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Tom Nutile

Guide to Small Business Labor and Employment Law Compliance

Avoiding mishaps can spare you the expense and hassle of an employee lawsuit

By Tom Nutile, Principal, TN Communications Group

If you're starting a business, make sure you develop a comprehensive labor and employment compliance plan. Why spend the time and expense? Because a misstep, be it in hiring, firing or other employment issues, could cost millions of dollars if you're sued by a current or former employee.

Your plan should include:

  1. A current employee handbook that spells out procedures and policies.
  2. A detailed anti-harassment policy that is distributed to employees and complies with state and federal laws.
  3. A method to solicit employee feedback, including any type of harassment complaint.
  4. A method of evaluating employee job performance at regular intervals, such as every six months or annually.

Action Steps
The best contacts and resources to help you get it done


Make yourself an expert – or run expert software

You never know when an employment issue will come up. Be prepared.
I recommend: The federal Department of Labor's Employment Law Guide for small business takes you from soup to nuts, including health benefits, wage garnishment, retirement standards and union issues. The Cornell Law School gives a useful overview of labor law. Or run CompliancePro software on your PC; it generates forms for tracking every sort of employment issue, while giving expert advice along the way on how to act within the law.

Conduct background checks without violating rights

It makes sense to conduct a background check of a potential employee. You don't want the risks or the liability that come from making a bad hire. But you also don't want to violate a prospective employee's privacy rights by doing it the wrong way.
I recommend: Privacy Rights Clearing House tells you what's on and off-limits in running a check. Wackenhut will run the check for you.

Don't discriminate

Make sure you and your managers do not discriminate on the basis of age, race, pregnancy, religion, national origin or disabilities by keeping up with the latest federal and local regulations.
I recommend: See the Equal Employment Opportunity Commission site for fact sheets spelling out what are discriminatory practices.

Comply with wage and hour regulations

Learn what the minimum wage laws are in your state.
I recommend: The U.S. Department of Labor is the gateway to all the state wage regulations.

Meet the immigration laws

Immigration laws require companies to verify a person's eligibility for employment. To do so, you need an Employment Authorization Document (EAD) form, also known as an I-9 check.
I recommend: U.S. Citizenship and Immigration Services lays out the rules on I-9.

Post state and federal labor laws

Each workplace should have a poster with the latest federal and state labor laws.
I recommend: You can order both state and federal posters at the Labor Law Center or the Federal Wage and Labor Law Institute.

Consult your state's labor office

Every state has a labor office that can be a source of information about labor and employee law.
I recommend: Click on this federal Department of Labor site to get details on your state's labor office.

Tips & Tactics
Helpful advice for making the most of this Guide

  • Do not publicly embarrass an employee, even if he or she has made a mistake.
  • Avoid giving out negative references for former employees. Tell a reference checker that your company only allows you to verify a former worker's dates of employment.
  • Keep problem-employees issues private. Discuss them only with managers or supervisors who need to be kept in the loop.
  • Treat all employees equally.

The official source of Small Business Labor and Employment Law Compliance is
the Labor Law page at Business.com

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Recommended Solution Providers

Labor Law Center: Compliance Posters
Comply with the labor laws by using posters.

Federal Wage and Labor Law Institute: Compliance Posters
Offers wage and labor compliance posters.

Compliance Pro: Employment Law Compliance
Provides tips and guidance for federal employment law compliance.

Employment Law Consulting Group: Employment Consulting Services
Find out how to prevent employment issues.

LearnKey: Employment Law Compliance
Provides employment law compliance training materials.

Compliance Pro
Preventative risk management program.

Best Sites to Learn More

About.com Small Business Information: Labor Law
Articles on labor laws.

U.S. Department of Labor: Compliance Assistance Office
Learn how to comply with U.S. labor laws. Has a link to an employment law guide.

Workplace Fairness: Worker's Rights
Focuses on worker's rights.

FindLaw: Labor and Employment Law
Provides links to labor and employment laws.

U.S. Small Business Administration: Employment Law
Learn the laws and regulations for labor and employment.

Legal-Definitions.com: Employment Law
Definitions and information for employment law.

PrivacyRights.org: Small Business Owner's Background Check Guide
Learn how to conduct background checks legally.

EEOC Training Institute: Employment Discrimination Prevention Training
Get training from the government on how to prevent discrimination in the workplace.

Cornell University
Section devoted to labor law.

Best Blogs and Forums

FreeAdvice: Employment and Labor Law Forum
Learn about labor and employment compliance.

Law and Policy Institution: Labor and Employment Law Forum
Discuss labor and employment law. Find the link on labor and employment law.

Small Business Community: Employment Forum
Join small business discussions on labor and employment law issues. Has a link for employment discussions.

Labor Law Forums
Learn about labor laws, LLC's, partnerships and business law in this forum.

Workplace Prof: Labor and Employment Law Blog
Blogs about labor and employment law.

Point of Law: Employment Law
Discusses the myriads of laws related to employers and employees.

Charles Krugel: Labor and Employment Law Blog
Labor and employment law articles from a practicing management side labor and employment attorney and human resources consultant.

LawInfo.com: Labor and Employment Law Blog
News about labor and employment law.

LawMemo.com: Employment Law Blog
Focuses on employment law.

George's Employment Blog
Blogs about employment law issues.



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