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Top Five Employment Policies All Small Business Owners Must Know

July 12, 2018

For a small business, the number of federal, state and local employment regulations that govern the workplace can be daunting. Are you and your organization equipped to navigate and maintain compliance in an ever changing (at times, confusing) legal environment? Scott Gire of Aureon HR in Greater Des Moines (DSM) explains best employment law policies.

Let’s take a short quiz:

True or False:

  1. Only businesses that employ unionized employees must comply with the National Labor Relations Act (NLRA).
  2. If an employee asks for time off to “take care of some family issues” but does not formally request leave under the Family and Medical Leave Act, you are not required to provide FMLA leave.
  3. There are no special legal considerations when terminating a group of employees due to a reduction in force that includes some that are over 40 and some that are not. 
  4. When utilizing a vendor to provide background screening on job applicants, it’s a good idea to add a request for consent to the bottom of the employment application form.
  5. A formal complaint needs to be made by an individual claiming discrimination for an employer to be obligated to investigate.

Each of these statements contains at least one “false” element. Small businesses can be vulnerable to making mistakes and may not have access to a labor and employment attorney. It is imperative that you have a general working knowledge of some the key federal, state and local regulations, as well as handbook policies, to aid in your employee communication and training.

National Labor Relations Act (NLRA)

It’s not just for unions anymore. Many employers are surprised to learn this. With a few exceptions, the NLRA applies to all private employers (with one or more employee) who are engaged in interstate commerce. 

Family and Medical Leave Act (FMLA)

FMLA is one of the most complex and misunderstood employment laws. It applies to private, state and local government, and some federal employers who have at least 50 employees within a 75-mile radius.  Already confusing, right?

Regarding false statement number two above, the employee does not need to specifically mention FMLA by name to put an employer on notice that a protected leave may be in order.

Age Discrimination in Employment Act (ADEA)

Put simply, this law protects individuals who are 40 years of age or older from employment discrimination based on their age. Only in very rare circumstances can age be a determining factor during the hiring or promotion of an employee.

When an employer terminates an employee or employees who are age 40 or older, there may be additional legal responsibilities toward them, even if younger employees are being terminated at the same time. 

Fair Credit Reporting Act (FCRA)

Regulations regarding background checks fall under this law. The FCRA ensures that an employer does not conduct a background check on any job applicant or employee without complying with a number of requirements.

It is fine to use an outside company to conduct the background checks. However, the employee or job applicant must be informed in advance and consent to such. The consent form must be a separate document than the job application.

Title VII of the Civil Rights Act of 1964

Under Title VII of the Civil Rights Act of 1964, it is illegal to discriminate against someone (applicant or employee) because of that person's race, color, religion, sex or national origin. It is also illegal to retaliate against a person because he or she complained about discrimination, filed a charge of discrimination or participated in an employment discrimination investigation or lawsuit.

Discrimination does not need to have been reported for it to warrant an investigation. It is the responsibility of all employed to remain attentive in monitoring for inappropriate behavior from one employee to another, either overtly or obscurely. 

Final Words

The cost of litigating matters related to employment practices and working conditions can be immense to a small business. Therefore, it is critical that you have the resources and handbook policies in place to keep you safe from violating any employment laws and to support you if a lawsuit does transpire. Do not lose sight of any state and local laws related to these federal regulations that may require additional steps to comply. It’s complicated!   

Learn about other Staffing & Hiring resources for your small business in The Partnership’s Small Business Resources Hub or sign up for the Small Business Resources newsletter and stay connected for information about upcoming events, other resources and the latest announcements in the small business community in DSM.

Scott Gire

Scott Gire is an HR services area manager for Oasis, a Paychex® Company, in West Des Moines. He leads a team of HR professionals who consult with business leaders on strategic initiatives.