Graded vesting schedules must adhere to the guidelines set forth by the Employee Retirement Income Security Act (ERISA) to ensure fair and adequate benefits based on employees' years of service. Additionally, companies must comply with Internal Revenue Service (IRS) rules and regulations regarding tax implications and reporting obligations for retirement and benefit plans that include graded vesting schedules. Compliance with these legal and regulatory frameworks helps maintain the tax-advantaged status of benefit plans and avoid penalties.