Protecting Employers Since 1985

The Benefits Of Conducting A Self-Audit On Your Company

Employment law issues run the complete range from discrimination and harassment to unsafe conditions – but one thing remains the same: If you as the employer are violating a law you could be opening your company and yourself to liability. Below are common employment laws to conduct an audit on.

Common Employment Law Issues

Common employment law issues involve things like:

  • Discrimination
  • Harassment
  • The Family and Medical Leave Act
  • Minimum wage disputes
  • Overtime disputes
  • Salary misclassification
  • Wrongful termination

It would be well advised that employers look at these issues carefully and make sure they are in compliance with state and federal laws.


Discrimination is still a significant problem in companies today. Discrimination is unjust or prejudicial treatment against people who have certain characteristics. Workplace discrimination usually relates to: age, disability, genetic information, pregnancy, race or color, religion, national origin and sex.

Discrimination is when the employer takes an adverse employment action against a person because of their protected status. Does this mean that the company can’t make normal business decisions? No, but what it does mean is that employers need to be prepared to explain the legitimate non-discriminatory reasons for the actions it takes.


Harassment is illegal – under states and federal law as well. Be aware that an employee can be harassed because of their: age, ancestry, color, gender, gender expression, gender identity, genetic information, marital status, medical condition, mental and physical disability, military or veteran status, national origin, race, religious creed, sex and sexual orientation.

There are two types of harassment that occur in workplaces: hostile work environment, which involves harassment so severe or pervasive that it creates hostile working conditions, and quid pro quo sexual harassment, which generally involves the trading of sexual or romantic favors for favorable conditions at work. Employers would be well advised to train supervisors regarding discrimination and harassment and have these topics discussed throughout the year to keep these issues fresh in supervisors minds.

The Family and Medical Leave Act

The Family and Medical Leave Act, or FMLA, is a form of worker protection that gives certain employees up to 12 weeks of unpaid leave per year. This leave can be used for things such as:

  • The birth and care of a newborn child.
  • Placement of a child for adoption or foster care.
  • Caring for an immediate family member who has a serious health condition.
  • Inability to work due to a serious health condition.

These are just the very basics of the FMLA. Company owners and human resources personnel should have a thorough knowledge of the FMLA and how it works, is administered, and what employers need to do to be in compliance with this law and possible state laws that provide similar protections.

Wage Disputes

Wage disputes are some of the most common employment law issues. For many states, the state minimum wage is much higher than the federal minimum wage, and when a state law provides a higher wage than the federal law does, employers must adhere to the state requirements. Employers are required to pay employees the higher of the state or federal minimum wage. This topic is very large, just like the topics set forth above, for example are your employees exempt from paying time and a half (are your employees considered exempt?) If your employees are not exempt from being paid overtime (and assuming there is not a union contract involved) the employer normally has to at least pay time and a half for any hours the employee works over 40 hours in a week.

Overtime Disputes

Like above, as an employer you are required to pay overtime if an employee works over a certain number of hours in a week. The rules are as follows: in most states, if an employee works 40 or more hours in one workweek the employer is required to pay the employee 1.5 times their hourly rate. Employers will need to make sure of what the rules are in each specific state.


Salary misclassification occurs when an employer says a worker is an employee or an independent contractor. It is important to know the requirements for classifying a person as an independent contractor or an employee. Check out the table below to see the differences between contractors and employees.

Can work for more than one company at a time.Typically only works for one employer.
Sets own hours.Works at time and for durations set by employer.
Works from any location.Generally works in the employer’s place of business.
Does not receive employment benefits such as health insurance and sick pay.Is eligible for employment benefits, such as health insurance, sick pay or overtime pay.
Works independently often or most of the timeWorks under the employer’s control.
Can perform tasks in any manner, without the employer’s input or direction.Is subject to the employer’s guidelines on performing tasks.
Bears costs associated with performing the job.Does not incur costs or make personal investments associated with performing the job.
Pays own taxes, employer does not withhold taxes.Employer withholds taxes and provides employee with a net wage.
Can be “let go” without reason or noticeCan usually be terminated for good cause and with notice, unless employment is of a different nature.
Receives pay according to a contract’s terms and conditions.Receives at least federal or state minimum wage and is covered by employment laws like overtime pay.


Wrongful termination occurs when an employer fires or lays off someone for an illegal reason. For example, an employee can be fired or “let go” for a series of bad performance reviews, showing up late or even calling in sick – but cannot be fired because of: race, color, creed, nationality, religion, gender, sexual orientation, etc. – a protected category.

Employers also can’t fire an employee for being a whistleblower, working with prosecutors or being a victim of sexual harassment. Employers can’t fire an employee for refusing to commit a criminal act, taking time off to vote or serve on a jury, to participate in military service, or for claiming rights under the Family Medical Leave Act.

This is just a general checklist of issues to consider when you are conducting a self-audit. There are many other issues that employers should review as well. If you need help with conducting an employment audit, please contact Joseph H. Laverty at 563-333-9102 or by email.

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