Small vs. Large Business: How Does Employment Law Differ?

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Small Business vs. Large Corporation: How Does Employment Law Differ?

Small Business vs. Large Corporation: How Does Employment Law Differ?

Small business employee at work.

Many people work for small businesses rather than large corporations, but that doesn’t make them immune to workplace issues. Many people working for local shops experience issues such as workplace discrimination and sexual harassment, just like in big corporations. Being a smaller business doesn’t protect you from the problems that affect everyone else. 

If you are currently working in the small business sector, you may be wondering what protections you have. You do not have the same protections, but that doesn’t mean you have no protections at all. The employment law attorneys at Barrett & Farahany can help you if you are being discriminated against, sexually harassed, or experiencing other employee rights violations.

What is a Small Business?

Currently, small businesses employ about 46.6% of all employees in the United States. To be a small business – as defined by the U.S. Small Business Administration (SBA) – you must make between $1 million and $40 million in revenue a year and employ between 100 and 1,500 employees. 

This may seem shocking because when you think of small businesses, you likely think of local stores like bakeries, barbers, and those of that size. They definitely don’t make as much money in a year or employ as many people as a small business defined by the SBA. In reality, most businesses that you consider small businesses are technically start-ups. They are called small businesses in conversation because they’ve been around for so long. You’re not going to call the bakery that’s been around for decades a start-up, despite the fact that it only meets the revenue and employee requirements of a start-up.

To avoid confusion, this article will refer to small businesses the way you expect. We’ll be referring to businesses that have less than 100 employees. Businesses that meet the legal definition of small business are not treated differently from larger businesses due to their size. 

How U.S. Employment Law Treats Small Business Employees Differently

In the United States, employment laws are designed to protect all workers, regardless of the size of the company they work for. However, certain regulations apply differently to small businesses and work to regulate large corporations in ways that don’t affect small businesses. 

Due to the difference in size and amount of employees, small businesses, as most people understand them, have fewer standards they have to meet and will offer employees fewer protections and fewer rights.

Laws that Don’t Protect Small Business Employees

  1. Family and Medical Leave Act (FMLA): This act provides eligible employees with up to 12 weeks of unpaid, job-protected leave per year for specified family and medical reasons. However, it applies only to companies with 50 or more employees within a 75-mile radius. This means that small business employees do not have the same protections as employees who work for large corporations if they have someone they need to take care of.
  2. Americans with Disabilities Act (ADA): The ADA prohibits discrimination against people with disabilities and requires employers to provide reasonable accommodations. This only applies to employers with 15 or more employees. While this doesn’t mean employers can spew hateful language at people with disabilities, they don’t have to hire them or make accommodations for them. The law operates under the assumption that businesses with less than 15 employees cannot accommodate disabilities without incurring undue hardship.
  3. Age Discrimination in Employment Act (ADEA): This law protects individuals who are 40 years of age or older from employment discrimination based on age. The ADEA’s protections apply to both employees and job applicants and cover employers with 20 or more employees. Again, a business cannot spew hateful language toward an employee, but they do not have to provide accommodations to older employees, especially if their age affects their ability to work if they don’t have an accommodation. A business with less than 20 employees is assumed to be unable to consistently provide accommodations.
  4. Affordable Care Act (ACA): Under the ACA, employers with 50 or more full-time employees (or equivalents such as contractors) are required to provide health insurance to at least 95% of their full-time workers and dependents up to age 26, or risk a tax penalty. Employers with fewer than 50 do not have to, so don’t expect to be guaranteed healthcare by an employer this small.
  5. Title VII of the Civil Rights Act of 1964: Title VII prohibits employment discrimination based on race, color, religion, sex, or national origin. This law applies to companies with 15 or more employees. Unlike other laws, there are several other federal laws that do protect employees against discrimination in the workplace, such as the Civil Rights Act of 1866, Section 1981, the Equal Pay Act, and the Fair Labor Standards Act. This means that your employer cannot treat you differently or pay you differently based on your race if you work for a small business. You simply cannot use Title VII as the basis for your argument if you need to sue them, but other acts instead.

These differences highlight the government’s attempt to balance the need to protect employees’ rights with the regulatory burden on small businesses. Despite these variances, all employers – regardless of size – are obligated to maintain a safe and non-discriminatory workplace.

What Should You Do if You Experience Workplace Discrimination, Wage Theft, or Worse While Working for a Small Business?

Working for a small business does not mean you have to subject yourself to abuse and theft. Small businesses may not have the same regulations, but this does not mean that they are completely free to treat you poorly. 

Contact our employment law attorneys. We will help you fight against the situation in your workplace and get you the compensation you deserve for the discrimination, wage theft, sexual harassment, or worse that you have experienced at your place of employment.

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