3 Employment Law Essentials for Small Employers

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					3 Employment Law Essentials for Small
The number of federal and state laws and regulations that govern the workplace is ever
increasing. Having a basic understanding about employment laws is important to avoid making
mistakes that can lead to costly litigation. Below are helpful tips regarding three (3) issues that a
small business should pay particular attention to in order to protect its business and stay out of

1. Implement an Employee Handbook

Every business should have its personnel policies clearly set forth in an employee handbook. An
employee handbook is the most effective way to establish rules, benefits and expectations.
Employee handbooks are also an effective tool to help employers ensure consistent treatment of
employees. This is important, because many employment discrimination lawsuits are based on
inconsistent application of rules. Once an employee handbook is created it should be updated
and kept current. It is a good practice to review the handbook each year. Any changes to the
handbook should be communicated to employees in writing.

2. Protect Company Information & Relationships

Many employers do not understand that their employees may lawfully make plans to enter a
competing business while they are employed. One way to protect your company’s competitive
information and customer relationships is to have your employees sign agreements that contain
covenants against competition, solicitation of clients, recruitment of employees, and use of
confidential information. In addition, employers should also develop, disseminate and train
employees on policies concerning the use of company-issued computers and electronic devices.
It is important to limit access to databases, documents or devices containing sensitive
information through the use of passwords. Additional safeguards include labeling sensitive
documents as “confidential” or “secret”; discarding and shredding printed copies of sensitive
documents after use; and prohibiting employees from taking confidential information home with

3. Pay Your Employees Properly

The number of wage and hour lawsuits is rising, especially lawsuits based on failure to pay
overtime. It is a common misconception that if an employee is paid a salary the employee is
exempt from the overtime laws. In order for an exemption to apply, an employee’s salary and
specific job duties must meet all the requirements of the Department of Labor’s regulations. To
meet the salary test, for example, employees must be paid on a salary basis at not less than $455
per week ($23,660 annually). Employees earning less than this threshold are not exempt and
must be paid overtime. Actual job duties must also fit within the regulations.

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Problems also arise when employers fail to pay employees for all compensable time. For
example, break periods of short duration, usually 20 minutes or less, must be counted as hours
worked. Other common pitfalls to avoid include failure to maintain pay records as required by
law, failing to pay for certain travel time and for time employees spend donning and doffing
protective gear, and making improper deductions from exempt employee paychecks.

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Given the expected rise in regulatory oversight, it would be prudent for employers to make sure
that they have policies that are in compliance with federal and state employment laws. By taking
proactive measures, an employer can also protect its information and better position itself for
growth and success.

Kenneth N. Winkler is a shareholder in Berman Fink Van Horn, P.C., an Atlanta based law firm. Ken’s practice is
concentrated in the area of employment law. Ken has extensive experience working with entrepreneurs, and small
privately held businesses and he is particularly effective in drafting employee handbooks, employment agreements
and non-compete agreements. Ken may be contacted at or 404.261.7711.

The legal information provided in these articles is general and should not be relied on as legal
advice. Legal advice cannot be given without full consideration of all relevant information
relating to your individual situation.

© 2011 Apptivo Inc. All rights reserved.

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