Frequently Asked Business Law Questions
Small and mid-sized business deal with a variety of legal issues on a daily basis. Many decisions fall to the hands of management, but the best course of action is to seek legal counsel to ensure the business is protected. Our business clients call us often with questions about best practices, advice regarding operating procedures, and concerns when it comes to protecting the company. Here are three frequently asked business law questions.
If You’re Considering Firing an Employee…
Common Question: Is Three Strikes Still the Rule?
We’ve had plenty of business clients call to ask if they must give oral and written warnings before terminating an employee. Often, we find those clients are surprised by the answer, which is usually “No.” North Carolina is an at-will employment state, meaning employers have the right to let anyone go, at any time and for any reason (except for discrimination and other illegal actions).
Of course, it’s a good idea to document feedback you give to employees, especially if you think the employee may not work out. You aren’t legally required to keep these records, though. You can use whatever sort of disciplinary / gold star system works best for your business, as long as it can be enforced in an equal, unbiased way. If someone does something egregious, you can fire them on the spot; if someone is well-meaning but makes a lot of mistakes, you can allow them to retain their employment. The choice is up to you.
Key Takeaway: Documentation is your friend, and you don’t owe anyone an explanation.
Read Mathew’s guide to terminating employment for more helpful information.
If Your Employees Work Overtime (but they’re salaried)
Common Question: Do I need to pay salaried employees overtime?
Though many businesses are catching on, thanks to attention on federal and state employment laws, business owners still want to know if they are required to pay salaried employees overtime. The answer is usually yes (with the exception of those employees who meet the qualifications of exempt status). Simply putting an employee on a salary does not automatically make him or her exempt from overtime
The North Carolina Wage & Hour Act and Fair Labor Standards Act govern who qualifies as exempt, not business managers or Human Resources professionals. Talk to an experienced small business lawyer about the roles that make up your workforce and make sure you are in compliance because unpaid overtime can result in lawsuits. The consequences of those types of cases can include plaintiffs being awarded double damages & attorney’s fees.
Key Takeaway: It’s not as simple as salary = exempt from overtime.
If You’ve Had to Address a Workplace Harassment Claim
Common Question: Is the company liable for workplace harassment claims?
Maybe. If your business is aware of a harassment issue and fails to take action to protect the victim(s), the company may be found liable for harassment. Additionally, employers who take negative action against affected employees, rather than against those accused of harassment, may also be found liable. The best way for employers to protect themselves is to establish a proactive plan for preventing and handling workplace harassment.
By legal definition, harassment is a form of discrimination that violates federal law. Harassment is unwelcome conduct based on race, religion, sex (including pregnancy), national origin, age, or disability or genetic information. Harassment becomes unlawful when the offensive conduct becomes a condition of continued employment, or the conduct is so severe that it creates a work environment that a reasonable person would consider intimidating, hostile, or abusive.
Key Takeaway: Employee harassment claims shouldn’t be taken lightly & should be addressed quickly, with legal counsel.
Also, is your business OSHA-compliant with regards to preventing workplace violence?
If you need an experienced business attorney to work with your company to review processes, implement documentation, or provide legal guidance, be sure to reach out to our legal team.
In the meantime, here are three business audits your company should do sooner rather than later. We’re here to help if you have any questions.