Running a business is all about your people. They’re the heart and soul of your operation, the driving force behind your success. But there’s a twist – a tricky one. The legal landscape surrounding HR and employment is like a constantly shifting maze. If you’re a business owner, you’ve probably felt the challenge of keeping up with the ever-changing rules and regulations. Laws vary from state to state, and they seem to morph faster than you can say “compliance.” It’s a tough nut to crack, no doubt, but it’s a challenge you need to conquer.
The Ever-Changing Game of Employment Law
In business, your workforce is your most valuable asset. When everything is going well we embrace the mantra “teamwork makes the dream work”. But for employers, that dream can quickly turn into a nightmare..
The ever-evolving landscape of employment law is like a tightrope walk. The line between what’s right and what’s wrong, what’s legal and what’s not, can be as thin as a razor’s edge. Even the most well-meaning employers can find themselves caught in legal intricacies while trying to do right by their employees. What might seem like a compassionate choice can inadvertently lead to legal trouble when it doesn’t align with the intricate web of employment regulations.
Picture this scenario: An employer wants to support an employee dealing with a disability, so they offer extra paid time off to help them through a tough period. However, when another employee faces a similar situation, the employer doesn’t provide the same assistance – maybe due to different circumstances. This inconsistency in applying the rules can spell real liability. The employer’s intent was simply to help an employee in need, but it can backfire legally.
Transparency in employment regulations is on the rise, putting more pressure on employers. What was perfectly fine a few years ago can now be questionable or even illegal in certain states, like Washington:
- Historically, many employers didn’t offer paid time off, but now, some jurisdictions mandate paid sick leave for all employees.
- Non-compete agreements, once a go-to for protecting businesses, now face severe restrictions, and an outright ban could be on the horizon.
- Job postings that used to skip pay rates and benefits must now provide detailed compensation and benefits information for employers with over 15 employees.
- Companies that used to restrict employees from discussing workplace matters on social media must now comply with federal law, which protects employees’ rights to engage in concerted activity.
This ever-changing landscape adds complexity for modern business leaders trying to keep up with the shifting rules and incorporate them effectively into their operations.
Consider the Type of Employment
When it comes to employment, there’s no one-size-fits-all approach. Various employment arrangements exist, each with its implications for both employees and employers. These include full-time, part-time, temporary, freelance, and contract-based employment. In Washington, the distinction between full-time employees and independent contractors holds critical significance. According to the Federal government, a full-time employee usually works around 30 hours per week, though it varies by industry. In Washington, full-time is typically defined as a 35-hour workweek. Independent contractors are self-employed individuals who provide services under specific contracts, and correctly distinguishing between the two is vital for determining legal obligations and benefits.
Keeping Up With All The Changes
Keeping up with the ever-evolving landscape of employment law is a daunting task for any business leader. Just take a look at the recent changes in Washington alone to get a glimpse of the complexity:
And if you have employees in other states, the complexity multiplies:
- New Amendments to the California Privacy Rights Act
- New Colorado Protecting Opportunities and Workers’ Rights (POWR) Act
- Oregon’s Paid Family Leave
Staying on top of these changes and ensuring they are integrated into your systems and processes can be overwhelming. You don’t have to go it alone. We’re here to help.
Build a Robust Legal Framework
At Equinox, we know that success in HR goes beyond keeping up with changing laws. It’s about being proactive and building a strong Legal Infrastructure for employment relationships:
1. Contracts: Contracts are the backbone of your legal framework. While some aspects of employment law are statutory and can’t be bypassed with contracts, these agreements set the stage for expectations within the context of the law. Common “employment contracts” include offer letters, employment agreements, confidentiality or restrictive covenants agreements, employee handbooks, and policies and procedures documents. Formalizing expectations in writing helps limit liability exposure, define your company culture, and make informed employment decisions. Regularly reviewing these contracts is essential, especially when expanding to states with differing laws.
2. Insurance: Don’t underestimate insurance as a tool for protecting your business. Errors and Omissions or Professional Liability coverage safeguards against claims due to employee errors, while Employment Practices Liability Insurance (EPLI) shields employers from claims related to workplace rights violations. As your workforce grows, insurance becomes a critical safety net.
3. Entity Type: Your business’s legal entity can offer a layer of protection against employment liability. Generally, owners are shielded from personal responsibility if a claim is made against the company. However, owners who violate the law, such as failing to pay wages or engaging in discriminatory practices, can be held personally liable. Implementing solid processes can add protection and reduce the chances of missing important legal requirements.
Mitigating employment liability requires proactive adaptation to evolving laws, clear policies and procedures, and the use of contracts and insurance. With these tools in place, you’ll have the confidence to navigate the ever-changing HR landscape and handle employment situations efficiently and effectively.
Equinox the Playing Field
If you’re facing concerns or challenges related to these legal changes, book a free consultation with us. Our fixed-cost Strategic General Counsel Plans offer ongoing support, ensuring you never have to hesitate in making decisions that are right for your business and your people.
Discover where your business stands in just 7 minutes by taking our Business Health Assessment and receive a personalized 30+ page report tailored to your unique business needs. Let us be your guide through the ever-changing maze of employment law.