What You Should Know About Labor Law
By Craig Wynne
It should be simple. If a job interview candidate is not qualified for the position for which you’re interviewing, you don’t hire that candidate. If an employee isn’t doing the job according to the company standard, you fire that employee.
However, current labor and employment laws make what should be a simple practice more complex. We spoke to Randy Perlmutter, Esq. of Kantrowitz, Goldhamer & Graifman P.C. of Chestnut Ridge, NY, and he had the following things to say:
Q: How has labor and employment law changed over the years?
A: Labor and employment law changes quite frequently, specifically the remedies for employees, as they have expanded over the years. One big issue is misclassification. There have been many lawsuits over the years where employees have been misclassified. They put in overtime and aren’t compensated properly according to the position, so they’ve filed lawsuits so as to get their pay.
Q: What advice would you have for small business owners so as to protect themselves from lawsuits?
1 – The key is to be very diligent in staying informed of the changes in employment law. Hire an outside counsel or have some internal mechanism that keeps you abreast of these changes.
2- I also advise my clients to make sure they’re hiring the right person for the right position. I recently had a case where a company made all their employees exempt from overtime without actually looking at their duties; they just paid them a flat salary, and there was a class action lawsuit.
3 – In addition, make sure you have insurance that covers lawsuits. Even if a claim is baseless, you have to defend it. Those companies without insurance pay out-of-pocket for legal fees, and if they lose the case, they pay punitive damages and legal fees for the other party.
4 – Finally, make sure your hiring manager or HR person is trained in asking appropriate questions, because one appropriate question, specifically with regards to age and lifestyle, can set you up for a lawsuit if you don’t hire the candidate.
What are some questions you frequently hear from small business owners?
Most of the questions I hear have to do with the scope and nature of employment. Many companies want to hire independent contractors so as not to incur social security taxes, and they want to know the major difference between an employee and an independent contractor. They ask me what the qualifications are for each so they can be sure they’re complying with the law as far as that goes.
My biggest piece of advice is for business owners to have outside counsel. If I understand the business and what the owner’s needs are, I can direct them to the proper way to develop a policies and procedures manual and advise them on contractual rules. Don’t look at attorneys as overall. Ultimately, I consider myself a partner with the business owner.