an employee from the payment of overtime. Salaried employees may be entitled to overtime pay if their job description encompasses nonexempt functions such as customer service or clerical duties. This is the reason that every employer should actively conduct audits of employee classification and streamlining practices regularly, to ensure compliance. 4. Myth: Independent Contractors Don’t Need Legal Protections A frequent mistake employers make is classifying employees as independent contractors. Employment law for independent contractors and employees is quite different and misclassifying can lead to issues under employment law. It is also possible for ‘contractors’ to be employees under the law. If ‘contractors’ perform core business functions and are under the control of a business, they are employees for misclassification purposes and the business must pay employment taxes on them. 5. Myth: Unused Vacation Time Does Not Need to be Paid When an employee leaves, some employers believe they can ignore that constitute legal retaliation, discrimination, or for whistleblowing is unlawful. Additionally, the intern or employee may assert a right to damages for wrongful termination under a theory of breach of the implied covenant in good faith and fair dealing arising in contract or for breach of the employment contract, or an applicable statute. Hence, legal advice is recommended, and the reasons for the termination should be documented and legally verified. 3. Myth: Salaried Workers Are Exempt from the Need for Overtime Compensation Many mistakenly believe that a salary excuses employees from receiving overtime pay. Under the Fair Labor Standards Act (FLSA), the specific duties and salary of the employee will determine the exemption of paying that employee for unused vacation time. However, employers in Minnesota are subject to the laws of the state and the employer's written policies. If an employer's policy states that employees will be paid for unused vacation time, that employer needs to pay them and abide by the policy. To avoid issues of violating the state’s law, employers must ensure that policies are clear, consistent, and legally compliant. 6. Myth: Verbal Consent is Enough While verbal agreements or handshakes might seem convenient, they come with risk. Without a written employment contract or policy, it is difficult to ascertain what was agreed to in the case of a dispute. Written agreements offer protection to both the employer and the employee by outlining expectations, pay, and responsibilities in detail. To avoid confusion, the terms of employment must always be put in writing. 7. Myth: Equal Opportunity Laws Don't Apply to Small Businesses Some owners of small businesses tend to think their businesses are too small to fall under the Equal Employment Opportunity Commission's (EEOC) regulations. Small businesses may be exempt from some rules, but the wage, At-will employment does not give employers a free pass. Terminations must always be based on lawful, documented reasons. SPECIAL FEATURE 33
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