Employment Law Advice For Start-Ups

Most employees in the United States are employed “at-will,” meaning their employers can fire them for any reason or for no reason. Employees who work under employment contracts may have specific protections or procedures outlined in their contract.

It’s a good idea to run any employment decisions by an attorney, such as a layoff plan, changes in a company pension or other benefits, or any new hiring policies.
Classification Issues

One of the first things that any start-up should focus on in terms of employment law is ensuring that its employees are correctly classified. A worker’s classification has significant implications for their pay and taxes as well as their eligibility for company benefits, so it is crucial that it is done accurately.

The distinction between a salaried employee and an hourly worker, for example, has different ramifications under federal and state wage and hour laws, as does whether an exempt employee is eligible for overtime. The IRS is increasingly stepping up enforcement of the rules on these issues, and even a minor mistake could result in expensive back wages and penalties. An experienced employment attorney can help determine which factors to consider when classifying a worker. They can also review contracts to make sure that they provide the right indicia of independent contractor status. This can help avoid costly legal complications. This is especially important for nonprofits, which face additional financial risks if their workers are misclassified.

Most employment lawsuits are based on allegations that one or more workplace laws have been violated. These are commonly wage and hour disputes, such as unpaid overtime or misclassification of employees as non-exempt or exempt; discrimination and harassment, including sexual harassment; or whistleblower claims. Once a plaintiff has obtained a “right to sue” letter or exhausted other required administrative remedies, their attorney will draft a formal legal complaint. Then they will engage in a process called discovery, which involves sharing relevant documents and information and conducting interviews with key individuals. At some point in the proceedings, both sides will submit pre-trial motions, such as requests for summary judgment.

A lawyer can also review any employment-related agreements you routinely use with employees, such as employment contracts or severance agreements, to ensure they are legally sound. This is particularly important because a well-drafted agreement can help prevent costly litigation down the road. It is also wise to have a lawyer review any major employment decisions that will affect a large number of workers, such as layoffs or pension changes.

Employment contracts typically cover the length of an employee’s job, responsibilities, compensation and benefits, including vacation, sick and retirement. They may also include clauses specifying a method for dispute resolution and whether the contract is subject to specific state or federal law. Employment lawyers can review contracts and renegotiate their terms to improve the situation for employees. For example, a lawyer could help an employee advocate for more hours per year of pay or protections for intellectual property.

Unlike the guidelines included in employee handbooks, an express written contract is considered to be a legally binding promise between employers and employees. However, in some cases, an employment lawyer can argue that a contract has been implied due to verbal promises, company policies or other actions. These can include progressive discipline procedures, policies indicating that new hires are “permanent” after a probationary period, or statements implying that an employer has given up its right to fire at will.
Policies and Handbooks

Employee handbooks and policy manuals serve as valuable resources for companies looking to stay compliant with employment laws. They help employees, managers and leaders understand expectations while ensuring that everyone is working together in a mutually agreeable manner.

Policies in an employee handbook may include a statement that the employment relationship is at-will and is not a contract, a discussion of the company’s expectations for avoiding discrimination and harassment, and how concerns will be addressed. Other policy areas may cover safety guidelines, work from home/telecommuting options, vacation and sick time rules, and perks like expense reimbursements.

Using an employee handbook software tool like Blissbook, you can easily hide nitty-gritty details behind a “read more” button and create separate Manager Manuals to live alongside your employee handbook that only managers can access. This will give you greater control over content and reduce the risk of accidentally violating privacy or confidentiality regulations that would violate employment law.employment law advice

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