NASHVILLE, Tenn. — Many workplace lawsuits don’t stem from deliberate misconduct. Instead, they often grow out of relatively minor situations — a rejected request for a schedule change, a policy that isn’t clearly defined, or a quick decision made without thorough thought. Over time, those small incidents can escalate into legal disputes that are expensive and time-intensive to resolve.
During a recent National Federation of Independent Business webinar, employment attorney Tony Dalimonte of Foster Swift Collins & Smith outlined key employment-law risks and compliance considerations that small-business owners should keep in mind heading into 2026.
Small companies face employment claims just as frequently as larger employers, he says, and the consequences can be substantial. His primary advice emphasized the value of prevention, consistent practices and careful documentation.
Decisions that appear routine in the workplace can come under intense scrutiny once attorneys or regulators begin reviewing a situation. By addressing concerns promptly and ensuring policies are clearly written and consistently applied, employers can help limit potential legal exposure.
Part 1 of this article addressed the employee handbook and why consistent application and employee acknowledgement matter. Let’s continue:
WAGE AND HOUR, EXEMPT VS. NON-EXEMPT
Wage and hour claims are among the most expensive employment disputes. Even when the actual back-pay amounts are small, these cases often include attorneys’ fees that can quickly increase the cost.
Dalimonte described situations where companies automatically deducted time for meal breaks, only to face claims that employees weren’t actually taking those breaks. The individual damages might not be large, but legal fees can grow significantly over time.
Minimum wage compliance is another important factor. The federal minimum wage sets a baseline, but many states and cities require higher pay rates. These rates change frequently, and employers must ensure they are paying the correct amount in every location where they operate.
A common misunderstanding involves employee classification. Paying someone a salary does not automatically make them exempt from overtime.
Under federal law, exemption depends on both salary level and job duties. While there is a salary threshold, the duties test is often where employers run into trouble.
For the executive exemption, employees must supervise at least two people. Administrative exemptions require office work related to important business matters and the use of independent judgment. If those requirements are not met, the employee may still be entitled to overtime.
When in doubt, Dalimonte suggests taking a conservative approach. If an employee works more than 40 hours in a week and does not clearly meet exemption standards, paying overtime may help reduce risk.
EEOC ENFORCEMENT FOCUS, EMPLOYER ACCOMMODATIONS
The Equal Employment Opportunity Commission (EEOC) has indicated that it intends to closely examine discrimination claims across protected categories. Updated guidance warns that limiting, segregating or classifying employees based on protected characteristics can violate federal law.
Even well-intentioned decisions can create problems if protected traits play any role in the outcome. Employers should focus decisions on performance, conduct, qualifications and documented business reasons.
Religious accommodation is a growing area of attention. Employers must reasonably accommodate sincerely held religious beliefs unless doing so creates undue hardship. A recent Supreme Court decision raised the standard for what qualifies as hardship.
Minor inconvenience or co-worker frustration is unlikely to be enough to deny a request. Employers must be able to show real financial or operational disruption.
Dalimonte advises taking each request seriously and exploring options such as shift swaps, adjusted duties or temporary coverage arrangements. Careful documentation of the analysis is important when making a final decision.
The Americans with Disabilities Act requires employers to engage in an “interactive process” when an employee may need an accommodation. This means having a good-faith conversation to determine whether adjustments can help the employee perform essential job functions.
Employees do not need to use formal language to trigger this obligation. Any indication that a medical condition is affecting work can require an employer to respond.
Problems often occur when a manager assumes no accommodation is possible and takes action without discussion. The law expects employers to gather information, request medical documentation when appropriate and consider possible solutions.
Dalimonte outlines five steps: recognize the request, gather information, engage in discussion, evaluate accommodation options and document the final decision. Possible adjustments might include modified schedules, additional breaks or temporary changes in duties.
The Pregnant Workers Fairness Act has strengthened protections for pregnant employees. In many cases, pregnancy-related accommodations should be granted, and some do not require medical documentation. Requests for schedule changes, additional breaks or modified duties should be recognized early and addressed appropriately.
The EEOC has also identified national origin discrimination as an enforcement priority. This includes job advertisements that suggest preferences based on nationality or visa status, as well as workplace practices that treat U.S. citizens differently from non-citizens.
Employers should ensure that all employment decisions are based on job-related factors rather than protected characteristics.
In Tuesday’s conclusion: Taking a prevention-oriented approach
Miss Part 1? You can read it HERE
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].
