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Understand labor laws before hiring

November 26, 2012 

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Sorting through employment classifications and wage requirements can be confusing for a small business owner.

Connie E. Carrigan, an attorney with Raleigh’s Smith Debnam Narron Drake Saintsing & Myers, shared information about labor laws and best practices with Shop Talk reporter Virginia Bridges. Here’s an edited version of Carrigan’s comments.

Q: What is a common mistake that small business owners make?

A: Not documenting all aspects of the employment relationship. Having an employment manual which sets forth the employer’s expectations is important for employees and government entities which may be overseeing your practices. Disciplinary actions should be documented contemporaneously with the action taken.

Wage records need to be in writing, and changes in wage payment need to be provided in advance. Job descriptions should be in writing, particularly if the worker is classified as exempt, and agreements with independent contractors need to be in writing and signed by both parties.

Q. What laws apply to seasonal workers?

A. Seasonal and holiday workers are generally hourly workers, often part time, as needed by the employer. The same laws relate to their method of pay as for other hourly employees. They must be paid at least minimum wage and are entitled to overtime compensation if they work more than 40 hours in a work week.

Q: Are there any legal pitfalls with hiring part-timers to avoid paying insurance costs mandated by the Affordable Health Care Act?

A: Full-time employees work a 40-hour week and receive benefits, such as health insurance and paid time off, that part-time employees might not get. However, employers must follow the provisions of the Fair Labor Standards Act and the N.C. Wage and Hour Act for both types of employees with regard to minimum wage, overtime and child labor. There are no clear legal pitfalls associated with hiring part-timers; however, the level of employee engagement and commitment may be impacted by this practice.

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