For countless entrepreneurs, working with employees is one of the major highlights of owning and operating their own business. However, with the advantages of employing workers come serious responsibilities and laws to follow, so employers should do everything in their power to make sure that they’re in compliance with all relevant regulations.
The first step is to determine who, under different statutes, qualifies as an employee. Definitions can range from open-ended—like the Occupational Health and Safety Administration’s (OSHA) explanation that an employee is someone who “is employed in a business of his employer which affects commerce”—or more detailed, like the definition under the Family Medical Leave Act (FMLA) that establishes employees as anyone on the employer’s payroll and even includes any laid off, suspended, or on leave personnel who are expected to eventually expected to return to work.
Once an employer can determine who their employers are, there are a number of common danger areas in employee relations to focus on. I’ll profile four below and four in a later post:
Under the widely-recognized principle of at-will employment, both the employer and employee are free to end the employment relationship whenever—for any reason or for no reason—as long as the cause is not illegal. Since most employers don’t arbitrarily fire employees, however, it is good practice to offer employees, even those at-will, the reason for their termination if they need to be let go.
Even employers in non-union workplaces still need to abide by the provisions of the National Labor Relations Act (NLRA) that lays down major guidelines for employer-employee relations and union activity. For example, employers of both union and nonunion employees are guided by the NLRB’s rules on regulating certain communications between employees. A violation of this policy or others, knowingly or otherwise, could lead to an intervention from the National Labor Relations Board.
Wages and Hours
Wage-related violations, especially in California, where they have become a “cottage industry,” are some of the most common pitfalls for employers. Employers may follow federal minimum wages, for example, in states that mandate a higher minimum wage, or they may think that salaried employees are exempt from overtime or minimum wage guidelines (while there are certain exceptions, most employees are not exempt). Additionally, proper meal periods and rest breaks are very complex and could lead to serious wage violations for the employer.
Hiring, Firing, Retention, and References
There are myriad policies that govern the hiring and firing of employees. To that end, employers should document all stages of the process and be sure to record their reasons for hiring and for not hiring an employee.
Additionally, responding to requests for references regarding previous employees who have been fired can be a complicated process with the potential for a lawsuit from both the previous employee (for defamation) and from the employer requesting information (for a failure-to-warn claim). To that end, employers should only respond to reference requests in writing and only with information that they can prove.
While this article is intended to serve as a guide, navigating the world of employer-employee relations can be much more complex. For help, contact me directly at Koppekin Consulting, Inc. by email at Stephen@KoppekinConsulting.com or by visiting my website.