From time to time when I meet wonderful people in my life, I find myself telling them I’d hire them if I owned a business. To me this is a great compliment because owning a business is very personal, so inviting someone into that company is saying a lot about how you feel about them. Kind of like when I meet terrible people, I tell them I’d fire them out of a cannon into the sun. Hiring the right people for a business is obviously so important. But it is equally important to take steps to protect your business should the relationship with an employee turn into something reminiscent of an episode of Judge Judy or even Maury Povich. The following are some points to consider that will protect you when adding employees to your small business.
First, it is important to determine who is an employee and who is an independent contractor based on the IRS guidelines (See IRS form SS-8). There are a lot of differences between an employee and independent contractor (beyond who gets to attend the company Christmas party). Figure out which relationship works best for your company by differentiating the two roles.
Second, draft an Employee Handbook to establish policies to minimize risk of wrongful termination and discrimination claims. For example, dress codes are a great way to ensure you are sending a clear message that yoga pants are not appropriate for anyone with facial hair.
The third way to protect your company is to post the required employee disclosures at the office. Anything from health and safety postings to minimum wage postings can be required. It is important to figure out what is required of your business so employees know their rights if they wish to report a health or safety issue. For example, as a NICU nurse I learned from my lawyer, Elliott Stapleton, that dirty diapers are not considered a safety violation. Agree to disagree.
A business must protect its assets, which include its people and trade secrets. This is why it is important to create documents such as non-compete and non-solicitation agreements for key employees to make sure other companies don’t steal all of your talent and ideas. I’m sure this is why no one from McDonald’s has left the company to join up with a former Pizza Hut employee in order to create a Big Mac Pizza store, which I think would be delicious.
Hiring the right employees is paramount to running a business. But the aforementioned points are almost as important to keeping your business safe and intact. There is enough to worry about when running a business. Having a lawyer like Elliott Stapleton on your team makes this process so easy you can spend your valuable time deciding who to hire and who to fire (out of a cannon into the sun.)
_ At some point, every employer will have to terminate an employee. To avoid claims that the termination was based on discrimination or was without just cause there is a clear procedure that should be followed to avoid future, unnecessary costs and attorney’s fees.
How do you limit potential discrimination claims?
You can discharge an employee at any time for any reason, except for prohibited reasons. Generally, those prohibited reasons are: Religion, Gender (including pregnancy), Age, Race, Political beliefs, National origin, Disability, Retaliation for an otherwise legal act such as: asserting overtime rights, reporting that the employer is breaking the law (“Whistle Blowing”), or making a worker’s compensation claim
There is no way to see inside of an employer’s mind to determine why he or she fired an employee, the evaluation is by actions and the result of those actions. To ensure your true reasons for firing an employee are clear, it is important to document all reprimands and maintain an Employee Handbook.
Elliott Stapleton Attorney with CMRS Law