As a small business owner, do I need an attorney? There are many situations where your “gut” may serve your decision making process adequately, but far too often budget and/or ego minimize the sensitivity to understanding the legal component of human resources. Here is broad information to help enlighten your understanding and perspective.
Some background you’ll appreciate
When you began your business, you probably found that you had to wear many hats … expert in your field, marketer, sales person … and when success hits, recruiter. Over time, these hats will eventually include managing your human resources. It’s safe to assume that since you know your product or service, you are able to effectively market and sell it. However, managing the human resources of your business can be a bit more challenging. Further, it is in managing the human resources that legal ramifications of any mistakes can be costly.
So how do you ensure that you are doing the right thing from a legal standpoint? Do you need to pay an attorney for every question that crosses your desk that may impact the legal rights of a prospective or current employee? No … not necessarily. But to make sure that you are prepared, there are some key employment laws you should be familiar with to ensure that you are in compliance.
The laws outlined below are federal laws, so while it is good to brush up on these laws, you should also ensure that you are in compliance with any local state law as some may vary from state to state.
Legal Implications – HIRING
When it comes to hiring, know your way around immigration, as it is a reality in our country. For any business to be successful, it’s critical that its inside human resources match or pay attention to the market it is trying to bring in. The Immigration Reform and Control Act (IRCA) makes it illegal to hire and employ illegal aliens. As an employer, you must verify identification and workplace eligibility for all hires by completing I-9 Forms. Management should also recognize that it is illegal to discriminate against illegal aliens – either through harassment or subminimum pay – even if the immigrant was hired inadvertently.
Legal Implications – FAIR TREATMENT
Similarly, know the expectations in the workplace as it relates to job discrimination.
The bedrock of job discrimination was put in place in 1964, Title VII of the Civil Rights Act which prohibits you from discriminating in hiring, firing or pay based on a person’s race, religion, sex or national origin. It also prohibits sexual harassment.
As such, it is imperative that all employees and applicants are treated equally, without regard to their race, religion, gender or any other characteristics. Also, ensure that anyone that you bring on board to your company understands these expectations that puts them into practice. A safe and respectful workplace dictates that you do not tolerate any kind of harassment or discrimination from employees and or customers or vendors.
Also, as it relates to your employees, their age may put them in a projected category. The Age Discrimination in Employment Act states you cannot discriminate in any way against applicants or employees older than 40 because of their age. To be safe, ensure that you do not take a person’s age or proximity to retirement into account when making decisions on hiring, firing, pay, benefits or promotions.
Finally, as there may be existing or prospective employees in your organization who have a disability, seen or unseen, it is critical that you understand the Americans with Disabilities Act that was put into place in 1990. The Americans with Disabilities Act, also known as the ADAAA) prohibits job discrimination against qualified people with disabilities (i.e., those who can perform the job’s essential functions with or without a reasonable accommodation). This can be a very complicated law to apply in the workplace. In general, it is prudent to never immediately reject applicants because you think their disability would prevent them from doing the job. When hiring, try to use questions about the applicant’s ability to perform the job’s essential functions as opposed to questions that would reveal an applicant’s disability. Make sure that your management is also educated on the Act and on how help create reasonable accommodations for disabled employees.
As it pertains to current or prospective female employees, make sure that you are aware of and versed on the Pregnancy Discrimination Act (PDA). This Act prohibits job discrimination on the basis of “pregnancy, childbirth and related medical conditions.” This means that you cannot deny a job or promotion merely because an employee is pregnant or had an abortion. She also cannot be fired for her condition or retaliated in anyway.
Treat pregnant employees the same as other employees on the basis of their ability or inability to work. As an example, if you were to provide light duty for an employee who can’t lift boxes because of a back in jury, you must make similar arrangements for a pregnant woman.
Legal Implications – PAY
In reviewing the policies for your business, it is also critical that you understand the country’s primary wage law, the Fair Labor Standards Act (FLSA). This law not only sets the federal minimum wage (many states have higher minimums), but it also requires time-and-a-half overtime pay for hourly employees who work more than 40 hours in a workweek. The FLSA also limits the hours and type of duties that teenagers can work.
From a business owner’s perspective, you also must ensure that you know the type of employee you are bringing on – either exempt or non-exempt – and that for non-exempt employees, you must always pay them at or above the minimum wage and pay overtime when applicable. Each of your positions should be reviewed relative to whether they are hourly or salaried, so that you are applying the appropriate FLSA designation.
As it relates to pay, the Equal Pay Act (EPA) states employers cannot pay female employees less than male employees for equal work on jobs that require equal skill, effort and responsibility. Take the time to review your pay scales to get ahead of any complaints that may come in as it relates to gender and pay. Different pay for the same job title is fine as long as you can point to varying levels of responsibility, duties, skill requirements or education requirements. Ensure that you respond to all pay complaints and investigate them thoroughly.
Legal Implications – LEAVE TIME
Once your employees begin working for you, there will be occasion when they need to take time off. You should ensure that you outline all paid time off policies that you have for your business up front, but there are also other federal leave policies that you need to understand. Firs and foremost, the Family and Medical Leave Act (FMLA) states eligible employees – those with at least a year of service – can take up to 12 weeks per year of unpaid, job-protected time off for the birth of a child or adoption of a child or to care for themselves or a sick child, spouse or parent who has a “serious” health condition. The FMLA only applies to organizations with 50 or more employees. If your business is eligibly under the act, when your employees request leave, listen for requests that would meet the FMLA criteria. Employees don’t necessarily need to use the words “FMLA leave” to gain protection under the law. Also ensure that your managers know how to properly handle requests for leave.
You may also happen to hire an individual who may need to take military leave.
The Uniformed Services Employment and Reemployment Rights Act (USERRA) makes it illegal to discriminate against employees who volunteer or are called to military duty. Also, when a reservist returns from active duty tours of less than five years, you must reemploy them to their old jobs or to equal jobs. When a reservist returns, it would be in your best interest to not challenge their bid to get their job back as most courts side with employees in a dispute under this Act.
Legal Implications – WORKPLACE SAFETY
Finally, keeping your workplace safe for your employee is not only important and a good draw for prospective employees, it is the law. The Occupational Safety and Health Act (OSHA) require all employers to run a business free from recognized hazards. Check your work environment against the standards laid out under the Act, and ensure that you are providing a safe work environment for your staff, and point out any noticeable hazards or potential safety problems as soon as possible. It’s also a great practice to conduct monthly safety meetings and review safety policies.
While you don’t need to have a law degree to ensure that you are doing the right thing when it comes to recruiting prospective and managing existing employees, it is imperative that you have all your policies in a clear written document or handbook. Further, a basic awareness and knowledge of the laws and acts described above will go a long way to protecting your business. Knowledge is your best defense.