Employment and Labor

Employment Issues Faced By Small Businesses

Employment Issues Faced By Small Businesses

As small companies begin to grow and add employees, they may not be fully aware of the state and federal regulations regarding employment law with which they must comply.  They may not think that some of those regulations apply to them because of their size.   This goes for companies downsizing as well.  Florida regulations can be confusing and not having an employment manual with clear policies can also create problems for employers. 

Is there an increase in the number of employment lawsuits? What are some of the contributing factors to the increase?

Yes, there has been an increase in employment lawsuits. Lawsuits are up because of several factors: increased employee awareness of their rights, increased willingness to sue, larger jury verdicts, business downsizing, poor job market, and changes in the law (in 2008, both the ADA and FMLA were expanded, and the Genetic Information Non-Discrimination Act of 2008 was passed).

Given that Florida is an “At Will Employment” state, what are the circumstances that allow an employee to sue a former employer?

“At will” employment defines the relationship between an employer and its employee: the employer can fire the employee for any reason, and the employee can quit for any reason. There are exceptions to this: (1) contract, (2) unions, and (3) statutory limitations. For example, under Title VII, an employer cannot fire an employee because of that employee’s race, and under the ADA, an employer must reasonably accommodate an employee if he or she is disabled.

An employee can sue his or her employer if the employer’s actions violate the terms of an employment agreement, a union contract, or a statute.

Are small businesses subject to the same employment laws as large corporations?

Not always. All employment statutes do not apply to all employers, and sometimes there is a requirement that an employer employ a certain number of employees for a statute to apply. For example, the Florida Private Whistleblower Act applies to employers with 10 or more employees. The Family Medical Leave Act applies to employers that employ 50 or more employees for 20 or more weeks in the current or preceding year. However, it’s not always as simple as looking at the number of employees. Some statutes have additional terms beyond the number of employees that are applicable – i.e., under Florida law, employers with four or more employees must provide workers’ compensation, but if the employer is in the construction industry, it must provider workers’ compensation regardless of the number of employees.  Therefore, it is important to review the statutes thoroughly to determine whether they apply to a particular employer.

Even if a business only has a few employees, should it have a policy manual? If so, what should the handbook contain?

Yes, a policy manual is a must. It sets out the policies and expectations of the employer. If an employer follows these policies uniformly with regard to all its employees, so that each employee is treated the same, the employer can minimize the risk of lawsuits.

What should be covered in a policy manual: an anti-discrimination policy, an anti-harassment policy, a method of dealing with discrimination and harassment claims, employee requirements (hours to be worked, how paid, when paid, what an employee should do if they’re running late, what breaks are allowed, dress code, etc.), benefits employees are entitled to (sick leave, vacations, parking allowances, etc.), and what is prohibited (no food at the desk, no personal calls, no using the computer for personal use, etc.). There should also be a statement in the manual that it does not create a contract of employment. Lastly, each employee should be given a copy of the policy manual and should sign a receipt for it.

What are some of the pitfalls employers need to avoid in regards to discrimination?

There are several pitfalls, but the biggest one is not treating every employee the same.  For example, if a male employee is consistently tardy but is never disciplined, whereas a female employee is fired for the same thing, that will set up a claim of gender discrimination. All employers need to set up their policies and procedures, and then apply them consistently and uniformly to all the employees.

The Family Medical Leave Act (FMLA) has recently been expanded. Who is now eligible to take time off and what are the circumstances?

In 2009, the FMLA was expanded to include leave granted to military service members and their families. The amendments permit a "spouse, son, daughter, parent, or next of kin" to take up to 26 workweeks of leave to care for a "member of the Armed Forces, including a member of the National Guard or Reserves, who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness." An employee is also permitted to take 12 workweeks of FMLA leave for "any qualifying exigency arising out of the fact that the spouse, or a son, daughter, or parent of the employee is on active duty (or has been notified of an impending call or order to active duty) in the Armed Forces in support of a contingency operation."

When an employee takes time off under the FMLA, is the employer required to provide the same job at the same pay when the employee returns to work? And if the employer has filled the position, what happens?

An employee is not entitled to demand the same job upon returning from FMLA leave, but must be returned to an equivalent job, with equivalent pay, benefits, and other terms and conditions of employment.

To avoid the risk of litigation, an employer should hold open a job for an employee on FMLA leave if at all possible. However, if that is not possible and it is necessary to fill the position with another employee, the employer must place the returning employee in an equivalent position. There should be no reduction in pay or benefits to the returning employee, and the job responsibilities should be similar. In short, if the employee feels that he or she is being punished for exerting his or her right to leave under the FMLA, the employer runs the risk of being served with a lawsuit.