7 Employment Law Facts All Business Managers Should Know

Generally speaking, there are three tiers to every business – the employer, the manager, and the worker. While everyone seems to look at employers way to make sure their workers are protected, not many seem to realize that it is, in fact, the managers whose duty this is. Employers rarely have the time to deal with things like these. Therefore, it is important that any business manager, at any level company, should know more than a few things about employment law.

On that note, here are some essential employment law facts all business managers should know.

1. Employment Laws Apply To Everyone


The worst mistake you can make as a business manager is thinking that just because you work at a small company or a start-up business that the laws won’t apply to you. That couldn’t be farther away from the truth. Every company is the same in the eyes of the law. Therefore, every company must obey the same set of laws.

Even though it is true that sometimes not all laws apply to all businesses, for instance, anti-discrimination laws don’t apply to businesses with less than 15 employees – all the other laws apply, too.  Whether you have one, two, or two thousand employees, the Fair Labour Standards Act universally applies.

2. You Can’t Misclassify Your Employees

It is not just IRS that’s going to care if you’ve done a little bit of “magic” with your employee’s employment status to save a few bucks.

According to Howard Levitt, the Senior Partner at the Levitt LLP, the Department of Labour will also care if you misclassify your employees in one way or another. What usually happens is businesses classify their employees as independent contractors to have them working late hours without having to pay them any extra money, among many other things.

As a business manager, you should know that that won’t fly under the employment law, and if an employment lawyer gets handed a case like this – they’re going to rip the company to shreds.

3. Background Checks Could Backfire


We’re not saying background checks are illegal or that they shouldn’t be conducted. Both you and us know that an extensive background check could provide the company with a lot of usable and vital information on a potential employee, but what it also does is increase the likelihood of being subjected to a failure-to-hire claim or any other discrimination claim.

When performing background checks, you have to know how to do it discreetly and in a way that won’t compromise your position or the company’s well-being in case a reason for not hiring comes up.

4. Overtime Pay Depends On Several Factors

There is more than one factor that plays into whether you should pay someone overtime hours or not. Many managers believe that just because they pay an employee a handsome salary that they don’t have to pay for overtime as well, or at least they hope that their employees don’t know that that’s not the case.

If an employee works more than 40 hours in a workweek, and overtime pay must be paid in accordance the both the employee’s salary and their job duties. And, this is where it gets a bit confusing because managers tend to forget about it, but it is not the job title that matters – it’s the duties. If the duties do not meet the DoL’s requirements – the overtime needs to be paid for.

Also, there are all these exceptions that vary from state to state, so it’s safe to say that managers should have extensive knowledge on this matter if they want to avoid potential lawsuits or other problems.

5. There’s No Room For Discrimination


Under the law, no employee shall be discriminated against based on their race, colour, religion, national origin, age, immigration status, genetic information, disability or right to get together to discuss or try to improve working conditions.

The discrimination is not only limited to someone being fired or refused to hire. Discrimination could also mean limiting employees’ chance to progress or be promoted or denying them any business opportunity based on the aforementioned factors.

Discrimination and harassment are the most common grounds for lawsuits, and sexual harassment suits are the ones that usually put companies in the ground. Therefore, managers should know their way around the discrimination and harassment law but also make sure to set up a non-discriminative workplace culture to ensure things like these never occur in the first place.

6. They Can Be Sued Personally

The FLSA and the FMLA both allow for individual liability, meaning that business owners, employers, managers, and every other individual working at a company can be sued personally by a current or a former employee. Employee vs employee lawsuits are not that common.

Since employees are not limited to solely suing the company that wronged them, it is not uncommon for a former employee to sue a former employer or manager personally. That happens quite often, truth be told.

The main reason behind it is that managers aren’t trained or versatile in the basics of the employment law, which causes them to make mistakes along the way, and it is because of those mistakes that they become liable for a lawsuit.

7. Termination Notice Depends On Length Of The Employment


In Canada, under the Act, employers and managers are required to give termination notices to the employees based on the length of their employment. If they don’t want to, appropriate severance pay is required.

Generally speaking, a year of employment translates to a week worth of notice in case of a termination, meaning that an employee that worked in a company for three years is due for a three-week notice, and the employee that worked there for six years is due for six-week termination notice.

If the employee has been working at the company for less than three months – the termination notice is not required.


There you have it. Those were some employment law facts that every business manager should know about. Hopefully, you’ve found these helpful.

Back to top button