Human Resources and Employment Law
Hiring your first employee should never be done without first making some major decisions. A few of the questions you must consider include:
- How will you classify your employees?
- If you have a sales team, will they be commission-based and will that make them exempt for purposes of calculating overtime?
- What about mid-level managers—do they get overtime pay, and if so, at what rates?
- What about off-site workers—can they be independent contractors?
- Are you required to provide rest and meal breaks, and if so, at what intervals and at what rate of pay?
- Will you screen new employees?
- You may be able to do background checks, but what about searching Facebook or other social media sites for information?
- What can you lawfully consider when making a hiring decision, and what will get you in trouble?
The federal government has a long list of employment related regulations that you must observe no matter what state you live or work in. Add to that a separate list of state-specific labor laws, and your head might be spinning. Labor and employment cases are favored by plaintiffs’ attorneys because they are easy to win (or settle) and can be very lucrative. As an employer, your best protection is the knowledgeable advice of an experienced employment law attorney.
Here is a short, though not exhaustive, list of issues to consider when hiring new employees:
- Hiring: What can you ask during interviews? How can you investigate potential employees without breaching their privacy or unlawfully discriminating? What kind of background checks can you do, what consent do you need and what do you have to tell the applicant if you decide to hire or not?
- Avoiding misclassification: If you misclassify an employee as an independent contractor, you may have to pay up to $25,000 per violation.
- Wage and hours: Each state has its own minimum wage rules, along with rules around how to calculate hours, breaks and overtime.
- Employee leave: Both federal and state laws regulate certain types of leave, and they often overlap. You should understand when your business must comply with various laws and when each individual employee is eligible for protection.
- Avoid sexual harassment and discrimination: What might seem acceptable can get you into trouble. Knowing the law and teaching it to your employees is mandatory and important.
- Health and safety: OSHA. Workers compensation. Posted safety notices. Safe work environments. It’s all part of the challenge in owning and operating a business.
- Terminating employees: Understand when you can safely terminate employees and how to do it without creating a liability.
- Resignations: Make sure you take steps to protect your business, intellectual property and trade secrets with departing employees.
- Privacy: Are you going to perform background checks, drug tests, monitor emails and computer use or install security cameras?
- Employee handbook: How will you set up policies and procedures? It’s a great idea to protect yourself and make the “rules” clear for all employees, but make sure your rules don’t violate state or federal regulations or create a contract for employment.
- Miscellaneous tasks: Know ahead of time how and when you will conduct performance reviews, how you will discipline employees, conduct exit interviews, address requests for raises and more.
Since you are dealing with employees who have their own rights and legal protections, make sure you have the proper legal advice to get you started without making any avoidable and costly mistakes.