Understanding HR law: proactive steps for every business owner.

Author:Rosen, Miriam L.

Small business owners often wear many hats, and it's likely that one of those hats is "Human Resources Manager." With the ever-expanding list of federal and state employment laws and regulations, small-business owners should keep in mind a few key points to help avoid employment-related liability and ensure a productive work environment.


Know which laws apply.

Just because you're small doesn't mean you're not covered by an overlapping maze of federal and state employment laws. Some laws, like Michigan's Elliott-Larsen Civil Rights, apply to employers with even one (or more) employee. With 20 employees, you'll need to get familiar with COBRA, an acronym for a federal law that states requirements for employment related benefit continuation. At 50 employees, the federal Family and Medical Leave Act kicks in. If you know which laws apply to your business, you'll know which ones to follow.

Have effective employment documents.

The right employment documents provide important protection for your company. A properly drafted employment application can establish the "at-will" employment relationship, provide necessary authorizations, and establish limits on litigation against the company. Similarly, a comprehensive employee handbook ensures that the employer's policies, rules, and expectations are effectively communicated to employees. A company with an employee handbook also is more likely to apply policies in a consistent manner, and thus reduce the risk of discrimination, harassment and other claims.

Don't discriminate, harass or retaliate.

Let employees know the company's commitment to equal treatment. Employers do that by having (and consistently enforcing) equal employment opportunity and harassment policies, by promptly responding to complaints and by not retaliating when complaints are made.

Protect your business assets.

No business owner would ever intentionally leave their office without locking the door. Yet, business owners often fail to protect one of their most valuable business assets: trade secrets and confidential information. Business owners must take steps to protect that information from unauthorized disclosure, by implementing (and enforcing, when necessary) agreements covering such material. These include non-compete agreements, confidentiality agreements and non-solicitation agreements. Contrary to what your employees may try to convince you, when properly...

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