Small business employment laws that formerly exempted small chiropractic offices are changing
Employment laws throughout the United States continue to broaden, not only in what conduct is prohibited, but in the number of companies now covered by the laws.
While many small chiropractic offices may believe these laws do not apply to them, the elimination of many thresholds which formerly limited these statutes to larger employers make chiropractors now take notice. Though not an extensive list, below is a discussion of some of the small business employment laws that should be on a chiropractor’s radar.
Sexual harassment protection
In recent years, worldwide movements such as #MeToo have been founded to help survivors of sexual violence and harassment. With the support of celebrities and politicians, the #MeToo movement has led to a renewed focus on sexual harassment laws.
Due to the heightened awareness of sexual harassment, local governments have sought to broaden employment protection and prevent workplace harassment regardless of the size of the employer. As such, employers are encouraged, and in some states mandated, to adopt a sexual harassment policy that includes a complaint procedure for employees wishing to report alleged incidents of sexual harassment.
In New York, for example, employers of any size must provide a written sexual harassment policy that includes a detailed complaint protocol for allegations of sexual harassment. The law also requires a complaint form be provided to employees with space for employees to report, among other things, the date of the alleged sexual harassment, whether the sexual harassment is still occurring, and personal information of the accused perpetrator.
Sexual harassment staff training and small business employment laws
In addition to a standard complaint form, states like New York mandate that employers provide annual sexual harassment training for their employees. The training must be interactive, meaning employees are given the opportunity to engage in conversation and answer or ask questions. The training must also include an explanation of sexual harassment, examples of conduct that would constitute unlawful sexual harassment, information concerning employees’ right of redress, and information addressing a supervisor’s responsibilities for when an employee alleges sexual harassment.
For states that require sexual harassment training procedures, an employer should abide by the state’s controlling law. For chiropractors in states where such training is not yet mandated, training is still highly recommended as it could serve to clarify the type of conduct that is not accepted in the workplace and guide employees on ways to avoid it. The training of all employees of a chiropractic office not only serves to prevent sexual harassment, but it also may be used under federal small business employment laws to establish that the chiropractic office took steps to prevent harassment and perhaps avoid liability if a claim is later filed.
Wage, hour and overtime pay
The obligation to comply with the provisions of the Fair Labor Standards Act (FLSA) also extends to most chiropractic offices. Rather than relying on the number of employees to determine if the law applies to an employer, the FLSA relies on gross receipts. Specifically, if a business generates more than $500,000 in gross receipts per year, the provisions of the FLSA apply.
Overtime Pay — Generally, the FLSA requires that employers pay employees overtime wages of one-and-one-half times the regular rate of pay if the employee works over 40 hours per work week. However, an employer will not be required to pay an employee overtime if the employee is deemed “exempt.” To be exempt, one must consider:
(a) whether the employee is paid by salary and if it surpasses the minimum weekly threshold; and
(b) the duties of the employee.
Effective January 2020, under federal law, an exempt employee must be paid a salary of at least $684 per week in addition to performing exempt job duties, such as a professional, executive or administrator. In other words, simply paying an employee a weekly fixed salary does not mean the employee is necessarily exempt under new small business employment laws.
Chiropractors, for example, may qualify as exempt under the professional exemption, and therefore are not entitled to mandatory overtime pay. However, a chiropractor’s assistant or receptionist may not be deemed a “professional,” and therefore must be paid overtime. Of course, the individual’s job title is not enough to determine an exemption. An analysis of the individual’s duties is critically important.
Minimum Wage — The FLSA also requires employers to pay employees at least the federal minimum wage. Currently, the federal minimum wage is $7.25 per hour. However, most states also have minimum wage laws that establish a minimum wage that may be higher than the federal standard. For example, the minimum wage in New York is currently $15 per hour. In addition, the salary threshold for exemptions in each state may be considerably higher than the FLSA threshold.
Time-keeping Requirements — The FLSA also requires that employers maintain certain records of non-exempt employees, meaning employees who are required to receive overtime pay. The FLSA specifically requires that the records include identifying information about the employee, and data about the hours worked and the wages earned.
Among other things, an employer must make record of the employee’s full name, social security number, address, sex and occupation, time and day of the beginning of the employee’s work week, total hours worked each work week and total wages paid each pay period. Under federal law, records should be preserved for at least three years. Notably, however, many states require that records be maintained for a period longer than three years, sometimes for as long as six years.
Independent contractors vs. employees and small business employment laws
Many chiropractic offices hire independent contractors in order to reduce employment taxes, save on benefits and protect against liability. However, it is pivotal that employers are aware of the differences between independent contractors and employees. The failure to properly classify an independent contractor may result in significant penalties and the imposition of back taxes demanded by the IRS.
In order to determine whether an individual is an independent contractor or an employee, it is important to consider factors set forth by the “economic reality” test set forth by the U.S. Supreme Court, which includes:
- The degree of control exercised by the alleged employer;
- The extent of the relative investments of the alleged employee and employer;
- The degree to which the “employee’s” opportunity for profit and loss is determined by the “employer;”
- The skill and initiative required in performing the job, and;
- The permanency of the relationship.
Generally, an independent contractor performs services that cannot be controlled by an employer. In other words, an independent contractor has freedom to conduct their services as they wish. On the other hand, employees are subject to the control of their employer.
In sum, simply calling a worker an independent contractor is not enough. An independent contractor relationship must be able to withstand the scrutiny of review by the United States Department of Labor or other agency. Moreover, some states may have an even stricter standard, thus compelling chiropractors to analyze their existing relationships to ensure they can withstand scrutiny.
Size doesn’t matter
It is crucial that all chiropractic practices, often regardless of size, ensure compliance with applicable federal and state labor and employment laws.
As addressed above, compliance is achievable as long as attention is properly paid to the applicable regulations. The failure to comply with same can spell trouble for even the best-intended chiropractor.
Keith Gutstein is co-chair of the Labor & Employment Law Practice Group at Kaufman, Dolowich & Voluck LLP, a national litigation law firm, where he concentrates his practice in labor and employment law and has experience defending employers in diverse areas of employment and labor law, such as employment discrimination, sexual harassment matters, and wage and hour lawsuits. He can be reached at firstname.lastname@example.org.
Kaitlin Silletti is a law clerk at Kaufman Dolowich & Voluck who focuses on labor and employment law. She can be reached at email@example.com.