Ask an Expert: Hold your 'fire' power and check legal issues

— -- Q: I would like to let one of my employees go, but I hear whispers that he will cry "discrimination!" if I do. That is not my reason – business is slow. What do I do? — Jim

A: I would like to say that if you are in fact not discriminating, you have nothing to worry about, but that would not be true.

In fact, questions about what is and is not legal in the workplace are so prevalent that I would like to answer this question specifically with regard to discrimination, and then more broadly – offering some legal news you can use.

Regarding discrimination: Just as there are unscrupulous employers out there who take advantage of decent employees, so, too, are there creepy employees who think nothing of suing an honest employer.

A pox on both your houses.

Here is what the law says: It is illegal to let go, or refuse to promote, or not hire in the first place, any employee because of their race, color, religion, sex or national origin. Depending upon the circumstances, discrimination can also entail age, sexual orientation, marital status, or disabilities.

The important thing then for any employer is to document their fairness, and then document some more. Create a paper trail showing that your actions, or upcoming actions, are legitimate and not discriminatory. Treat people fairly, treat them the same, and put things in writing. That way, even if you are ever, unfortunately, sued, you will have proof that you did nothing wrong.

By the same token, when interviewing, avoid asking about these things – age, race, religion, marital status, etc. – so that you can never be accused of not hiring for those reasons.

Aside from discrimination, here are some other common workplace laws you should keep in mind:

Employee status: This typically falls into two categories:

1. Exempt and non-exempt employees: The question often arises as to who is, and is not, exempt from overtime pay. The Fair Labor Standards Act says that exempt employees often hold executive, administrative, professional or outside sales positions, and irrespective of hours worked, they typically are salaried.

2. Independent contractors versus employees: It is enticing to want to call someone an independent contractor when in fact he or she is actually an employee. Why? Because with an independent contractor you are not required to

• Pay for workman's comp insurance, or• Match unemployment, or • Pay Social Security taxes

But it is also a big and potentially very costly mistake. If you are wrong and your independent contractors really are employees, the fines are serious.

Here's the basic rule: Independent contractors really are independent (e.g., they decide when, where and how their work gets done), they can work for several companies and they set their own pay and schedule.

Benefits:Surprisingly maybe, an employer is not required to give employees time off for vacation, legal holidays, or sick leave, nor pay or match health insurance. What they must do is pay at least the minimum wage, match Social Security withholdings, pay unemployment, provide workman's compensation insurance, and pay overtime if non-exempt employees work more than 40 hours a week.

Protection of proprietary information:There are several ways to protect your proprietary and/or confidential info:

Register your trademarks: Trademarks are your company logo, catch phrase, etc. These can be protected by registering them at the website for the United States Patent and Trademark office.

Get patents: Similarly, your inventions should be patented, period.

Have people sign nondisclosure agreements (NDAs): An NDA says that you are disclosing proprietary, confidential information and the recipient must keep it private, and cannot use it, without your permission.

A little legal knowledge can save you a lot of headaches.

Today's tip:If you own a small business and are not incorporated, get incorporated. Now.

Ask an Expert appears Mondays. You can e-mail Steve Strauss at: sstrauss@mrallbiz.com.And you can click here to see previous columns. Steven D. Strauss is a lawyer, author and speaker who specializes in small business and entrepreneurship. His latest book is The Small Business Bible. You can sign up for his free newsletter, "Small Business Success Secrets!" at his website —www.mrallbiz.com.