Law Office of Alan Kansas, LLC

Do Small Companies Have To Worry About Following Employment Laws?


Yes, small companies have plenty of employment laws they need to follow. While some employment laws only apply if a company has above a certain number of employees, a business cannot ignore employment law issues just because it is a small company.

Are Small Companies Exempt from The Laws Against Discrimination And Harassment In The Workplace?

Yes, small companies are generally exempt from the laws against discrimination and harassment in the workplace. Title VII – the federal law that prohibits discrimination in employment based on race, sex, religion, national origin or other protected categories — applies to employers that have 15 or more employees. The Age Discrimination in Employment Act, which is another federal law, applies to employers that have 20 or more employees. The Americans with Disabilities Act applies to employers that have 15 or more employees. If a company employs fewer than the required number of people, then technically speaking, it does not have to comply with those laws.

The Family Medical Leave Act (FMLA) is another important law that provides for leave for employees to deal with serious health conditions of their own or of their family members, military leaves, as well as the birth or adoption of children. This law only covers employers that have at least 50 employees. An employee who wants to take FMLA leave has to work at a location where there are at least 50 employees located within 75 miles. So, most small companies are not required to provide FMLA leave.

To determine the number of employees and whether or not the company has to comply with these laws, the courts look at the number of employees “on the payroll” for each week over the years in question. Thus, companies that hire a lot of people who only work occasionally (or who only worked a few times and were left on the payroll) have a higher likelihood of having to comply with these laws.

Another issue with small companies is that a lot of entrepreneurs have more than one business working in the same market. For example, an entrepreneur might have several restaurants operating as separate businesses. If the businesses share locations, equipment or employees, then for the purposes of calculating the number of employees and determining coverage, the court may treat the businesses as one entity under a joint employer or single business entity theory. The idea is that a business cannot avoid coverage under the law by artificially splitting itself into several entities. This is an often-overlooked issue that is worth considering. There are ways to make sure that the businesses are kept separate and to avoid being treated as a single business entity.

Is There Any Reason To Worry About Harassment Or Discrimination In the Workplace If My Company Is Exempt From The Law?

There is absolutely reason to worry about harassment or discrimination in the workplace, even if your company is exempt from the law. Discrimination or harassment based on any of the protected categories under the law is bad for productivity and morale in the workplace. If a company plans to grow, then it will reach a point where it would be legally required to comply with the laws against discrimination. But once something like discrimination or harassment takes root in a business, it’s very hard to wipe out. It’s important that a business set the tone correctly from the beginning, because otherwise, harassment or discrimination in the workplace may inhibit its growth.

There are also other practical reasons for prohibiting discrimination and harassment in the workplace. If a business is a government contractor or a government sub-contractor, then it’s likely that having and enforcing a policy against discrimination in the workplace is a requirement of that company’s government contract. A problem with harassment or discrimination might cause a contractor or a sub-contractor to lose its contract. In addition, a company that provides services or works closely with the employees of bigger companies, will be expected to know and follow the laws. If one of its employees does something discriminatory or harassing in the workplace that affects the bigger company’s employees, the bigger company would have a duty to take prompt and appropriate action in response to a complaint. This could result in the big company’s refusal to allow that employee to work with their employees, or it could cause the company to find another provider to work with altogether. Thus, discrimination and harassment in the workplace – even if it is not a legal violation by the small employer — can cause the company to lose business.

Finally, even if all the laws pertaining to sexual harassment don’t apply, there are still state, civil and criminal laws against assault and battery, meaning harmful or offensive touching. If sexual harassment (or any sort of harassment) reaches the level of harmful or offensive touching, then there may be separate civil or criminal claims brought against that employee. In severe cases, enterprising attorneys will look for a way to bring an action against the employer, especially if there is evidence that the employer condoned the conduct and failed to regulate the workplace. So, even when the anti-discrimination statutes do not directly cover employers, it’s a good idea for them to act big and put the right policies and procedures in place to prevent discrimination in the workplace.

For more information on Employment Laws For Small Companies, get the information and legal answers you are seeking by calling (504) 313-4080 today.

Alan Kansas, Esq.

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