Startups can be exciting, innovative, and fun places to work. They are often small and agile enough to respond to situations quickly and open-minded enough to spot opportunities that other companies don’t.
However, that same flexibility and lack of regard for tradition can quickly lead to problems like disregarding labor laws. That’s when working for a startup can stop being a dream and start feeling like a nightmare. Here’s what you need to know about how labor laws apply to startups and what you can do if you think your rights have been violated.
Labor Laws and Startups
Because startups are often created from nothing, they may face an uphill battle regarding how to implement policies that follow state and federal laws. While writing appropriate policies from scratch can be difficult, startups are not exempt from following the law. The three most common labor violations by startups include:
- Misclassification: Many startups attempt to save money by classifying their workers as contractors instead of employees. However, misclassifying a worker as a contractor violates employment and tax laws. The worker can’t receive the benefits they’re owed as an actual employee, and the business fails to pay the appropriate taxes for their work. It also obscures how many people actually work for the company, potentially preventing them from having to provide benefits.
- Failure to provide mandatory benefits: In California, most employers must provide workers with unpaid time off under the Family and Medical Leave Act, health insurance coverage, and retirement plans. If a startup fails to give these once it becomes eligible, it is not compensating its workers appropriately.
- Discrimination: Under federal law, all employers with at least 15 employees must follow most Equal Employment Opportunity Commission (EEOC) regulations. California expands this, requiring businesses with at least five employees to follow similar rules. If a startup with more than five workers discriminates against them because of gender, age, religion, race, or any other protected class, they are breaking the law.
What to Do If Your Rights Are Violated
If your rights have been violated by your employer, startup or otherwise, you can take action against them. Here’s how:
- Determine if your company is covered by relevant labor laws. Not every company is required to follow all laws. Your company’s size will determine whether it is held to regulations such as the mandatory offering of retirement plans and health insurance.
- Document what you have been offered. Collect paperwork such as your employment contract, employee handbooks, emails about your role and benefits, and anything else that discusses your rights and responsibilities as an employee. This will show what you’ve been offered and may act as proof if you have been discriminated against.
- Consult with an experienced attorney. With this documentation about your job and employer, consult with qualified employment law attorneys like the team at Alexander Morrison + Fehr, LLP. We can advise you on your best course of action and help you hold your startup employer accountable for providing you with the benefits you’re owed.
You don’t have to accept misclassification or missing benefits to work with a startup. Our expert attorneys are prepared to help you stand up for your rights as a California employee. Schedule your consultation today to learn how we can help.