There are a multitude of laws that tell us how we can and cannot treat our employees. Mistakes in this area can be very costly, in terms of both time and financial impacts. Human resources laws that apply to you will vary based on where you do business.  There are both Federal and State Laws that apply to your business. 

In addition, some cities have local ordinances as well. Here in California we have a lot of human resource laws that go well beyond the federal requirements. Make sure that you are aware of the specific laws that apply to you and to your business.  A summary of some of the high-risk employment law areas that you should be aware of are below. 

Watch Your Hiring Practices

Make sure that your hiring forms and systems follow legal requirements.  For example, take a look at all hiring documents, including the application form. Often times outdated employment applications ask illegal questions.  These applications were probably perfectly legal when the company started using them; however, the rules keep changing on us so make sure the forms you use are current. 

Stay away from illegal interview questions.  The easiest way to think about this is to remember that you can’t ask anything in the interview that relates to the “protected classes” in discrimination laws.

Watch what you say in the interview process.  Don’t make promises you can’t keep, or that might negate your “at-will” status (assuming that applies to your organization).  Don’t promise employees that “we get raises every year” or that “we never lay people off.” You don’t want that to come back to haunt you down the road.

Lastly be aware of your requirements under the Americans With Disabilities Act, and remember that you may have legal obligations to accommodate potential new hires.

Exempt or Non-Exempt?

Employment classification, whether you classify an employee as “exempt” or “non-exempt” from overtime and other wage and hour laws, is a hot area. The laws keep changing, and the cases keep happening.  Here is the bottom line.  If you improperly classify an employee as “exempt” you could be making a very expensive mistake.

Exemption classification is not up to the employee, or even up to you.  It has to do with the work the employee is doing. 

Employee or Independent Contractor?

It is important to be aware of the differences between an employee and an independent contractor. Mislabeling a worker as an independent contractor can create potential liability employment taxes and penalties, and liability for failure to fulfill the many legal obligations owed to an employee, such as wage and hour requirements.

Don’t Forget Wage and Hour Laws

Make sure to follow the wage and hour laws that apply to you.  The best example here is that of overtime.  Remember that you are required to pay your non-exempt employees for every hour they work, including overtime premiums. 

Manage Performance . . . Carefully

Performance management, in regard to compliance, includes things like performance documentation, performance evaluations, progressive discipline, and termination.  Managing your risk in this area includes always providing your employees with clear expectations and standards of performance, and enforcing policies and employee expectations consistently and fairly. Provide timely, direct and honest feedback to your employees on a regular basis, including regular performance evaluations.

Be clear with your employees about performance and conduct issues, using the appropriate corrective action steps.  Where it makes sense, provide a reasonable opportunity for the employee to correct the behavior, making sure the “punishment fits the crime.”  As you deal with performance issues watch for legal “red flags”, such as potential discrimination complaints.  Ask yourself if the employee could claim discrimination, and what you can do to negate that complaint. 

Always remember to document performance management activities.

Lastly, there are various laws that protect employees from being retaliated against.  These laws tell us that employers cannot take a negative employment action against an employee who has filed a complaint about them. You may have an employee that should be terminated, due to performance or other issues, who has previously filed a complaint of some sort. Of course you can still terminate them, however be very careful that the action you take is appropriate, and that your documentation backs you up.     

Get The Benefit

There are numerous legal restrictions in the employee benefits area, at both the Federal and State level.  For example, here in California it is illegal to have a “use it or lose it” vacation policy. 

One specific point in the benefits area to mention is employee leaves.  The leaves that you are legally required to provide will vary, based on your location and the number of employees. Be sure that you are familiar with the leave laws that apply to you based on the number of employees in your company

Is Your Workplace Discrimination and Harassment Free?

You are required to take steps to ensure that your workplace is free of discrimination and harassment.  Make sure that your employees are treated fairly and consistently, no matter what their race, color, religion, sexual orientation, physical or mental status, etc., and that your employees are treating each other without harassment and with respect.  The best way to meet these requirements is through effective and compliant policies, internal complaint procedures, and ongoing employee communication and training.  And don’t forget, here in California if you have 50 or more employees you are required by law to train your supervisors and managers every two years.

 The Bottom Line

Manage your team fairly and effectively following legal guidelines. Time and money spent now to ensure legal compliance is money well spent if you can prevent future legal costs....

Sr. Shelley Brott is a consultant with the Personnel Perspective in Santa Rosa, www.personnelperspective.com, 707-576-7653.  She has over 25 years experience in human resources, including serving as a division human resources manager for Pacific Gas & Electric Company. She is an active community volunteer and a graduate of Leadership Santa Rosa.