Does 2025 include growing the number of people working at your business?
We sure hope so! After all, bringing on new employees means your company is growing and succeeding. We love to see companies expand by creating jobs and providing a career for someone who is looking – or needs – a change.
Hiring employees can be difficult, however, and not just the process of finding the right person. You want to make sure when you find the right person they have the tools, training and structure for their personal success.
That means before bringing them on as a new employee you need to ensure your policies, procedures and much more are up to date. Of course, having those will also lessen the chance of conflict while the employee is at your company – and make the transition smoother when their time at the company is finished.
The attorneys at The Orlando Law Group have a long history of helping businesses with their employment matters, particularly creating the legal documents any company should develop before bringing on an employee.
Is the new hire an employee or an independent contractor?
In today’s gig economy, the lines between an employee and an independent contractor are continually blurring and the punishment for getting this aspect of your workers wrong is substantial, including severe fines for classifying employees as independent contractors and back pay for the employee.
That’s why it is critical that before you bring on new workers, you are very clear about whether they are independent contractors or employees.
In 2024, the U.S. Department of Labor issued its final rule on how to determine if someone working for a company can be classified as an independent contractor. A background on the rule can be found here, but in a nutshell, you want to consider (among other things) “The Economic Reality Test.”
The six factors that go into that test are:
- Opportunity for Profit or Loss Depending on Managerial Skill. Basically, does the worker have an opportunity to earn money based on marketing their skills to a wide range of clients, or is their pay and jobs assigned by the company? An employee has their jobs assigned and work extra hours to make more money.
- Investments by the Worker and the Potential Employer. Do you buy the computer for your worker or do they purchase their equipment? Does the worker have their own Google account, or do you provide it? If you are investing in the worker’s equipment and tools, then the worker is an employee.
- Degree of Permanence of the Work Relationship. Can the worker work for multiple companies like yours? Can the worker turn down an assignment that you require? If the answer is no to either of these questions, the worker is an employee.
- Nature and Degree of Control. The Department of Labor has a full checklist for this factor. You are hiring an employee if you:
- “set the worker’s schedule;
- “supervise the performance of the work;
- “explicitly limit the worker’s ability to work for others, or place demands or restrictions on workers that do not allow them to work for others or work when they choose;
- “use technological means to supervise the performance of the work;
- “reserve the right to supervise or discipline workers; or
- “control economic aspects of the working relationship, such as the prices or rates for services and the marketing of the services or products provided by the worker.”
- Extent to Which the Work Performed is an Integral Part of the Potential Employer’s Business. The key here is not that the worker is critical to the business, but rather that what the worker does for the company is critical to the company’s success.
- Skill and Initiative. Of course, your worker is highly skilled, but does the worker use that skill to generate additional work for themselves, or is it focused on what you want the worker to do? If that skill is used for the position exclusively, you are hiring an employee.
To add more complexity, these are not the only factors that could determine if a worker is an employee or a contractor. That’s why it is important to have an attorney review this aspect before a worker starts at your business.
You can read more at the Department of Labor’s fact sheet here.
Does the new hire have a job description?
Hiring any employee is a critical step for your business. As such, you want to ensure you are as clear as possible about what is expected from the position and the new employee.
That means you need a job description written out for both you and the employee to have the road map for success – and you lessen the opportunity for future legal action.
According to the Society for Human Resources Management, here are the items every job description should have:
- Job title
- Classification: Exempt or nonexempt under the Fair Labor Standards Act.
- Salary grade/level/family/range.
- Title of the position the person performing this job reports to.
- When the job description was written or last reviewed.
- Summary and overall objectives of the job.
- Essential functions of the job.
- Knowledge, skills, and abilities needed for the job.
- Supervisory responsibilities.
- Work environment: Factors that will affect the person’s working conditions while performing the job.
- Physical demand of the job.
- Position type and expected hours of work.
- Percentage of travel time expected for the position where the travel occurs and whether it is overnight.
- Required education and experience.
- Union eligibility.
- Additional eligibility qualifications:
- Affirmative action plan/equal employment opportunity (AAP/EEO) statement.
- Other duties: Disclaimer
From an attorney’s viewpoint, the last two are extremely important. Showing that your company is an equal opportunity employer is key to showing you are following federal regulations.
The disclaimer should say the job description can and will change without notice and that it is not a comprehensive list of duties required of the employee. After all, it will take time to review the strengths and weaknesses of the new hire. The job description should change based on this review.
Did the new hire get an offer letter?
Much like the job description, the offer letter is an important part of the onboarding process because it has all the details in writing about what is included in the new employee’s compensation.
It is crucial to have this written in a document as a misunderstanding during the hiring process could cause the job search to start over and perhaps lead to litigation.
Here is what Indeed says should be in an offer letter.
- Job title
- Base salary
- Start date
- Employment contingencies, such as background checks, drug screenings, reference checks, I-9 forms, etc.
- At-will statement
- Description of job responsibilities
- Manager/supervisor name and title
- Workplace location and expected working hours
- Additional compensation potential, such as bonuses, profit-sharing, stock options, etc.
- Employee benefits, such as insurance coverage, 401(k), paid time off, etc.
- Offer letter expiration date
While the offer letter is not a contract, per se, it can be used in litigation and should always be reviewed or written by an attorney.
Does the new hire require an employment contract?
In Florida, an employment contract is not required for any employee. Florida is an at-will work state, meaning a company can fire an employee at any time for any reason that is not illegal. Of course, the employee can quit for any reason without punishment too.
That said, for many positions, particularly management or highly skilled employees, an employment contract is encouraged to give both the employee and the company the confidence to work together.
When there is competition for an employee, like a physician or an engineer, the employment contract gives the employee confidence to work for your business. Likewise, it helps give the company confidence that an investment into that employee won’t be wasted by the employee leaving for a competitor.
Plus, if you own a company with a lot of intellectual property or trade secrets, you’ll want an employee contract to manage the control of your IP.
The job description and the offer letter cover the employee’s tasks at the company and those should be included in the employment contract. More importantly, however, is that the employment contract covers what happens at the end of the employee’s time at the company.
Here are a few questions to consider:
- What are the reasons that an employee can be terminated?
- If you need to terminate the employee, what will be the severance package?
- If the employee decides to leave early, how does the employee compensate the company for any investment in training or continuing education?
- What will be the punishment if trade secrets or intellectual property is shared with a competitor, basically non-disclosure language?
- Can the employee leave to work immediately for a competitor? The enforceability of non-compete clauses has been involved in legal proceedings, but, as of now, they are legal.
- Who owns the work product of the employee? This is particularly important for creative positions, like graphic designer.
- What would be the venue to mediate any disagreements to help prevent litigation?
Understand, that the employment contract also binds you and often makes it more difficult to fire a bad hire, but by having this contract, there should be little disagreement on the processes to end an employee’s time at your company.
The attorneys at The Orlando Law Group can help make sure your business in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida are ready to hire great employees and make their onboarding and exit much smoother.
If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.
Last Updated on January 22, 2025 by The Orlando Law Group
