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Raleigh legal briefing: employers must watch worker classification, overtime rules and anti‑discrimination thresholds
Summary
Smith Anderson employment lawyers told small employers that federal anti‑discrimination laws, wage‑and‑hour rules and proper classification of workers as employees or independent contractors each carry distinct compliance tests and financial risks.
Lauren Davis and Kevin Keglowski of Smith Anderson told attendees that federal anti‑discrimination laws take effect once employers meet employee‑count thresholds (for example, Title VII and the Americans with Disabilities Act typically apply to employers with 15 or more employees). Davis said employers should track whether state or federal statutes apply as headcount changes.
Davis summarized federal protections against discrimination (race, color, national origin, religion, sex, pregnancy, disability and age) and noted obligations under the Americans with Disabilities Act to provide reasonable accommodations unless they impose an undue hardship.
On wage and hour, Davis told employers to classify workers as exempt or non‑exempt under the Fair Labor Standards Act and to pay non‑exempt employees at least the federal minimum wage and overtime at 1.5× for hours over 40 per week. She outlined common exemptions (executive and administrative) and the salary‑basis test (salary minimum cited $684/week), and warned that unpaid “off‑the‑clock” work is not lawful.
Kevin Keglowski focused on independent‑contractor classification and noncompete/non‑solicit agreements. He said federal and state rules differ and cautioned employers that misclassifying employees as contractors can expose the business to payroll tax liabilities, wage‑and‑hour claims and civil penalties. Keglowski advised small businesses to default to employee classification unless facts support contractor status, and to be cautious about paying finders or unregistered brokers for sourcing workers or investors.
On noncompetes, Keglowski said law varies by state and courts will scrutinize scope, duration, territory and consideration. He noted several states ban or limit noncompetes and that the federal ban proposed by the FTC was tied up in litigation at the time of the presentation. He recommended narrowly tailored non‑solicit and confidentiality protections as often more enforceable than broad noncompetes.
Ending: Employers were advised to adopt clear handbooks and written policies, keep accurate time records, verify I‑9 compliance, and consult employment counsel before changing worker status or imposing restrictive covenants.
