For solo business owners or sole practitioners, dealing with employment law compliance is relatively straightforward, since they can largely avoid the complexities of hiring and firing employees. However, for larger businesses, hiring and managing employees, and removing them when needed, can be a difficult endeavor full of legal complexities. If you are considering starting a business or reviewing your obligations as a business owner, understanding the requirements of your state’s employment laws is of fundamental importance.
Legal issues involving employees can arise in virtually any circumstance, but there are certain times in the cycle of employment when the need for special attention is most apparent. It is at these times that business owners will want to take special care to make sure they are abiding by state and federal law. First, employers must be careful about how they hire employees. This includes both ensuring that they follow proper procedures for investigating and considering employment candidates, and determining whether they are using proper employment categorizations. Thus, for instance, employers must be careful not to violate expectations of privacy when inquiring about potential candidates, and not to discriminate against candidates on the basis of age, race, or gender, among other categories. Likewise, when working with part-time staff and independent contractors, employers must carefully follow the hourly requirements for these positions and any applicable tax categorization requirements.
After an employee is hired, employers must remain vigilant about the work environment they provide to employees, including ensuring that employees are properly compensated for their time and overtime, offered adequate breaks and leave time, and kept free from workplace harassment and discrimination.
Finally, if an employer wishes to terminate an employee, it must be sure to check the relevant laws of the state to determine whether grounds for termination are required, and how to properly document disciplinary action against an employee. Employers may also wish to carefully set forth their procedures for termination in an employee handbook or manual that is available to all employees.
While employment laws can vary greatly by state, there are several key federal laws that every employer should be aware of in order to avoid legal issues down the road. One set of these laws can be broadly termed anti-discrimination laws, and it includes the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), Title VII of the Civil Right Act of 1964, and the Equal Pay Act. Each of these laws requires employers to act in a certain manner in order to avoid discriminating against certain categories of individuals. Thus, the ADA and ADEA require employers to give due consideration to older employee applicants and disabled employees, including making reasonable accommodations when necessary. Likewise, the Equal Pay Act requires “equal pay for equal work,” and it prohibits gender discrimination in pay structures. More broadly, Title VII prohibits employers from discriminating against employees on the basis of race, color, national origin, religion, or gender.
Another category of important federal laws consists of those that require certain benefits to be provided to employees. Thus, all employers should be aware that under the Employee Retirement Income Security Act (ERISA), employers must abide by certain highly complex requirements when providing benefit plans, including health insurance, or retirement plans to employees. Similarly, the Family and Medical Leave Act mandates that employers provide employees with leave to attend to urgent medical issues, including attending to a serious health condition of a family member, or the birth or adoption of a child.
