Are You a Startup Owner? 4 Employment Law Tips


If this is your first shot at running a business, you probably have never had a reason to acquaint yourself with employment law before. The circumstances surrounding hiring and retaining employees are even more complicated than the circumstances surrounding hiring top talent. Some things are common sense, but other aspects of employment law are so nuanced that they’re often misunderstood.

Many startup owners find themselves in some relatively common situations regarding employment law. While you should always thoroughly consult your local laws to see what does and doesn’t apply to you, there are a few small details in a few core areas that might require a little extra attention no matter where your startup is located.

  1. Creating a Handbook For Your Employees

Your handbook for your employees should detail all of the guidelines you need them to follow, from attendance to dress code. Primarily, you want your handbook to focus on policy. Your employees need to be made aware of their rights and what the leave laws are. It should also contain a basic summary of benefits, and leave you some wiggle room as far as a minimum for hours worked a week and flexible scheduling are concerned.

Your local area may have mandatory notices or resources you need to provide for your employees. These should be listed in the handbook as well. It is not mandatory to include disciplinary policy or termination policy within the handbook – doing so may cause a slippery slope later if an employee should do something egregiously wrong (for example, sharing sensitive information on social media) that wasn’t listed in the handbook claims that it wasn’t an offense that can lead to termination.

  1. Knowing How to Fire Someone

Most startup employees are a gamble. A lot of them don’t have a wealth of experience working in a startup environment. For some of them, it may be their first job out of college. If you do need to fire a startup employee, you need to know how to do it the right way.  If the employee broke the law or committed a crime against your startup, you might want to get a lawyer involved to determine how to best proceed.

You can’t angrily and unofficially fire an employee. You need to be direct and professional throughout the process. It helps to do it in a sequestered environment with a single willing witness present. You’ll need to get back anything you gave them as company property, like a smartphone or a laptop specifically for work, and disconnect their access from your networks. You absolutely must pay them for all of the time they worked.

  1. The Classification of Employees

There is a difference between employees, temps, and independent contractors. For legal reasons, you need to classify your employees correctly. A temp is someone who is working for you on a limited contract, but you have authority over them. An independent contractor is someone who works with you, rather than for you. This isn’t someone you would have the authority to fire, and they may not need to adhere to your conduct code or receive benefits from you. If you were to stop your relationship with an independent contractor, you would merely stop purchasing their services.

  1. Understand How Harassment and Discrimination Laws Work

This is a big one. Harassment and discrimination laws are often very localized. Some harassment or discrimination laws are perceived differently from town to town, so it helps to study any precedents to make sure you’re unlikely to encounter bumps in the road.

Not all discrimination is illegal. Say, for example, you have an employee with a physical disability. This employee loses their temper and acts egregiously inappropriate in front of a customer. You can fire this employee for their actions. Discrimination is firing them for something that directly stems from them being a member of that protected class – for example, you couldn’t fire them because they have a wheelchair that doesn’t fit down your hallway.

Harassment is the same way. While some types of behavior would clearly be considered harassment (like using slurs at an employee, or inappropriately touching them), there are always gray areas. Research and thoroughly understand what could be considered harassment in your local community.

If you’re ever unsure about what to do in a specific situation or what bases you need to cover before you start onboarding, consult with your legal team. Law experts are a startup’s best friend.

Lucy Taylor is an avid blogger who enjoys sharing her tips and suggestions with her online readers. Working as a legal expert at LY Lawyers, Lucy often helps people dealing with legal problems, addictions and crime.


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