Planning to Wealth sat down with Richard Romeo, a litigation attorney with a specialty in employment law, to answer top employment questions for business owners.  Romeo practices at Salon Marrow, a boutique firm in Midtown Manhattan, and works with small to medium-sized businesses ranging from tech startups to large financial institutions.  Discover Richard’s top tips for business owners to avoid liability and maintain workplace harmony.

1. Understand the Three Sets of Employment Law.

 There are three sets of employment laws for business owners in New York City: Federal, State and New York City.  If you are located in Westchester County, Nassau County, or Bergen County in New Jersey there may be laws in those particular counties to keep in mind.  It’s important to make sure that you comply with all applicable laws and understand the nuances and details in these laws to have clear guidelines on what your business can and cannot do.  

For instance, in New York City it’s important to know what types of questions you can ask potential employees.  You can ask an interviewee about a conviction in New York State, but you can't use that conviction in the hiring process unless it relates to the job.  Let’s say you are hiring someone as a school bus driver, and they were arrested for fraud and embezzlement.  As long as they don't have any access to money, you might have a problem denying that person the school bus job even though they have a prior conviction. That might not be the case if that prior conviction was for sexual offenses against children.

It’s so important that business owners are aware of the details and nuances of these laws, especially at a small to midsize company that is aggressively growing.  One lawsuit can really make or break a company’s future.

2. Be Aware of the Fair Labor Standards Act (FLSA).

Among other things, FLSA requires that employers pay a minimum hourly wage.  The Act states that except for “exempt” employees, all employees must be paid time and a half for any hours worked in excess of 40 hours in any given week.  However, it’s important to note there are a lot of exemptions (executives, sales people, etc.) and there’s a lot of details relating to these exemptions.  FLSA is Federal Law.  The New York labor law has similar provisions, and it’s important to know the key differences.  For example, New York minimum wage is higher than the Federal minimum wage. There are a surprisingly large number of established businesses that don’t clearly understand the key differences in labor laws, which puts the company’s financial success at risk.

How can you avoid an FLSA violation?

1) Properly classify the employee as exempt or non-exempt.  

2) Keep accurate records of how many hours they work.

3) Make proper calculations for overtime.

3. Know the Proper Protocol for Terminating Employees.

One of the largest problems for companies is building proper policies on disciplining and terminating employees as well as following the policies put in place.  For instance, if a business owner terminates someone because of “poor performance”, the first thing a court or administrative agency will ask is, “How did he or she not perform?”  To bust any claims of false discrimination, the business owner should have memos with specificity detailing under-performance. 

 To ensure your business has clear guidelines for employee performance, leave no room for debate.  You should document policies that cover all expectations of employees, even common sense protocol like coming to work on time.  

4. Ensure your Employee Manual includes Standards of Conduct and Rules Regarding Leave.  

 There are many rules regarding leave that employers need to document.  A major one is The Family Medical Leave Act (FMLA), which is a Federal law that guarantees certain employees up to 12 workweeks of unpaid leave each year with no threat of job loss.  FMLA also requires that employers covered by the law maintain the health benefits for eligible workers who are on leave just as if they were working. 

 In New York State, business owners also need to address the Paid Benefits Leave Act, which provides paid leave to bond with a new child, care for a loved one with a serious health condition, or to help relieve family pressures when someone is called to active military service abroad.  As well, in New York City the Earned Sick Time Act also mandates that certain kinds of leave is paid. 

 It’s important that you document all of these laws in your employee manual and clearly define the different requirements for each law.  New York City is especially vigorous in enforcing these regulations, so if your business is located in New York City, it’s even more vital to consult your lawyer.

5. Make Sexual Harassment Policies a Priority.

 Starting October 9, 2018, employers in New York State are now required to adopt the state’s model sexual harassment prevention policy or modify an existing sexual harassment policy to meet the state’s minimum standards, and provide annual sexual harassment prevention training to all employees.

 This will help ensure all employees are in a safe and stress-free environment, and help avoid improper conduct in the workplace.