5 Employment Law Issues That Don't Require a Lawyer

The business world has changed in the last few years, and small businesses are still finding ways to cope with the new economy. Gig workers, independent contractors, and remote work have all become commonplace.

But just because a few things have changed doesn't mean small business owners must upend their entire businesses and start over. Although human resources legal compliance is as important as ever, there are things you can do without calling in the big legal guns. State and federal laws are available online; most issues only need common sense.

Here are five things that will keep your business HR compliant without needing legal advice:

1. Update Your Employment Policy

If you don't have an employee handbook and HR policy, now is the time to make them. Your policy should include employee benefits, minimum wages, and time off. Visit the U.S. Department of Labor (DOL) website to see which federal labor laws apply to your business. Not all laws apply to all small businesses.

Clear HR policies make it easier to bring in new hires, handle overtime and sick leave, and follow federal and state regulations. Your employment policy must obey federal and state laws on:

• Anti-discrimination
• Occupational Safety and Health Administration (OSHA) regulations
• Workers' compensation
• Minimum wage and overtime pay

You can find all this information on your state's department of labor or industrial relations website.

2. Consider Remote or Flextime Arrangements

Remote work has grown 44% in the past five years. Like it or not, remote work is here to stay. It may seem counterproductive to send your workers home, and in fact, there has been a drive to put workers back in the office since the end of the pandemic. But the benefits to smaller businesses, especially in an uncertain economy, are great and do not need legal help.

• Increased productivity. Your workers will not sit at home playing video games all day. They will work and get more done thanks to fewer distractions and less absenteeism.
• Improved retention. When your workers don't have to fight traffic five days a week or miss work because they can't find a sitter, they're less likely to quit. For you, that means fewer new employees and less time training replacements.
• Lower stress. Employee stress is the number-one cause of absenteeism and on-the-job illness today. When workers don't have to get up early to get the kids off to school and sit in traffic to get to work early, their stress levels go down. This translates to healthier workers and lower health insurance premiums.
• Reduced expenses. Having fewer workers in the office means lower overhead for rent, power, and equipment. For small businesses, downsizing office space is no small benefit.

Of course, not all small businesses can accommodate remote work. Flextime or shared time is another alternative. If your workers need flexibility in scheduling, consider dividing one full-time position into two part-time jobs. Remote or flex work aims to improve your work environment and increase productivity.

3. Review Your Hiring and Termination Policies

The Equal Employment Opportunity Commission (EEOC) requires all employers to follow good faith policies when hiring and firing workers.

Even in "at-will" states, you can't dismiss workers without cause if they have an actual or implied employment contract. Many states require proof of good faith in termination, meaning you can't fire someone right before their pension vests or they were due a big commission.

Hiring and firing policies must also follow federal and state anti-discrimination laws. You can't discriminate against workers based on their race, religion, gender, sexual orientation, or national origin. Other laws protect workers based on their age, actual or perceived disability, or pregnancy.

The laws that apply to most businesses are:

• The Americans with Disabilities Act (ADA)
• The Age Discrimination in Employment Act (ADEA)
• Title VII of the Civil Rights Act
• The Fair Labor Standards Act (FLSA)

State laws may be more restrictive than federal laws. You can find more guidance at your state department of labor websites.

4. Consider Hiring Independent Contractors

Small business owners have discovered new ways to get work done and reduce costs. The last few years have seen independent contractors becoming an essential part of the small business employment scene. Independent contractors provide staffing for single jobs where the company needs extra staff or special skills unavailable in the workforce.

There are pros and cons to hiring independent workers to fill gaps in your workplace. The benefits are readily available to employees who are already experienced in their fields. A contractor is not an employee. They work only for one job, so you save money versus hiring and training another employee.

But, there are risks to hiring a contractor. Review the IRS guidelines that define an independent contractor before writing and hiring a freelancer for your temporary job.

Misclassifying workers as contractors when they should be employees can happen when:

• You have too much control over the worker's time, location, or performance. A contractor typically does the job at their own pace, at their own job site, or with their own equipment.
• The worker is not free to pursue other opportunities. If your contract or agreement limits the contractor's ability to carry out other jobs, they are employees, not contractors.
• You are giving additional compensation besides pay. A contractor agreement should contain nothing but payment for work done. Some long-term contracts include reimbursement for travel or materials. But contractors carry their own health insurance, buy their own equipment, and so on.

This matters to the small business owner because there are severe penalties for misclassifying workers as independent contractors. Besides the unpaid taxes, you can be liable for civil penalties under the Fair Labor Standards Act. File IRS form SS-8 if you need more help.

5. Review and Revise Your Health Care Policies

Small business HR policies tend to be more informal than those of larger businesses. A 50-person facility won't have a large HR department handling employee benefits and sick leave. That doesn't mean it isn't just as important.

Employee burnout is one of the top reasons for turnover. Workers report feeling overstressed by employers and managers who pressure them to put in more than their scheduled time and insist that they come to work even when they or their family are ill.

The Family and Medical Leave Act (FMLA) guarantees eligible workers up to 12 weeks of unpaid leave to care for family members with medical issues, to recover from illness, or to bond with infants or adopted children.

There are few requirements for HR compliance with the FMLA. There are no recordkeeping or filing duties. If you want to make it part of your company policy to encourage workers to stay home if COVID-19 or flu has hit their families, so much the better.

Businesses with more than 50 workers must offer all full-time workers health insurance under the Affordable Care Act mandate. You can avoid any HR compliance issues in this area by contacting the ACA website for more resources.

Embrace Technology, and Stay Current With New Regulations

If your small business doesn't have a human resources department, do the next best thing and invest in an HR software program. There are many good systems available for reasonable prices. These automatically update changes to federal, state, and local regulations. The software also helps with other HR functions, a plus for small offices.

If you have specific legal questions, don't hesitate to contact an employment law attorney in your area.