Jump to Main Content
USA flagAn Official Website of the United States Government
Managing a Business

Blogs.Managing a Business

Register

How To Be an Ethical, Fair and Lawful Manager of Employees (While Protecting Your Interests)

Comment Count:
16

Comments welcome on this page. See Rules of Conduct.

How To Be an Ethical, Fair and Lawful Manager of Employees (While Protecting Your Interests)

By Caron_Beesley, Contributor
Published: July 24, 2013 Updated: July 24, 2013

Managing employees can be a daunting prospect, especially if you are new to it. Many small business owners started their businesses because they wanted to be their own boss, but what happens when it comes time to hire employees – what kind of leader will you be, how will you juggle your business and the regulatory requirements of being the boss?

While great leadership is often measured by your ability to lead and mentor your employees, it’s also important to remember that as an employer and manager you are required to treat all employees equally and fairly.

Sounds obvious, but as a new employer, there are a range of employment laws and regulations that you need to be aware of such as those that protect employees against discrimination and sexual harassment, wage and overtime abuse and more. Ignore these and you run the risk of creating an environment for disgruntled employees and the potential for a government investigation or lawsuit.

So what can you do to ensure you adhere to basic managerial ethics and the law? Which laws even apply to your business? Here are some tips and considerations to bear in mind to help you avoid costly managerial mistakes.

Treat All Employees Equally and Fairly

U.S. equal opportunity laws require that “covered” employers cannot make any hiring decisions based on your own bias for a certain group of people – this includes gender, race, religion, age, disability, genetic information or any other class of individual protected by the law. (Note: Not all businesses are covered by these laws. More on this below). 

Likewise, as a manger, you cannot harass employees because of race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information. If your actions are questionable in this regard, an employee may be entitled to file a charge of discrimination with the U.S. Equal Employment Opportunity Commission (EEOC). Visit the EEOC website for a complete list of equal opportunity laws that impact employers.

IMPORTANT: Not all businesses fall under the EEOC’s jurisdiction – and this may very well apply to most small businesses. For example, the EEOC does not enforce or uphold complaints of businesses with less than 15 employees for general bias against certain groups. Visit the EEOC website for employers for more information on who is covered by its laws. Also, your state may have its own equal opportunity laws, so check these carefully.

Even if you don’t fall under the EEOC laws, all employers are subject to the Equal Pay Act (EPA), which makes it illegal to pay different wages to men and women if they perform substantially equal work in the same workplace.

Other considerations to bear in mind include operating a safe and secure workplace for your employees; ensuring employees receive the appropriate meal and rest breaks, overtime pay and more.

TIP: To help you determine which laws apply to your business, read: Which Employment Laws Apply to Your Business? There’s an E-Tool for That!

Keep Good Records

Good record keeping is a must in business, and it can help protect you should an employee raise a complaint (or even a lawsuit) against you. So document and record everything – from performance reviews, 360 feedback gleaned from colleagues about a job candidate, disciplinary actions (warning notices, performance improvement plans, etc.) and so on.

Develop an Employee Handbook

It’s also a good practice to develop an employee handbook and code of conduct so you can ensure all new employees are aware of your corporate policies and procedures, as well as their rights.

Communicate any Policy Changes

Small businesses with a certain number of employees are often exempt from certain labor requirements – but as you grow or take on more employees, your compliance obligations will change. For example, most businesses with less than $500,000 in sales and only one employee aren’t required to pay overtime according to federal law. (But do note that there are exceptions for certain jobs involved in “interstate commerce.” In addition, state laws can supersede federal laws – so check carefully.) But as the business grows, you’ll need to adhere to overtime laws.

So as your business changes, make sure that you are aware of how it’s legal obligations are shifting as well. And be sure to revisit employment contracts and corporate policies so the changes are clear to your staff.

Related Blogs

About the Author:

Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Comments:

Likewise, as a manger, you cannot harass employees because of race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information.
there are four ways : keep good records, develop an employee handbook, communicate any Policy Changes, treat all employees equally and fairly to Be an Ethical, Fair and Lawful Manager of Employees.
So what can you do to ensure you adhere to basic managerial ethics and the law? Which laws even apply to your business? Here are some tips and considerations to bear in mind to help you avoid costly managerial mistakes. good article i like it
Nice post with usefull information! I hope you write more on this subject! I must say, I thought this was a pretty interesting read when it comes to this topic.
This is a great topic and well presented article! Recently I learned through working with Insureon that there is something called Employment Practices Liability Insurance, which protects against employee related lawsuits and claims related to the job. I was surprised to learn about the range of issues that it offers protection against, such as discrimination, sexual harassment, wrongful termination or discipline, negligent compensation, promotion or hiring practices and breach of contract for employment. It also deals with claims of emotional distress or mental anguish, invasion of privacy, libel or slander and employee benefits mismanagement. Unfortunately, any of these things can happen to any of us as small business owners who employ other people. It's nice to know that there is protection available in the event of unforeseen occurrences in these areas.
Excellent post on lawful manager & their ethics, being biased or racist doesn't only gives a bad name to the Manager but also to the Company too. Since every employee is selected on their merit basis, but being disrespectful towards certain number of employee, can make them demotivated towards the work, every employee should be treated alike without any kind of biasing else business cannot run affluent.

Pages

Leave a Comment

You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment.

New users, Register for a new account and join the conversation today!