Welcome to The Jayson Law Group LLC’s series on The Legal Aspects of Starting a Small Business in New Jersey series. In our tenth video, we will explore the rules around hiring and firing an employee.
What is At-Will Employment?
New Jersey is considered an at-will employment state, which means that employees do not need an employment contract to work for a given business. Nonetheless, while not expressly required, you may still wish to create an employment contract in order to outline information such as salary, rights and responsibilities, and general expectations.
Depending on the type of work involved, you may also wish to include a non-compete clause or nondisclosure agreement. However, you do not need to write in any contractual obligations regarding the duration of the work (e.g. the employee is bound for one year). Employers may fire employees at any time, provided there is just cause.
Rules for Hiring Employees in New Jersey
The hiring process is strictly governed by state and federal anti-discrimination laws. In general, you cannot discriminate against prospective employees due to any of the following:
Affectional (Romantic) Orientation
Civil Union Status
Domestic Partnership Status
Liability (Armed Forces)
Rules for Firing Employees in New Jersey
The anti-discrimination laws governing firing are somewhat less comprehensive than those related to hiring, but it is still extremely important that you do not engage in any discriminatory firing practices. If you do, you may find yourself at the center of a costly wrongful termination lawsuit later on.
Generally speaking, you cannot fire employees due to either of the following:
To give an age-based example, imagine that you manage a team of five salespeople who range in age from 25 to 50, all of whom earn the same salary. The 50-year-old is your top salesperson, but your business caters to a younger demographic, and you feel a younger employee would better appeal to your customers. As a result, you decide to fire the 50-year-old and replace him or her with someone younger. You cannot do this, because you would be discriminating based on age.
If you wish to fire an employee, you must have just cause, meaning the employee actually did something wrong. (To use our above examples, simply being 50 years old or earning $100,000 per year is not a failure or shortcoming.) You can fire a worker if they fail to live up to their responsibilities and expectations, such as speaking inappropriately to a client.
This brings up another good point. It is extremely important for you to keep accurate records of your employee’s mistakes and errors, so that if you do need to fire someone, you can point to the valid reasons which went into that decision. Making this small effort now can help protect you from allegations of wrongful termination later.
A New Jersey business attorney can help keep you and your company compliant with the law. To set up a legal consultation, call The Jayson Law Group LLC at (908) 258-0621 today.