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When it comes to running a functional and productive workplace, drugs and alcohol can cause any number of problems: lost productivity, excessive time off, workplace accidents, employees behaving badly while under the influence, etc. As we keep reiterating in this series, as an employer, you can be held vicariously liable for everything that your employees do when they are acting in the course and scope of their job duties. And if you think this is just a problem for someone else’s small business or non-profit, think again. Statistically, substance abuse is more of a problem at smaller businesses than larger ones precisely because small businesses are less likely to have drug-free workplace policies in place.[1]
Add in the trend towards legalizing marijuana and small businesses can find themselves caught in a tough place. There’s a tension between being a “friendly” small business employer and making sure your employees can do their best work. After all, you’re not trying to be traditional, “stuffy” corporate America, but you don’t want to face a lawsuit caused by an employee’s bad behavior (especially one caused by an employee being under the influence while on the job).
There are a wide range of laws that cover how you as an employer treat your employees at every step in the employment process: from hiring, firing, promotions, harassment, training, wages, and benefits. And as an employer, you can be held vicariously liable for the actions of your employees, meaning if you “allow” or don’t prevent harassment or discrimination in your workplace, you could find yourself and your business or nonprofit named in a discrimination lawsuit. By putting the right anti-harassment and non-discrimination policy in place (and following it), you will be able to show that you acted appropriately to prevent discrimination and respond to workplace harassment.
And these aren’t just issues for “big” business. Yes, accusations at larger companies make headline news, but for every case you read about against a large corporation, there are several less reported cases against small businesses and non-profits. Not only do these cases take precious time away from your business (not to mention the emotional toll litigation can take on you personally), but they are also incredibly expensive to defend. The problem seems especially prevalent in family-owned businesses where non-family members often feel they are being treated differently and unfairly or that they cannot speak up against one of the family members who is engaging in unwanted behavior.
The bundle of rights associated with the concept of “copyright” exists from the moment a work is created in a fixed form. However, those rights generally belong to the creator or author of the work. So what happens when that author is someone you are paying to create the work for you, your business, or non-profit? Enter the concept of “works made for hire.” If a work meets the legal requirements to be considered a work made for hire, then the employer will be considered the author of the work even if an individual employee was actually the original creator. What are the legal requirements for works made for hire? "Just because you call it a 'work made for hire' doesn't make it so."
Regardless of size, every business or nonprofit with employees needs to have certain policies in place. In this series, we’ll be discussing what you need to know when putting these policies into place. But first, which policies should be considered essential, whether you’re hiring your first employee or you’re dusting off an old employee handbook that desperately needs updating?
As a small business owner or non-profit director, you probably already had a lot on your to do list before Coronavirus became a global pandemic. As we all adjust to the rapid changes in our daily lives and businesses, it’s important to not panic and make well-informed decisions regarding the day to day operations of your organization. This is especially important if you manage employees who may be impacted by the announcement of an extended spring break for schools throughout the state.
Time and Attendance: Sick Leave and/or PTO as a Small Business
Even before Coronavirus broke, many small business owners found it difficult to offer sick leave or paid time off. It’s difficult to pay someone to not work when you are sacrificing your own pay to build a business. And it can be burdensome to ask a small team to pick up the slack when someone is out. But in times like this, when lives are at stake, it’s important to prioritize health and safety:
1/14/2020 Internships: To Pay or Not to Pay?As your business grows, it’s inevitable that you’ll need extra help. And often, you’ll need this help before your business can really afford to hire extra help. Enter: Unpaid Internships. Your small business gets free labor, and the intern gains valuable experience for their resume and (hopefully) a good reference for later on down the road. But like so many things, the law isn’t so simple. All employees are entitled to at least minimum wage under the Fair Labor Standards Act (FLSA), and the FLSA determines who is an employee (regardless of what you might call the worker). So the question for you as a small business owner is whether or not your intern will be considered an “employee” under the FLSA. Non-Profit Caveat: While most of our blog posts apply equally to both for-profit and non-profit entities, this one is an exception. The Department of Labor recognizes that individuals may freely volunteer their time to non-profit organizations. Because of this, unpaid internships are generally permissible in the non-profit sector. However, non-profit organizations should still be careful with paying stipends because they can call into question whether the person is still a volunteer or is now an employee. Hiring a new employee is an exciting time for any business. But it can also be a legal minefield, especially when you don’t have a dedicated HR professional or department. Once you find your next great hire, should you send them an offer letter or an employment agreement? What’s the difference between the two? And what legal risks should you be aware of, regardless of whether you decide to send an offer letter or an employment agreement?
We’ve talked before about why it’s so important to know the difference between an employee and an independent contractor (and the penalties for getting this wrong). But as I was deciding what this week’s blog post should be, I realized…we didn’t really discuss what is the difference between an employee and an independent contractor? As year-end approaches and you start making strategic plans for next year, it’s critical that you know how to make this determination. The IRS considers a worker an independent contractor “if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.” If you think about it, this makes sense. An independent contractor must be “independent.” If you are telling a worker what to do, when to do it, where to do it, and how to do it, they’re not an independent contractor. They’re an employee. Even if the worker has some level of discretion (as most professionals do in this day and age), the key is whether or not you as the employer have the legal right to control what is being done and how it’s being done. In other words, are you paying the worker to accomplish a result, or are you paying the worker to perform a list of duties and responsibilities)? Are you paying the worker to accomplish a result or to perform a list of duties and responsibilities? Of course, like most things in the practice of law, it’s never as simple as results vs details. The IRS is cracking down on misclassification, and with the growth of the so-called gig economy, some states are even passing legislation to treat more workers as employees. The ultimate answer to the question “what’s the difference between an employee and an independent contractor” is it depends on the specific facts in your situation. How’s that for a lawyer answer?
As your business grows, you realize there are only so many hours in the day, and those 24 hours simply aren’t enough for everything that needs to get done: producing your product or service, marketing the business, making sure there is enough money to keep going, growing yourself as a leader and entrepreneur, etc., etc. At some point you simply need more help.
But taking on a regular payroll expense seems daunting and payroll taxes sound confusing and expensive. (After all, if you hire someone at $10/hr, it actually costs the business more than $10/hr…thanks Uncle Sam!) Many small (and some not so small) businesses in this situation decide to hire independent contractors instead. But is that truly the way to grow your business, or is it a trap waiting to spring? The Fair Labor Standards Act (“FLSA”) requires that virtually all employees be paid at least the federal minimum wage for hours worked, plus overtime (at time and a half the employee’s base pay) for any hours over 40 in any given work week. It is critical for small businesses to know which employees are considered “exempt” from the overtime rules and which are “non-exempt,” meaning they must be paid overtime.
Many small businesses and non-profits assume that if they pay an employee a salary, then they don’t have to worry about the overtime rules. After all, paying overtime is expensive. However, the penalties for misclassifying employees and refusing to pay overtime can be steep. And while happy employees generally don’t complain, disgruntled employees (and former employees) will suddenly demand their unpaid overtime no matter what “understanding” you thought you all had. Before adopting a policy of simply not paying overtime (or making everyone a salaried employee), small businesses and non-profits should ask three questions:
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7/14/2020
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