The Letter of the Law
Retailers need to stay well-informed and be proactive about employment law or run the risk of mistakes hurting their bottom line.
If you are a storeowner who has employees, you are almost certainly aware that employment-related lawsuits are routinely filed across the country against businesses of all sizes. But, do you know which laws cover your business? Do you know which employment law is widely considered the most “dangerous” for business owners? Are you aware there can be individual liability for some employment law claims—even against non-owner supervisors?
Employment law claims can be financially devastating for businesses. Even the so-called nuisance claims often end in the employer paying out several thousand dollars to make the claim go away, rather than paying tens of thousands to defend the claim through trial.
A Matter of Size
Generally, the number of employees you have on your payroll determines whether your business is subject to a certain employment law. For example, companies with 15 or more employees are subject to Title VII, the federal law that prohibits harassment or discrimination against many protected classes, such as race, national origin and gender.
For companies with 20 or more, you add the Age Discrimination in Employment Act, which prohibits age discrimination against anyone over the age of 40.
If your company has 50 or more employees within a 75-mile radius, you are covered by the Family and Medical Leave Act. These are just examples of federal laws—some states and local governments have laws that cover even smaller employers.
The Fair Labor Standards Act
Some employment laws apply irrespective of the number of company employees. The Fair Labor Standards Act (FLSA), for example, which covers wages and overtime, applies to the vast majority of employers, either through enterprise coverage (a business that grosses at least $500,000 annually) or individual coverage (an employee who is involved in interstate commerce).
The FLSA is widely considered the most “dangerous” of the federally based employment laws for employers. This is because the law is quite complex, and it is easy for even the most well-meaning employer to make a mistake. The damages from such a mistake can be significant, and liability can flow not only to the business, but also to individual owners and supervisors. If an employee is found to be owed back wages, that amount generally comes with liquidated damages attached, doubling the amount owed. Then, you also have to tack on the employee’s attorney’s fees, which often dwarf the back wages paid out to the employee.
All in all, it is critical for employers to be aware of the employment laws they are required to follow and to take proactive steps to ensure compliance. Having a solid employee handbook in place, routinely conducting audits of pay practices and properly training supervisors on the relevant employment laws are examples of how businesses can help reduce exposure and protect the bottom line.
Suzanne Boy is an employment lawyer at Henderson Franklin in Fort Myers, Fla. She is passionate about assisting her clients with all aspects of employment law and human-resources-related issues. Boy regularly assists her clients with employee handbooks, wage/hour audits, supervisory training and employee termination, leave and disciplinary issues. She strives to help clients proactively and cost-effectively resolve workplace issues. When litigation cannot be avoided, she represents her clients in all types of employment litigation. She frequently speaks to businesses and professional groups on various employment matters and serves as the lead writer of the firm’s employment law blog.