Job creation drives the American economy. Citizens are looking to business leaders to provide opportunities, and put Americans back to work. However, taking on the role of employer comes with certain responsibilities, and if you’re not cautious, potential pitfalls. As an employer it is your responsibility to create a work environment that is fair to your employees and meets state and federal labor standards. This in itself is difficult. Now, add the challenge of meeting these goals in a manner that supports your business culture.
Most small business owners are protective of their culture. Taking steps toward having a legally compliant work place can feel like threat to their business identities. It is common for people in small businesses to be very close and feel like family. These relationships can lead to business leaders becoming lax about legal compliance. However, employment law is not sensitive to the strengths of these relationships. Employment law and the agencies that enforce it are largely concerned with protecting employees.
In 1991, the Civil Rights Act was amended and several important changes affected employers. The primary issue was that business leaders were made responsible for documenting policies and ensuring consistent enforcement of regulations. The reason for this change was to reduce issues related to discrimination in the work environment. This is language from the EEOC website explaining part of the amendment: “ The Act provided that where the plaintiff shows that discrimination was a motivating factor for an employment decision, the employer is liable for injunctive relief, attorney’s fees, and costs.” You can find more information on the Civil Rights Act of 1991 at the EEOC web site.
The first step in becoming compliant with labor law is informing your employees about their rights. This requirement can be satisfied by displaying state and federal labor posters in an area accessible to all employees. Ideal posting areas include, near the coffee maker, water cooler or copy machine. You can order these from any number of online sources, or print them for free from the Department of Labor website. These posters are updated as needed. Employers must check for updates on a regular basis.
The expectation of employers to put up labor posters is indicative of what the Department of Labor expects in general – constant communication. In the eyes of the court, documentation is proof that communication occurred between employers and employees. The most effective method of both documenting the exchange of information and communicating your business standards is to provide an employee handbook.
Think of the handbook as having two parts. Part one is the state and federal labor laws that affect a business based on its size. A common mistake made by business owners is using another company’s handbook as a model for their own. This is a risk because the specific rules vary depending on the industry and the total number of employees. The Department of Labor enforces these rules, and failure to comply will result in fines ranging from a few thousand to tens of thousands of dollars. For some small business, fines of this size are a major risk to the future of the business and to the jobs the employees enjoy.
The second part of the handbook largely defines the rules created by the business owner. Issues like the dress code, smoking, cell phone use and the use of social media are some common topics. However, the owner must be aware of any labor laws that could impact his or her own policies to successfully craft this set of rules. The Small Business Administration offers resources that can help you get started.
Handbooks are living documents and they need to be updated. New laws are ratified, and courts change the way laws are interpreted as cases are ruled upon. Finding a source of information that allows you to maintain a set of legally compliant business policies is essential to protecting your business. This is an investment in the long-term viability of your business. Find a professional that has access to the latest information and takes a proactive approach to your compliance efforts.
My employer, Paychex, has been helping small business leaders maintain compliance since 1971. We have contracted with Fisher & Phillips, a national labor law firm, to enhance our level of service. Click here to see Fisher &Phillips’ employment check list. This list is a great starting point for employers who want to begin working toward stronger compliance.
Michael Oberther is a passionate supporter of small business. Much of his time is spent brainstorming with business leaders, working to find creative ways to help small business succeed. His other passion is connecting people who have mutually beneficial interests. Michael knows that no obstacle can stand against a team of great people; sometimes they just need a little help finding each other.
Article originally appeared in the March 2012 Lioness
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