So You've Hired an Employee. . . Now What?
Growing your business to a position where an employee is necessary is a great accomplishment. With this great accomplish comes even greater responsibilities.
There are two main areas of increased risks when deciding to hire an employee:
1. Employment Laws
When you hire an employee, you are required to comply with the various federal and state employment and labor laws. These laws include:
The Fair Labor Standards Act (FLSA): The federal wage law covering minimum wage and overtime pay
The Occupational Safety and Health Act (OSHA): The federal law that requires you to provide a safe work environment for your employees.
Payroll taxes: Employers have various federal tax obligations such as withholding and paying FICA and FUTA taxes.
The Employee Retirement Income Security Act (ERISA): A federal law that affects certain administrative aspects of employee benefit and retirement plans.
The Consolidated Omnibus Budget Reconciliation Act (COBRA): A federal law that requires employers of 20 or more to offer individuals who would otherwise lose benefit protection the option of continuing to have group health care plan coverage.
The Family and Medical Leave Act (FMLA): A federal law requiring employers with 50 or more employees to allow employees to take unpaid leave under certain circumstances.
The Americans with Disabilities Act, also known as the ADA, is actually a part of Title VII legislation and also applies only to employers with 15 or more employees.
2. Liability for Employee's Bad Acts
Hiring an employee also expands your business's liability for the actions (or lack of action) of those you hire. Situations that may arise include:
Worker's Compensation: Liability for the employee's bills and loss wages for injuries while on the job.
Employee Misconduct: Generally speaking, an employer is responsible for the bad acts of their employees if within the scope of the business. (Ex: Employee drops liquid on the floor, does not clean it up, and a customer slips. The employer is likely liable for the injuries.)
Negligent Hiring: A business can be liable for neglecting to screen an employee thoroughly when the employee commits a bad act that they have committed previously. (Ex: Employee has been committing credit card fraud with client's information they received from employer. Employee was fired from their previous employer for misusing client information.)
As you can see, the ways in which an employee can create liability for their employer are virtually endless! It is so important for employers to have a legal framework for dealing with hiring and employment issues to lower their risk as much as possible.
The small business lawyers at the Law Offices of Lakeisha R. Simms are here to help you create your legal employer documents within your risk management plan. Visit our website at www.LSimmsLegal.com or call our office to schedule a FREE on-site business consultation.
The Law Offices of Lakeisha R. Simms is a law firm practicing primarily in the areas of small business law, family law, and wills & estate planning. We service clients in their businesses and in our offices located in Hillsborough and Pinellas Counties.
This is intended for informational purposes and is not intended as legal advice or a substitute for hiring an attorney. Furthermore, by sharing this information, it is in no way intended to establish an attorney - client relationship with the reader.