Module 07 of 08
HR basics and legal requirements
Employment law applies to small businesses in ways most owners don't realize until something goes wrong. This module covers the federal and state requirements that apply the moment you hire your first employee, the workplace postings you're legally required to display, anti-discrimination law basics, and how to know when you need outside help.
What applies to you — from day one
Many employment laws kick in based on headcount. Some apply the moment you have one employee. Others apply at 15, 20, or 50 employees. Most small businesses with under 15 employees are exempt from federal anti-discrimination law — but not from state equivalents, which often cover smaller employers.
STATE LAW OFTEN GOES FURTHER
Many states have anti-discrimination laws that cover employers with 1–5 employees — far below the federal threshold of 15. "I only have 6 people, so discrimination law doesn't apply to me" is often wrong. Check your state's employment law, not just the federal standard.
In this Module
What applies to you
Required posters
Anti-discrimination basics
When to get help
Real-world examples
Related Modules
Legal & compliance
Payroll basics
Required workplace posters
Federal law requires every employer to display certain notices in a place where employees can read them. These are not optional. Violations can result in fines even if you've otherwise done nothing wrong. Posters must be current — a poster from five years ago may be outdated.
Required federal posters include: FLSA minimum wage notice, OSHA job safety and health notice, EEOC anti-discrimination notice, EPPA (employee polygraph protection), FMLA notice (if 50+ employees), and USERRA (veteran reemployment rights). Your state will have additional required posters.
FREE AND EASY
The Department of Labor's poster advisor tool (dol.gov/agencies/whd/posters) will tell you exactly which posters you need based on your business type and size. All federal posters are free to download and print. Don't pay a company $200 for a "compliance poster package" — you don't need to.
Anti-discrimination basics
Discrimination law prohibits you from making employment decisions — hiring, firing, scheduling, pay, promotion — based on protected characteristics. Federal protected categories include race, color, religion, sex (including pregnancy and sexual orientation under current interpretation), national origin, age (40+), and disability.
In a small business context, the most common violations are not grand gestures — they're small, practical mistakes: asking a candidate if they have kids (suggests sex discrimination), paying two employees differently for the same work based on their background, or firing someone shortly after they disclosed a medical condition.
REAL-WORLD EXAMPLE
The interview question that caused a $15,000 settlement
A coffee shop owner asked every applicant "are you married?" as small talk to assess whether they'd be reliable on weekends. He meant no harm. A female applicant who wasn't hired filed a complaint with the state labor board. The question suggested sex discrimination in hiring — even though that wasn't his intent. He settled for $15,000 in back pay and legal fees. The fix was simple: ask "are you available to work weekends?" instead. Ask about the schedule, not about personal circumstances that correlate with protected characteristics.
When you need outside help
Most day-to-day people management doesn't require a lawyer or HR consultant. But some situations do. Getting help early is almost always cheaper than getting it after something goes wrong.
Get outside HR or legal help when: an employee files a wage complaint or discrimination claim; you're considering terminating someone who has recently filed a protected complaint, taken FMLA leave, or reported a safety violation; you're implementing a major policy change; or an employee injures themselves at work and you don't have workers' comp set up.
A PRACTICAL STARTING POINT
Many small business owners use a HR platform like Gusto or Rippling that includes HR advisory services for a few hundred dollars a month — cheaper than retaining an employment attorney and enough for most common situations. Reserve attorney consultations for actual disputes and serious risk scenarios.