Clauss: Startups and small businesses, employment laws matter

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Clauss: Startups and small businesses, employment laws matter

Sun, 04/18/2021 - 4:50am -- tim

by Alexandra Clauss Running a business is not for the faint of heart. Startups are often faced with too much to do and too little time, but it is a mistake for your organization’s human resources strategy to be an afterthought. All businesses, regardless of size, must be proactive in complying with state and federal employment laws. This area of the law has evolved rapidly during the COVID-19 pandemic, and, as remote and hybrid work arrangements continue and will possibly become the new normal, businesses must invest time to stay apprised of the latest changes in state and federal employment laws and regulations.

Based on my experience working with startups and growing businesses, here are five important tips:

1.  Keep your head out of the sand.  Ignorance of the law, or claiming everyone else is doing it that (unlawful) way, is not a defense to violating an employment law. Many legal protections for employees cannot be waived by private agreement and apply to businesses regardless of their size.  For example, decisions on worker classification (employee vs. independent contractor; salaried vs. hourly) and certain types of benefits are dictated by the law and are non-negotiable. Organizations of all sizes must be proactive about employment law compliance.

2.  Be thoughtful and consistent.  Beyond legal compliance, consider what type of culture you want to create and the type of worker you want to attract and retain.  Adopting and following consistent, equitable practices will benefit your business.  Compliant, inclusive policies help employees understand what is expected from them and what they can expect in return.

3.  Invest in experts. Every business should determine who will oversee human resources issues and make sure they have the training and resources they need; yet, a business should also rely on an expert when needed.  Litigation and audits are unpleasant—they are time consuming, costly, risky, and can drain employee morale and your reputation. A conversation with an experienced employment attorney can help you identify and correct issues before you are facing a legal claim or strategize managing a potentially adverse situation you are facing.  

4.  Recognize what you don’t know.  State and federal employment laws are numerous, detailed, and often nuanced.  How an employer responds to employee requests can get them in trouble. For example, if an employee asks for a type of leave the manager has never heard of, they should not decline or ignore the request without looking into it.  If you are not certain you know the answer, a good response to an employee is, “That’s a good question/thank you for your request. I am going to check on that and get back to you soon.” Then, if you cannot find the answer, check with an expert.

5.  Remote workers have special considerations.  We are fortunate to have access to technology that allows many employees to work remotely.  However, businesses need to be cognizant that it is the law of the state where the employee is working that will generally apply to the employment relationship, irrespective of the business’ state of incorporation or headquarters. If an employee will primarily be working from their home or a residence in another state, that state’s law may apply to their employment and impose specific obligations on a business that cannot be waived by agreement. 

Many employment laws impose individual liability for non-compliance. As a business owner, it is your responsibility to keep informed of and comply with state and federal employment laws. Having a strategy for employment law compliance can help keep your business out of legal hot water, and it is an important piece of the puzzle for being a great place to work.   When in doubt, call an expert for advice.

Alexandra Clauss is an Attorney and Shareholder with Primmer Piper Eggleston & Cramer PC in Burlington. Her practice is devoted to advising businesses on employment laws and human resources issues.