Many small businesses start out with only one employee, and that employee is often also the owner of the company or one of their direct family members, like a spouse. Other times, the business may have a handful of entry-level workers, while most of the major functions fall to the boss or owner.
Whether you have one employee or 12, it’s important that you know which employment laws apply to your small business at what time. Certain employer obligations only apply to companies of a larger size, while others will apply to just about any business with paid workers.
For example, the obligation to accommodate workers with disabilities under the Americans with Disabilities Act begins when a company has 15 employees. As a small business with potentially fewer employees than this, it’s important to know which employment laws apply to your company in order to avoid violating them as you grow and hire new staff.
When you have one employee who isn’t also an owner
As soon as you have one other person on your payroll, certain rules immediately apply. First of all, you have an obligation to comply with federal minimum wage law, as well as other basic pay right laws, including overtime pay for hourly workers.
Beyond that, you must also engage in fair compensation practices, meaning that you don’t take gender or sex into consideration when determining how much to pay a worker.
When you have 15 or more employees
As your company grows, the potential for conflict within your staff will also increase. Once you reach 15 employees, you have to actively avoid discriminating based on color, race, national origin, religion, sex, pregnancy, age and disability, as well as genetic information. You must ensure that none of these traits factor into whom you hire and what you pay your staff.
You also need to ensure that staff members don’t discriminate against or harass each other, which could create a hostile work environment for which you, the employer, are ultimately responsible. Making sure that each new hire has adequate training on what constitutes harassment or discrimination and creating straightforward policies for workers to report problems can protect your business from liability and drama.
