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Employment Law 101

November 10, 2011, 12:00 AM
Topic: Careers

Many of you out there are new managers and therefore unaware of the ins and outs of employment law. There are also those of you who have been in the managerial ranks for a while, but don’t see the employment law value-add available from your human resources department. Or maybe your company doesn’t have a human resources department. No matter which scenario you fall under there are certain employment laws that you should, at the very least, be aware of so that you can avoid any unpleasant lawsuits. So read this very brief discourse on employment law and know when the time has come to raise your hand and yell “Help!”

Most of us, me included, used to believe that if you worked in a non-union company you didn’t need to worry about the National Labor Relations Board (NLRB) and the National Labor Relations Act (NLRA). As of April 2011, the NLRB directed that all cases be submitted to them regarding an employer prohibiting or disciplining employees in protected activities – whether or not the company is a union shop.

For instance, say you overheard your employee talking to another about the most confidential of topics – specific company salaries. You decided as this person’s manager that you should step in and tell them to stop this practice as a discussion regarding salaries is clearlyinappropriate. Unfortunately, the employee ignored your request, continued such conversations -- so you fired the person. Seems reasonable, right? Another timely example to consider: browsing around Facebook you found that one of the employees wrote about what an awful manager their boss was and asked others to step up to the plate, join in and complain about the manager. So you brought it to the attention of management, who fired the employee. Again, doesn’t this seem reasonable?

However, in both circumstances the manager and the company were actually stepping on that employee’s rights under the NLRA: the right to express oneself about workplace conditions is a protected, concerted activity. Concerted here means conversations among 2 or more employees and/or other employees have been invited to participate in the “conversation” or to take action. The NLRB would be within their right to insist that the company, in both of these situations, hire back the fired employee, and pay lost wages and the employee’slegal fees.

Also with regard to the NLRA, effective January 31, 2012, ALL employers (with few exceptions), whether a union shop or not, must post a notice informing employees of their rights under the NLRA. I suggest you check it out on-line.


So here you are again, trying your best to manage an employee who has once again displayed their inability to make good decisions. You document it – because everything you have read has drilled documenting into you ad nauseam – and decide to enter the issue into the employee’s personnel file but for the moment keep it confidential in hopes that things will improve on their own. In some states employers are required to notify employees when information has been placed in their personnel file that may affect the employee’s employment, including promotions, transfers, raises or the possibility of disciplinary action. Check your state laws or ask your HR representative if you have one, prior to taking this kind of action.

Credit Checks

Many companies, including some I have worked for, run credit checks as a matter of course during a background check – regardless of whether or not the position applied for will handle the transfer of monies. The idea being that how a person handles their credit is an indication of their ability to make good decisions. In 7 states to date - CA, CT, HI, MD, IL, OR and WA –(and a Federal Bill has been introduced) this is now illegal. Stay on the cautious side: only request a credit check when the candidate or employee’s credit may have a relation to the job and/or the candidate/employee will have responsibility for financial information or corporate funds.

Non-Exempt Employees and Independent Contractors

Think you are going to save your company money by calling a position non-exempt (meaning the position is not eligible for overtime) or hiring an independent contractor so that the company doesn’t need to provide benefits or pay payroll taxes? Don’t do it. Classify all of your jobs correctly and get help if you are unsure as to how they should be classified.There are currently 9 states (CT, HI, MD, MA, MN, MO, MT, UT and WA) wherein the Department of Labor has signed an agreement with the Internal Revenue Service to share information and coordinate law enforcement regarding job misclassification. Together they can be a powerful enforcer!In California, “willful misclassification” of a position is illegal and can carry various penalties not the least of which is what is called the “Scarlet Letter Rule”: an employer found guilty of willful misclassification must publicly display a notice of their violation (ouch!). In Connecticut penalties for misclassification can run $300 per day, per employee misclassified.

The list goes on – and can be quite scary – from verbal employee complaints now being recognized by the Supreme Court, to the Courts determining that undocumented workers are eligible to recover back pay and overtime under the Fair Labor Standards Act. (How is this possible? The courts are leaving it to Congress to figure out how to resolve the catch 22 between immigration and labor laws. Stay tuned....).

So proceed, but with foresight and forethought, understand the value of your HR representative’s knowledge, make use of it, and get legal advice when necessary!

Gni Grossman
Founder | GG Companies
Gni Grossman is a principal at GG Companies, a human resources consulting and executive recruiting firm. She started this company after over twenty years as a human resources generalist with corporations such as The Hay Group and De Lage Landen and 5 years focusing on recruiting for the equipment finance industry at Molloy Associates, Inc. Gni holds a Bachelor’s Degree from the Johns Hopkins University.

Readers may contact Gni Grossman at and/or contact Gni at 781-859-5157.

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