Welcome to the world of entrepreneurship! As a new entrepreneur, there are many things you must learn – and employment law is one of them. The last thing you want is to find yourself on the wrong side of the law, and that’s why it’s essential to have a basic understanding of employment law.

In this blog, we’ll go over a few key points you should keep in mind as you build your business. From hiring employees to terminating them, we’ll cover what you need to know.

Hiring employees

As an entrepreneur, you’ll likely be eager to hire employees to help grow your business. But before you start recruiting, there are a few things you should know.

Writing job descriptions

A well-written job description can help attract qualified candidates. Be specific about the skills and experience required for the position, as well as the duties and responsibilities. Also, make sure that your job description is not discriminatory or biased.

📝 Tip: When writing job descriptions, use gender-neutral language and avoid stereotyping. For example, avoid using phrases like “strong,” “assertive,” or “dominant.” Instead, use neutral terms like “confident” or “reliable.”

A job posting for a software developer with a description of the position's duties and qualifications highlighted

Conducting interviews

When conducting interviews, be sure to ask questions that are relevant to the job. Don’t ask personal questions or questions that could lead to discrimination. Always treat all candidates fairly and equally.

📝 Tip: Create a list of interview questions before each interview. This will make sure you ask each candidate the same questions and compare their answers objectively.

A group of candidates sitting in a waiting room before a job interview

Wage and hour laws

Once you’ve hired employees, you’ll need to make sure you’re following wage and hour laws. These laws dictate things like minimum wage, overtime pay, and work hours.

Minimum wage

The federal minimum wage is $7.25 per hour, but some states and cities have higher minimum wages. Make sure you know what the minimum wage is in your area and pay your employees accordingly.

📝 Tip: Check with your local/state government to see if there is a minimum wage increase scheduled in the near future.

A paycheck showing the gross and net wages of an employee

Overtime pay

Under federal law, employees are entitled to overtime pay if they work more than 40 hours in a workweek. The overtime pay rate is one and a half times the employee’s regular pay rate.

📝 Tip: Make sure your employees are classified correctly under the law. Exempt employees (executive, administrative, or professional positions) are exempt from overtime pay.

A time sheet showing employee worked 48 hours with 8 hours overtime

Terminating employees

Terminating an employee is never easy, but sometimes it’s necessary. It’s important to follow the law when terminating an employee to avoid legal trouble.

At-will employment

Most states have at-will employment, which means that either the employer or the employee can terminate the employment relationship at any time, for any reason (or no reason at all).

📝 Tip: If you want to protect yourself from potential legal issues, clearly state in your employee handbook that your company practices at-will employment.

An employee gathering their things from their desk as they leave their office building after being terminated

Wrongful termination

Wrongful termination occurs when an employee is fired for discriminatory or illegal reasons. Some reasons that could lead to wrongful termination include discrimination based on age, race, gender, religion, etc.

📝 Tip: Before terminating an employee, make sure you have a legitimate and non-discriminatory reason for doing so.

An image of a courtroom with a judge's gavel and scales of justice

Conclusion

As an entrepreneur, you’ll encounter many challenges along the way – and employment law is one of them. But with the tips in this blog, you should have a better understanding of employment law and how to apply it to your business.

Remember, it’s always better to be safe than sorry. Taking the time to understand employment law now can save you a lot of headaches down the road.

A group of entrepreneurs gathered around a table, discussing a business plan