Running a business involves managing more than just products and services, it involves managing people. The relationship between an employer and an employee is governed by a complex web of federal, state, and local regulations known as employment law. Whether you are hiring your first staff member or managing a large workforce, understanding these laws is not optional; it is critical for the survival and growth of your business.
At The Franchise & Business Law Group, our experienced employment law attorneys help business owners navigate this legal landscape, ensuring compliance and fostering healthy, productive workplaces.
Who is this for:
- Business Owners & Entrepreneurs: Leaders who need to understand their obligations to their workforce.
- Franchisors & Franchisees: Operators navigating the unique “joint employer” risks inherent in franchising.
- HR Managers: Professionals responsible for implementing compliant policies and procedures.
- Startups: New companies looking to build a legally sound foundation for hiring.
What it offers:
- Risk Mitigation: Strategies to prevent costly lawsuits and government penalties.
- Operational Clarity: Clear guidelines for hiring, wage management, and termination.
- Employee Protection: Assurance that your workforce is treated fairly and legally.
- Business Stability: A solid legal framework that allows you to focus on growth rather than litigation.
Key Takeaways:
- Employment law is a broad field covering everything from hiring practices to workplace safety and termination.
- Ignorance of the law is not a defense; non-compliance can lead to severe financial and potential loss of good will or reputation.
- Some state laws may provide greater employee protections than federal laws, adding a layer of complexity for multi-state businesses.
- Partnering with a dedicated employment law firm is the best way to ensure ongoing compliance.
What is Employment Law?
Employment law encompasses the entire body of laws, administrative rulings, and precedents that govern the relationship between employers and employees. Its primary purpose is to mediate this relationship, ensuring that workers are treated fairly while providing employers with a framework for managing their business.
It covers every stage of the employment lifecycle:
- Recruiting and Hiring: Ensuring non-discriminatory practices during interviews and selection.
- The Working Relationship: Managing wages, hours, benefits, safety, and harassment prevention.
- Termination: Handling firing, layoffs, and severance in a legally defensible manner.
Because employment laws exist at the federal, state levels, the rules can vary significantly depending on where your business operates. An employment law attorney serves as your guide, helping you interpret these overlapping regulations.
Why Do I Need to Know Employment Law?
For a business owner, employment law is about protection. Protecting your employees from harm and protecting your company from liability.
Violating employment laws can result in devastating consequences, including:
- Class-Action Lawsuits: Especially common in wage and hour disputes or employee misclassifications.
- Government Audits and Fines: Agencies like the U.S. Department of Labor (DOL) and the Equal Employment Opportunity Commission (EEOC) can impose heavy penalties for violations of wage laws and antidiscrimination laws.This can include payment of attorney fees to the prevailing party.
- Good Will and reputation risk: Any public or internal finding of unfair labor practices or discrimination could destroy your brand’s image and make it difficult to recruit top talent.
By working with an employment law firm, you move from a reactive posture (defending lawsuits) to a proactive one (preventing them).
Types of Employment Law
Employment law is not a single code but a collection of various legal disciplines. Here are the primary categories every employer must be aware of:
Wage and Hour Laws
The federal fair labor standards act and similar state laws regulate how and when employees must be paid. They cover the federal minimum wage, overtime pay requirements (typically time-and-a-half for hours over 40), and the classification of employees as “exempt” or “non-exempt.” Misclassifying an employee as a salaried employee when they are not exempt or as an independent contract to avoid paying overtime is a common legal pitfall State laws may also have requirements on the timing of paying out employees and avenues to help employees if an employer is withholding wages with employment under state wage claim laws.
Anti-Discrimination and Harassment
Federal and state laws prohibit discrimination based on a protected class including race, color, religion, gender, pregnancy, transgender status, sexual orientation, national origin, age, and disability. Federal law applies if you have 15 – 20 or more employees. State law may have lower employee thresholds. This applies to hiring, firing, promotions, and daily treatment. Employers must also maintain a workplace free from based on a protected class including sexual harassment and a hostile work environment.
Employers also cannot retaliate against employees for opposing discrimination in the workplace or being part of an investigation related to discrimination or filing a complaint with the EEOC on discrimination. Retaliation can include anything related to the terms and conditions of employment, including reduction or withholding, discipline, harassment or termination or making the workplace so intolerable that the employee had no choice but to resign. of hours or title
Employers must also reasonably accommodate employees with known disabilities if the accommodations do not cause an undue hardship for employers.
Workplace Safety (OSHA)
The Occupational Safety and Health Act (OSHA) and analogous state laws mandate that employers provide a safe working environment free from recognized hazards. This includes providing n a safe workplace can lead to fines, penalties, investigations and legal exposure. Employers also cannot retaliate against employees that report a health or safety violation to OSHA or a similar state entity.
Employee Benefits and Leave
For employers with 50 or more employees, laws like the Family and Medical Leave Act (FMLA) grant eligible employees who have been employed for more than one year, up to 12 weeks of unpaid, job-protected leave for specific family and medical reasons within a year. Additionally, the Affordable Care Act (ACA) places requirements on larger employers to provide health insurance.Employers must also comply with the federal Employee Retirement Income Security Act (ERISA) which sets laws on the minimum standards for established retirement and health plans in the private industry.
Labor Relations
If your workforce is unionized, or if employees are seeking to form a union, the National Labor Relations Act (NLRA) governs the rights of employees to engage in collective bargaining and concerted activity. It also governs what employers can and can’t say that may dissuade an employee from unionizing or to collectively bargain which applies to all states. This can include policies or requiring employees not to speak about their wages to other employees or threats to employees if they seek to try and unionize.
Noteworthy Employment Laws
While there are dozens of statutes, a few key federal laws form the backbone of employment law and compliance:
- Fair Labor Standards Act (FLSA): Establishes minimum wage, overtime pay, recordkeeping, and child labor standards.
- Title VII of the Civil Rights Act of 1964: Prohibits employment discrimination based on race, color, religion, sex, or national origin.
- Americans with Disabilities Act (ADA): Prohibits discrimination against people with disabilities and requires employers to provide “reasonable accommodations.”
- Age Discrimination in Employment Act (ADEA): Protects certain applicants and employees 40 years of age and older from discrimination.
- Family and Medical Leave Act (FMLA): Provides certain employees with up to 12 weeks of unpaid, job-protected leave per year.
- WARN Act: Requires employees to receive 60 days written notice prior to a mass layoff if 50 or more employees are laid off at a single site and is at least 33% of the workforce at a single site or if 500 or more employees are laid off at a single site or if a entire department is closed. s
Remember, states often have their own versions of these laws that are stricter than the federal standards. Employment law lawyers can help you identify which specific statutes apply to your business location.
FAQ
When should I hire an employment law attorney? Ideally, you should consult with an employment law lawyer before a problem arises to prevent future exposre. We recommend seeking counsel when drafting your employee handbook, creating employment agreements, or establishing HR policies or if a serious human resources complaint arises that may give rise to a need for an independent investigation. If you are facing a complaint or lawsuit, you should contact an attorney immediately.
What is the difference between an employee and an independent contractor? This is a critical distinction. Employees are entitled to benefits, overtime, and tax withholding, while independent contractors are not. Misclassifying a worker can lead to massive fines. Control is the key factor: if you control when, where, and how the work is done, such as hoas well as performance, the software, hardware or other tools used, the worker is likely an employee. Our employment law attorneys can conduct an audit to ensure your classifications are correct.
Do employment laws apply to small businesses? Yes. While some federal laws (like the FMLA) only apply to businesses with 50 or more employees, many others (like the FLSA and various anti-discrimination laws) apply to businesses of all sizes. Additionally, state laws often have lower thresholds for coverage.
How can an employment law firm help my franchise? Franchising adds a layer of complexity regarding “joint employer” liability. An employment law firm with franchise expertise can help structure your relationship to protect the franchisor from liability for the franchisee’s employment decisions, while ensuring the franchisee has the tools to be compliant.
Navigating the complexities of employment law requires expertise and diligence. At The Franchise & Business Law Group, our dedicated team is here to protect your business and help you build a thriving workforce. Contact us today to schedule a consultation.
