Even if you are only employing a small team, you must abide by federal, state and local requirements governing your relationship with your employees. While certain requirements do not apply to an organization with fewer than 10 employees, you may want to start complying at the start, in anticipation of your future growth. Laws to consider include:
Hiring Laws:
- Candidate application and interview, including limits on inquiries
- Advertising
- Background checks and drug testing
- Work authorization and I-9 forms
- Agreements on deductions
Pay and Employee Benefits Laws:
- Minimum wage/overtime
- Commissions/bonuses
- Required notices/ tax deductions
- Health, Life, Disability Insurance (eligibility, dependents)
- Vacation/PTO/Safe and Sick Leave
- Autos, equipment, etc.
- Deferred compensation/retirement plans
- Equity offerings
Protocols for Managing Employees
- Employee handbook and policies
- Workplace safety/worker’s compensation
- Employee monitoring
- Conduct in the workplace
- Managing employee time out of the office
- Requests for disability accommodation
- Paid Sick leave/FMLA
- Workers Compensation Insurance / disability insurance (STD/LTD)
Discrimination Laws
Federal, state and local laws (such as New York City’s Administrative Code) prohibit discrimination based on race, religion, sex (some laws also protect sexual orientation), national origin and age. The Americans with Disabilities Act provides broad protection to the disabled. These laws also protect employees from discrimination in the terms of their employment, such as promotions and salary adjustments. A company entering the US must be aware of all discrimination laws in the jurisdictions in which its business will be located.
Protecting Proprietary Information and Avoiding Unfair Competition from Employees and Former Employees
- Common Law Duty of Loyalty (what is it and what are its limits)
- Confidentiality and Inventions Agreements
- Non-compete, non-solicitation agreements
- Asking New Employees About Obligations to Former Employers
- Equitable Enforcement Remedies
Termination of Employment
Although “at will” employment can be terminated for any or no reason, it is important to document rationale for termination before termination. Other considerations include:
- Use of Severance/release agreements (requirement of additional consideration)
- Timing of Paying final wages
- Any contractually Owed Termination Payments
- Owed unused vacation pay or commissions
- Unemployment Insurance
- WARN and Mini-Warn Obligations
Employment Related Claims and Potential Liabilities
You may also be more at risk of litigation as your workforce grows. It is important to familiarize yourself with employment litigation and dispute considerations, including:
- Breach of Contract claims
- Unlawful Discrimination/Harassment Claims (administrative claims and legal actions)
- Disability Accommodation Claims
- Whistleblower Claims
- Wage & Hour Claims
- Government investigations on wage/hour, I-9, or discrimination issues
Minimizing Liability from Employee Claims
Some ways to minimize liability and avoid costly litigation include taking proactive steps:
- Written policies promoting equal employment opportunity and providing for an internal claim procedure
- Uniformly applying written policies
- Use of Arbitration agreements
- Employment Practices Liability Insurance