As we find ourselves in the last quarter of 2024, we felt it was right to go back to the basics for those navigating the complex landscape of employment law. Understanding these laws helps to protect your business from legal disputes and fosters a positive environment for employees while ensuring compliance and a fair and productive workplace.
Outlined below are some fundamental aspects of federal employment laws that every employer should be familiar with.
Hiring Practices
You must follow federal and state laws when hiring new employees. Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA) prohibit discrimination based on race, color, religion, sex, national origin, disability, or age. Ensure your job postings, interview questions, and hiring criteria do not violate these protections.
Conducting background checks is a common practice, but you must comply with the Fair Credit Reporting Act (FCRA) and state-specific laws, which require obtaining written consent from the candidate and providing them with a copy of the report if adverse action is taken. Some states also have laws that prevent employers from asking questions about criminal history or felony convictions before making a conditional job offer, so be sure you know the laws in any state where you are hiring.
Wage and Hour Laws
Compliance with wage and hour laws is critical to avoid lawsuits and penalties. Key details to know include the following:
- You must pay the minimum wage set by federal, state, or local laws, whichever is highest.
- Under the Fair Labor Standards Act (FLSA), nonexempt employees must receive overtime pay at one and a half times their regular rate for hours worked over 40 in a workweek.
- You must maintain accurate records of hours worked and wages paid to employees as required by the FLSA and state laws.
Some states have their own laws governing overtime pay, so familiarize yourself with the laws where you operate.
Employee Classification
Proper classification of workers is essential to avoid issues with taxes, benefits, and wage laws. It’s critical to note that misclassification can result in significant penalties. Other key details include the following:
- Exempt employees are not entitled to overtime pay, while nonexempt employees are. This classification depends on the employee’s job duties and salary level.
- Misclassifying employees as independent contractors can lead to liability for back taxes, wages, and penalties. Ensure that the worker’s role meets the criteria set by the IRS and relevant state laws.
Workplace Policies and Procedures
Having clear, written policies helps protect your business and provides employees with a clear understanding of your workplace expectations. Two recommendations include:
- Having an employee handbook. A comprehensive employee handbook should outline company policies, including attendance, conduct, antiharassment, and disciplinary procedures.
- Establishing harassment and discrimination policies. You are legally required to prevent and address harassment and discrimination in the workplace. Regular training and clear reporting procedures are essential.
Termination and Employee Rights
Terminating an employee can be a legal minefield if not handled properly. Priority details to note include:
- In at-will states, employers can terminate employees for any lawful reason. However, exceptions include discrimination, retaliation, or breach-of-contract claims.
- While not required by law, severance agreements can protect employers by including a release of claims clause, but these must be carefully drafted to comply with federal and state laws.
Takeaway
Employment law is an intricate field that covers all aspects of the employer/employee relationship. Staying informed about ongoing and proposed laws and regularly reviewing and updating your policies is crucial for legal compliance and fostering a positive workplace culture.
Above all, you should consider consulting with a legal professional to navigate these complexities and ensure you are fully compliant with all applicable laws.
Marlene Allen Murray is an attorney with Fennemore Law and can be reached at mallenmurray@fennemorelaw.com.