Back To CourseBusiness Law: Help and Review
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Ashley is an attorney. She has taught and written various introductory law courses.
Almost all businesses use some sort of employment law. Employment law is the area of law that governs the employer-employee relationship. Therefore, if the business has more than one employee, then the business likely uses employment law. This area is made up of both state and federal laws and includes many different subjects with the common goal to protect workers' rights. For employees, these laws work to:
Just one well-known example is Title VII. This is a federal statute included as a part of the Civil Rights Act of 1964. This famous law prohibits employment discrimination based on a person's race, color, religion, sex, or national origin. This means that these aspects can't legally be considered when hiring, firing, promoting, compensating, or in any other aspect of employment.
Another well-known example is the Fair Labor Standards Act or FLSA. This crucial piece of federal legislation was enacted during the Great Depression when workers often suffered long hours, harsh conditions, and unjust pay. The FLSA established a federal minimum hourly wage and child labor laws for certain industries. When the FLSA was enacted in 1938, the minimum hourly wage was only $0.25. In 2013, it's $7.25.
Usually, the key is simply recognizing when employment law is an issue. This can be difficult because the subject is truly vast. Employment law includes such things as:
For most business owners, it's just not possible to comfortably know enough about employment law. Instead, a savvy business owner will recognize when employment law covers a subject so that he or she can seek the help of an attorney. I found this out the hard way!
I own a small business. It's a pet grooming business, called Barks and Bubbles. I only have a few employees. I try to be flexible with them because I think it's easier for them, and I'm trying to be nice. It's also easier for me because my employees are happy, they like me, and I have less paperwork. But, I recently had a meeting with my attorney, and I learned that I'm doing several things wrong! I didn't realize these were employment law issues at all, and I didn't realize the intricacy of these issues.
For example, when I set up my business, I decided that I wouldn't keep track of my employees' hours. I thought it would be easier for me to pay all of my employees a set salary, so that I don't have to keep time sheets. This means that all of my employees are exempt employees. I didn't realize that this is a special legal classification.
Let's take a look at what I did wrong. At Barks and Bubbles, we don't have set work hours or set breaks. I'm a nice boss, so I let my employees take rest breaks if the work is done, but otherwise, we don't really take breaks. We always take a lunch break, but sometimes our lunch break is late, and sometimes it's very short. Also, I don't pay anyone overtime. Sometimes we work long hours, and sometimes we work shorter hours. I figure it all evens out.
My attorney says that this is a complicated area of employment law that's governed by the FLSA. She says that I can't just exempt employees. There are certain requirements that must be met regarding each employee's individual job duties, authority, skills, and qualifications. She says there's a minimum weekly pay rate for exempt employees, and I'm likely not reaching it. Therefore, I can be sued in federal court for not providing overtime pay and proper meal breaks. I'm going to have to look into this and change the way I pay my employees!
Now, let's take a look at some of the other employment problems she noticed. Many employment laws are state civil laws and are administered by state labor offices. Each of the 50 states has a state labor office. These labor offices are state administrative agencies that deal strictly with administering employment law. Many of my employment law problems were state law problems and could have been avoided by contacting my state labor office for more information before proceeding.
For example, one of my employees, Stacy, recently got a divorce and was having some financial trouble. I want to be a generous boss, so I gave her a loan, and I've been deducting payments from her paycheck. I had no idea I couldn't do this, but my attorney says this is likely against my state employment laws.
We also talked about a recent situation involving the resignation of my best employee. Wilma worked for me for years but left to work for another pet grooming business. When she left, she still had some of my items in her possession. She has a whole bag of my special combs, brushes, shampoos, and fragrances, and I want them back! I was supposed to send Wilma her last paycheck on the 15th, but I didn't send it. I told her she could have her paycheck when she brought my stuff back. My attorney tells me this is likely against my state employment laws. She says that Wilma can sue me in state court for her paycheck and that I'll have to pay her with interest. I don't want to do that! I had no idea this was the kind of thing that was covered by employment law.
Let's review. Almost all businesses use some sort of employment law. Employment law is the area of law that governs the employer-employee relationship. This area is made up of both state and federal laws and includes many different subjects with the common goal to protect workers' rights. Employment law covers everything from human resources to labor relations. For employees, these laws work to:
For most business owners, the key is simply recognizing when employment law is an issue. This can be difficult because the subject is truly vast, but a savvy business owner will recognize when employment law covers a subject so that he or she can seek help when necessary.
After watching this lesson, you should be able to explain what employment law is, what it includes, the kinds of situations it can prevent and the ways in which employment law can protect employee rights. You could also recognize the contrasts between state and federal employment law and cite examples of each.
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Back To CourseBusiness Law: Help and Review
27 chapters | 342 lessons