What The IRS Tax Code And Employment Law Have In Common

Q: Last week you warned about not asking certain questions during interviews because if an applicant isn’t hired, they could claim discrimination. However, I was under the impression that discrimination laws only applied to larger companies, not to small businesses. Is this correct?

A: Technically, you are correct.

The law we all think of as the major “employment discrimination” law is actually only one section (Title VII) of the 1964 Civil Rights Act, and it only applies to businesses with 15 or more employees.

Does that mean that those with fewer than 14 employees are free to discriminate at will as well as ask whatever they want in an interview? Certainly not, and here’s why.

Even though this particular law isn’t one, small businesses with one or more employees are subject to many other employment laws, involving OSHA, minimum wage and equal pay. Trying to figure out what applies and what doesn’t is not worth the hassle.

If you think the IRS tax code is complicated and capricious, you haven’t tried to make sense of employment law.

As with taxes, there are different laws for federal, state and local jurisdictions. And just as certain IRS rules take effect as your income grows, so do certain employment laws come into effect as a business grows from 1, to 11, 15, 20 to 50 employees. Why the different numbers? Who knows. We can blame Congress, but generally, there doesn’t seem to be any rhyme or reason. So that frankly, even those of us who are supposed to know this stuff need a spreadsheet to keep track of which laws apply when and what they require from employers. Sure, some laws are hard to forget like the Affordable Care Act and Family and Medical Leave kicking in at 50 employees, but there are so many others.

My point is that, yes, technically, small business aren’t covered by federal discrimination laws, but they might be by other state or local laws; or they may not be covered today, but might be covered after the next hire. It’s simply good business practice to act as if the law applied. After all, we should not need to be compelled by the law to do the right thing. And not discriminating is the right thing.

Eva Del Rio is a human resources consultant, columnist and creator of HR Box – tools for small businesses under 49 employees. Send questions to Eva@evadelrio.com