffee breaks. However, if the employer chooses to provide them, employers must pay employees for rest periods shorter than 30 minutes.
• Wisconsin gun laws
  • An employer may prohibit an employee from carrying a concealed weapon inside their workplace. However, they can’t restrict an employee from carrying a concealed weapon in their privately owned vehicles, regardless of whether the car is parked on company property or used for company purposes.
• Seats for workers
  • Manufacturing, mechanical, and commercial businesses must provide seats for their employees when they’re not actively performing work duties.
• Cessation of Health Care Benefits Law
  • Wisconsin employers with 50 or more employees must provide 60 days' notice to any affected employees, retirees, or their dependents when eliminating their health benefits.
  • The law doesn’t apply to individuals who have involuntarily or voluntarily left the company or changed their existing health plan.
• Occupational Safety and Health Administration (OSHA) compliance
  • OSHA is a federal government agency that outlines safety and health standards for all employees in the workplace. Employers can’t take disciplinary action against employees who report them for OSHA violations.
  • The Wisconsin Department of Safety and Professional Services administers the state's federal OSHA compliance regulations.
• Access to personnel files
  • Employees have the right to view and copy their personnel records that their employer maintains. Employers must provide the documents within seven working days.
• Wisconsin smoking laws
  • Employees are entitled to a smoke-free environment in their workplace, including break rooms, cafeterias, elevators, employee lounges, restrooms, conference rooms, meeting rooms, and private offices.
  • Employers must hang non-smoking signs and no-smoking posters throughout the workplace.
• Consolidated Omnibus Budget Reconciliation Act (COBRA)
  • Eligible employees have the right to COBRA health coverage up to 18 months after employment ends. This extended coverage also applies to any dependents on the plan, such as the employee’s spouse or children younger than 26.
  • Wisconsin’s mini-COBRA applies to employers with fewer than 20 employees. These employers must also allow employees to continue their coverage for up to 18 months.

Health insurance in Wisconsin

The state and federal government don’t require Wisconsin employers to offer their workers health insurance if they have fewer than 50 employees. However, federal law requires business owners with 50 or more full-time equivalent employees (FTEs) to provide affordable health insurance with minimum essential coverage (MEC) to satisfy the Affordable Care Act’s (ACA) employer mandate.

However, even though you may have fewer than 50 FTEs, you should still offer health benefits. Adding a comprehensive health benefit to your benefits package is a great way to attract and retain talented workers.

Traditional group health insurance is a popular option for many U.S. employers. But, rising healthcare costs can make it challenging for small to mid-sized businesses on a budget to afford the costly premiums and annual rate hikes.

Small group health insurance premiums in some Wisconsin counties can get as high as $686 per month. On the other hand, the average monthly premium for a 50-year-old on a bronze individual health plan can be as low as $583. This makes covering the cost of individual health plans more reasonable for many small employers in Wisconsin.

Business owners looking to provide an affordable health benefit can take advantage of Wisconsin’s lower individual plan prices by implementing a health reimbursement arrangement (HRA) or a health stipend.

Health reimbursement arrangement (HRA)

An HRA is an IRS-approved, formal health benefit funded solely by the employer. It allows you to reimburse your eligible employees, tax-free, for their individual health plan premiums and qualifying medical expenses.

Employees can use their HRA to choose and purchase the individual health insurance plan that meets their healthcare needs and budget. Employers save money by not buying a group health plan, setting a fixed monthly allowance, and only reimbursing their employees when they incur an eligible medical expense.

Some HRAs, such as the individual coverage HRA (ICHRA), can satisfy the ACA’s regulations for applicable large employers (ALEs), making an HRA a health benefit that can work for businesses of all sizes.

Learn more about each HRA

Health and wellness stipends

With a health stipend, you can give your employees a fixed amount of money to help them pay for their medical expenses related to health conditions and insurance policy premiums. An employee health stipend isn't a formal group health plan, so you can customize your stipend and choose which costs are eligible for reimbursement.

You can offer as much stipend allowance as your benefits budget allows, and employees can purchase the medical items that work for them and their families. This increased flexibility makes stipends a more personalized option for organizations than group health insurance.

While stipends are taxable for employees, small businesses looking for a benefit that covers more than medical expenses—like mental health counseling, gym memberships, and fitness apps—can do so with a wellness stipend. Offering a health and wellness stipend together gives your employees comprehensive coverage for their overall well-being.

Wage laws in Wisconsin

Wages in Wisconsin are subject to various state laws. We've compiled the most essential requirements to know below.

Minimum wage

The minimum wage in Wisconsin is $7.25 an hour, which is also the federal minimum wage. Should the federal minimum wage rate rise in the future, Wisconsin will raise its minimum wage to match it.

All private and public employers in Wisconsin—regardless of size, industry, or city— must pay employees at least the minimum wage for all hours worked.

Employers may pay a subminimum wage to agricultural workers, camp counselors, golf caddies, and other employee categories. Employers must apply for a special license with the Department of Workforce Development (DWD) before paying a subminimum wage to individuals with disabilities.

Tipped wages

Employers must pay tipped employees a minimum wage of $2.33 per hour. If the employee’s tips don’t equal the federal minimum hourly wage, the employer must pay the difference to equal $7.25 per hour.

If an employee makes more than the regular minimum wage rate in tips, the employer doesn’t need to pay anything extra.

Overtime pay

Wisconsin’s overtime requirements are similar to the federal overtime standards. Employers must pay employees overtime of 1.5 times their regular pay for any hours they work more than 40 in a standard workweek.

Some occupations, such as executives, administrators, outside salespeople, and other professional employees, are exempt from overtime pay as long as they make at least $700 per month. Also exempt are agricultural workers, workers performing domestic services, and federal government agency employees.

Minors may receive overtime pay, but it depends on their age, the type of work, and if school is in session.

Prevailing wages

Wisconsin officials appealed the state’s prevailing wage laws in 2017. This means that Wisconsin agencies can no longer create or require a wage scale for a public works employment contract. Under the Davis-Bacon and Related Acts, the U.S. Department of Labor sets prevailing wage rates for state and federal projects.

Pay frequency and methods

Employers must pay all workers at least monthly, no longer than 31 days between pay periods. However, employers may pay loggers, farm laborers, and technicians quarterly. Unclassified University of Wisconsin employees are also exempt and can receive their wages according to the University’s internal payroll system.

Employers can choose a more frequent pay schedule, like a biweekly period, instead of the monthly requirement.

Under Wisconsin law, acceptable methods of payment include:

• Cash
• Payable checks
• Direct deposit or wire transfer
  • Employers can require their employees to accept their wages by direct deposit. But, there must be no cost to the employee to participate in a mandatory direct deposit.

Pay statements and deductions

Wisconsin law requires employers to provide each employee with pay statements each pay period indicating their total hours, regular rate, and the amount and reason for any deductions. If an employee requests a pay deduction of a personal nature, the employer can label it as "miscellaneous" on the pay statements to ensure privacy.

The following are allowable pay deductions under Wisconsin law:

• Deductions required by local, state, or federal law
  • This could include deductions for taxes, Social Security, FICA, and Medicare
• Court-ordered deductions, like creditor garnishments and child support
• Certain employee benefits, like premiums for health insurance, annuity, or life insurance

Employers may only make pay deductions for loss, theft, damage, or faulty handiwork if one of the following situations applies:

• The employee authorized the deduction in writing after the issue occurred and before the employer made the deduction
• A representative of the employee determined the employee was at fault and approved the deduction
• A judge found the employee guilty and liable for the loss, theft, damage, or faulty handiwork in a court of law.

Any employer who makes a non-authorized deduction from wages may be liable to pay the employee back for twice the deduction amount.

Pay claims

If the employee doesn’t receive their earned unpaid wages by six days after their regular pay date, they may file a claim with the DWD. Once the employee files a claim, the DWD will work with the employer to resolve it. There is a two-year statute of limitations for employees to collect wage claims.

Union members must go through the channels outlined in their contract before filing a wage claim with the DWD.

Recordkeeping

Employers must keep accurate records with the following information for each employee on file for three years:

• The employee’s name and address
• Date of birth
• Dates of hire and termination
• Time the employee’s shift began and ended each day
• Hours worked each workday and workweek
• Regular rate of pay
• Total wages per pay period
• Any pay deductions, including the reason for the deduction
• Output of the employee (if they received wages based on anything other than hours worked)
• The time each meal break period began and ended (if the lunch break was required or deducted from work time)

Final pay

When an employee separates from employment—regardless of how they left the company— they must receive their final paycheck no later than the employer's next regularly scheduled pay date. Sales agents who work on a commission basis are exempt.

If an employer terminates a worker due to a merger or liquidation, they must pay the final paycheck using the regular wage payment method within 24 hours of separation.

The law doesn’t require Wisconsin employers to pay out vacation, holiday, or sick pay. However, if the employer has an established policy at their company that doesn’t include a forfeit of benefits provision, they must pay the employee for any accrued, unused vacation, holiday, or sick pay.

Frequently asked questions