Some Dos and Don’ts of Employment Law

Employment laws can affect almost every aspect of your interactions with prospective, current and former employees. Small business owners often overlook employment regulations and potential legal issues because they only have a small number of employees. According to the U.S. Department of Labor (DOL), it enforces more than 180 federal laws that cover about 150 million workers and 10 million workplaces, including those with even a single employee. In addition, every state has its own set of labor laws.  

Whether you’re making your very first hire or you have legal questions about existing employees, speaking with an employment lawyer is a smart move. Don’t wait for an employee to file a complaint or a government agency to conduct an investigation. The best time to speak to a business lawyer is right when you are about to hire your first employee. It is best to involve a lawyer to deal with an employee issue at the first sign of trouble rather than after it has become an expensive disaster.

Even if you have done nothing wrong in your view, a disgruntled employee may still file a claim for discrimination or an action for wrongful termination. At that point, the cost to your company will increase dramatically as you defend yourself from litigation and government investigation. Don’t be unprepared or reactive when faced with employment law matters. The Guidry Group can help you understand your rights and obligations as an employer and help to resolve a dispute if an issue arises.

The Fair Labor Standards Act states that all the time performing activities that are part of the employee’s job, including all the time during which an employee is required to be on duty, or on the employer’s premises, or at any prescribed place of work are considered hours worked. Employees who are allowed to work more than 40 hours per week are to get paid time-and-a-half for overtime pay. Some employees are exempt from the FLSA overtime requirements, including:

• Executives who manage two or more employees within a business or a department, and who can hire, fire, and promote employees.
• Administrative employees who perform specialized or technical work related to management or general business operation.
• Professional employees who perform original and creative work or work requiring advanced knowledge acquired through specialized study—for example, engineers and accountants.
• Outside salespeople
• Computer system analysts and programmers

Giving nonexempt employees the option to take compensatory time or extra paid time off is a violation of federal law. Nonexempt employees covered by the FLSA must be paid for all overtime hours worked and are not eligible for comp time. However, companies do have flexibility in providing comp time to exempt employees, but are not required to do so in most cases.

Another common way small business owners get into trouble is misclassifying workers as independent contractors to avoid:

• Paying payroll taxes
• Providing benefits, including workers’ compensation insurance coverage, unemployment insurance, or health insurance
• Paying minimum wage or overtime pay

Many times, both the employer and the worker would rather work under an independent contractor classification. However, neither a company nor a worker can simply decide that the worker is an independent contractor, even if both the company and the worker sign a piece of paper saying so. Federal and state agencies, including the IRS, state unemployment insurance agencies, and workers’ compensation agencies, have been cracking down on this scheme with increasing scrutiny in recent years. Because these agencies share information with each other, misclassifying workers as independent contractors can lead to a flood of government audits, penalties and fines that could put you out of business.

You may need to allow changes to the way things are normally done at work (reasonable accommodations) to applicants and employees with certain disabilities or religious beliefs, unless doing so would cause unreasonable difficulty or expense. This means an employer may have to make reasonable adjustments at work that will allow the employee to practice his or her religion, such as modifying a dress code to allow an employee to comply with their religious requirements or making alterations to a workspace to accommodate a wheelchair.

While federal law does not require that an employer provide employees with time off for meals and rest breaks, there are some states which have rules requiring companies to provide meal and/or rest breaks.

Under the Family and Medical Leave Act (FMLA), some employers must grant eligible employees up to a total of 12 workweeks of unpaid job-protected leave during any 12-month period for the following reasons:

• The birth and care of the newborn child of the employee.
• The placement with the employee of a son or daughter for adoption or foster care.
• To care for an immediate family member (spouse, child, or parent) with a serious health condition.
• To take medical leave when the employee is unable to work because of a serious health condition.
• Any qualifying exigency arising out of the fact that a spouse, son, daughter, or parent is a military member on covered active duty or call to covered active duty status.

The Occupational Safety and Health Agency (OSHA) requires employers to keep their workplaces safe and free from recognized hazards. An employer must report accidents resulting in death or hospitalization of employees. OSHA inspects workplaces both at random and when it has received a complaint of unsafe conditions. If a company has been found to be in violation of OSHA rules, the penalties and additional workplace standards can be substantial.

Many laws require you to display a poster at your business that describes the employment laws relevant to your business, such as discrimination laws or their rights under the OSHA.

Developing and distributing clear employee policies, updating the policies as needed, and consistently enforcing the policies may: help employees understand and comply with your rules and expectations; help prevent problems that may result in discrimination complaints; and limit your liability should a complaint arise.

You must keep employment records, such as applications, personnel, payroll and benefits records, as required by law. Verifying that employees are legally authorized to work in the United States.

If you have 100 or more employees, or if you are a federal contractor with at least 50 employees, you are required to complete and submit an EEO-1 Report to the EEOC and the U.S. Department of Labor every year.

The law requires that payroll taxes must be withheld from an employee’s paycheck each pay period. In addition, an employer must pay for its share of payroll taxes, workers’ compensation insurance, and unemployment taxes. In some cases, employers must also provide other costs as well, such as paid time off, health insurance or professional liability insurance.