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 Often times outdated employment applications ask illegal questions.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.