Employment law is a collection of different statutes, regulations and legal doctrines created over the years to govern the employment relationship. Before modern times, employment relationships were entirely “at-will” – meaning that either side could end the relationship at any time for any reason or no reason. Early last century, U.S. courts often ruled that the Constitution prohibited laws that tried to regulate the employment relationship.
Since then, many laws have been passed to reduce abuses and ensure equal opportunity in employment. The federal government took the lead in passing many of these laws, and even now one main source of employment law remains federal statutes first enacted in the mid-20th century.
In the 21st century, employment law has expanded and statutes have been passed by states and localities that cover almost every aspect of employment. Nevertheless, the relationship remains subject to mutual agreement in a number of key respects.
When it comes to helping business owners and assisting in corporate formation and management, Jeff carefully explores every option and describes every aspect to each client in layman's terms. These issues include choice of corporate form, where to incorporate, how to structure and staff the business, and key considerations to ensure legal compliance. He focuses on taking care of the legal basics to leave you free to succeed at your business.
Whether you are looking to start a new business, have an employment lawyer review your current employment policies and practices, or expand your business, you can count on Jeff.
The Fair Labor Standards Act (“FLSA”) describes how most employers must compensate their employees for hours worked. The FLSA generally requires employers to pay overtime compensation to employees who work over 40 hours in a workweek, unless an exemption applies to the employee's duties and the employee is paid the required minimum salary for all hours worked in a week. The Department of Labor has proposed regulations to the FLSA to require overtime compensation for more employees.
Currently to satisfy the salary basis test, employers must pay an employee at least $455 per week (which is $23,660 annually) as a salary for all work performed in a week. This means that the employee’s salary cannot be docked for partial-day absences except in limited circumstances. (Otherwise the employee is essentially paid on an hourly basis.)
Under the duties test, the majority of an employee’s duties must be exempt Executive, Administrative, or Professional work, or certain types of outside sales or high-level computer work. Generally this test can only be met if the employee exercises discretion and independent judgment in his or her work and is not being directed by another, or if the employee supervises two or more employees, is paid over $100,000 a year on a salary basis, or has a graduate degree or above for the job.
Federal law also requires that employers pay the employment taxes of all employees, which include social security taxes. An employer cannot avoid this obligation simply by calling an employee an independent contractor and sending the employee a Form 1099 rather than a W-2 after the end of each year. An independent contractor must exercise control over the method and manner of performing his or her duties, use his or her own tools for performing the job, and otherwise work on a finished product or service to be provided. Employees forced to pay their own employment taxes can recover these payments from the employer.
State law generally requires that employees be paid wages on a regular basis (weekly, bi-weekly, semi-monthly or, in some cases, monthly). State law also limits the types of deductions that an employer can make from an employee’s wages, and the length of time a company can wait after terminating an employee before paying final wages.
Because of the complexity of the federal and state laws covering payment of wages to employees, employers are often confused and do not act in compliance with the law. As a result, consultation with a qualified attorney knowledgeable in federal and state law is an essential first step to ensuring compliance.
Non-competes are disfavored by the law in most states, including Virginia. They generally run counter to the prevailing public policy in favor of free and open competition. Nevertheless, non-competes may be valid and enforceable if they are supported by a legitimate business interest of the employer and are narrowly tailored to protect that interest. As a result, a non-compete should never be offered or signed without first obtaining legal advice from experienced counsel.
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