Kentucky Labor Law Guide
The main sectors of the economy in the state of Kentucky include manufacturing, agriculture, healthcare, energy, and technology. Kentucky’s central location and well-developed transportation infrastructure and a strong presence of logistics companies make it a strategic hub for distribution. Kentucky offers various tax incentives and credits to attract and retain businesses.
Minimum Wage
$7.25
Overtime Wage
$1.5x Regular Wages
Meal Breaks
Not mandated
Rest Breaks
Paid if 20 minutes or less
The minimum wage in the state of Kentucky is $7.25 per hour in 2023, which is the same as the federal minimum wage.
The minimum wage in the cities of Lexington and Louisville is $8.20 per hour.
Overtime rules in Kentucky follow the federal Fair Labor Standards Act (FLSA). The act sets minimum wage, overtime pay eligibility, record keeping, and child labor standards.
Non-exempt employees in Kentucky get overtime pay for the hours worked beyond 40 hours in a week. The overtime pay is calculated at 1.5 times the regular hourly pay.
Exempt employees are not eligible for overtime pay. Exempt employees are typically salaried employees who meet specific criteria related to their job duties and salary.
Kentucky does not have state laws mandating meal or rest breaks for employees. Meal and rest break regulations in Kentucky generally follow federal guidelines outlined in the Fair Labor Standards Act (FLSA).
The FLSA does not require employers to provide meal breaks. However, if employers choose to provide meal breaks (typically lasting 30 minutes or more), they are not required to compensate employees during that time, provided the employees are completely relieved of their job duties.
Similarly, the FLSA does not require employers to provide rest breaks. However, if employers choose to provide short breaks (usually 20 minutes or less), they are generally considered compensable work time.
In unionized workplaces, collective bargaining agreements may establish specific provisions regarding meal and rest breaks.
Businesses with young employees also have to comply with the federal child labor laws, which require breaks for young workers.
Kentucky does not have any state laws requiring paid leave for employees. However, there are federal and state laws that may impact paid leave and time off in certain situations.
- The federal Family and Medical Leave Act (FMLA) applies to eligible employees in Kentucky. FMLA provides eligible employees with up to 12 weeks of unpaid leave in a 12-month period for specific family or medical reasons, including the birth or adoption of a child, the serious health condition of the employee or a family member, or certain military-related events.
- Kentucky does not have a statewide law requiring employers to provide paid sick leave to employees. In addition to the state and federal laws, employers should be aware of and comply with any local ordinances that apply to their business.
- Most Kentucky employers choose to offer paid time off as part of their benefits package. Employers may have their own policies regarding vacation, personal days, or other types of paid leave.
- If an employee is temporarily laid off or experiences a reduction in work hours, they may be eligible for unemployment benefits through the Kentucky Career Center.
- Collective Bargaining Agreements: For employees covered by collective bargaining agreements, the terms related to paid leave and time off may be outlined in the agreement.
The classification of employees as exempt or non-exempt in the state of Kentucky is primarily driven by the federal law Fair Labor Standards Act (FLSA). The FLSA sets forth rules regarding minimum wage, overtime pay, and exemptions for certain categories of employees.
Exempt Employees:
- Salary Basis Test: Exempt employees are typically paid on a salary basis, meaning they receive a fixed salary that is not subject to reduction based on the quality or quantity of work performed.
- Salary Level Test: Exempt employees must earn a minimum salary to qualify for exemption. The minimum salary for exemption is $684 per week.
- Duties Test: Exempt employees must perform specific job duties that fall into one of the FLSA’s exempt categories, such as executive, administrative, professional, or certain computer-related duties.
Non-Exempt Employees:
- Hourly Pay: Non-exempt employees are typically paid on an hourly basis and are entitled to overtime pay for hours worked beyond 40 hours in a workweek.
- Overtime Pay: Overtime pay for non-exempt employees is generally calculated at 1.5 times their regular rate of pay for each hour worked beyond 40 hours in a workweek.
- Employers must keep accurate records of non-exempt employees’ hours worked, wages paid, and other related information.
Kentucky does not have its own state-specific Equal Pay Act. Employers in the state need to follow the federal Equal Pay Act of 1963 (EPA).
- Equitable Work: The EPA requires employers to pay the same wages irrespective of employees’ gender for substantially similar work.
- The EPA prohibits retaliation against employees who assert their rights under the Act.
- Kentucky has its own anti-discrimination law, the Kentucky Civil Rights Act, which covers various aspects of employment discrimination. While it doesn’t specifically address equal pay, it prohibits discrimination based on race, color, religion, sex, disability, national origin, and age..
- In addition to the EPA, employers must also adhere to Title VII of the Civil Rights Act of 1964 that prohibits discrimination based on race, color, religion, and national origin.
In Kentucky, employment relationships are generally considered “at-will,” meaning that either the employer or the employee can terminate the employment relationship at any time and for any lawful reason, with or without cause, and with or without notice. However, there are legal considerations and protections for both employers and employees.
While at-will employment allows for termination without cause, employers cannot terminate employees for illegal reasons, such as discrimination, retaliation, or in violation of public policy.
- Anti-Discrimination Laws: All Kentucky employers need to comply with federal anti-discrimination laws, including Title VII of the Civil Rights Act of 1964, that prohibits discrimination based on race, color, religion, sex, and national origin..
- Equal Employment Opportunity (EEO Employers should provide equal employment opportunities to all individuals regardless of their protected characteristics, and hiring decisions should be made based on merit and job-related criteria.
- Background Checks: Employers in the state of Kentucky may conduct background checks on job applicants, but they must comply with federal and state laws, including the Fair Credit Reporting Act (FCRA) and anti-discrimination laws.
- Work Eligibility Verification: All employers in Kentucky are required to verify the work eligibility of employees through the Form I-9 process in compliance with federal immigration laws.
- Final Paychecks: Kentucky requires employers to pay an employee’s final paycheck by the next regularly scheduled payday.
- Unemployment Compensation: If an employee is terminated, they may be eligible for unemployment benefits through the Kentucky Career Center.
- WARN Act: The federal Worker Adjustment and Retraining Notification (WARN) Act may apply to employers with 100 or more employees, requiring them to provide advance notice of plant closings or mass layoffs.
It is important for employers to remain well-informed about changes in employment laws and to seek guidance from legal professionals to ensure compliance with the latest regulations. It’s advisable to establish clear and meticulously documented employment policies and procedures to aid employers in complying with the labor laws.
