Later today, I’ll be speaking to the next group of startups chosen to participate in the Accelerator for Biosciences in Connecticut, or ABCT. 

ABCT is a Branford-based program spearheaded by Design Technologies LLC, which supports Connecticut’s aim of being a bioscience hub.

It’s an exciting time for new businesses in Connecticut like those chosen to participate in the program.

But employment law issues are often an after-thought for startups.  They shouldn’t be.

I’ll be talking in more detail to the startups in my presentation but here are three things I’ll be talking about for startups and new business ventures:

  1. Startups should document the relationships with new employees.  Offer letters or, in some instances, contracts should be set up so that new employees know the terms and conditions of their employment.  Even more important, the documentation should detail all forms of compensation — whether salary, bonus, equity etc.  And at-will disclaimers are crucial.
  2. Startups also need to consider protecting the intellectual property of the company from the outset.  After all, if a new employee can just take the knowledge and set up shop across the street, how valuable is the company? Thus, having Non-Disclosure Agreements or other restrictive covenants in place when employees or consultants start is critical to making sure a company’s intellectual property is protected.
  3. Lastly, just because the business is a startup, doesn’t mean there’s an exception to paying employees their wages.  Those businesses must comply with all the rules regarding weekly payment of wages.  Failure to do so can result in significant legal exposure and, worse for some, an investigation from the federal or state department of labor.  Startups should make sure they have the cash flow necessary to make payroll.  If you can’t afford to pay your employees, don’t hire them.

Obviously, there are other questions startups should ask themselves too: Are you going to use a PEO? (or perhaps, What is a PEO?) Are you going to use independent contractors? If so, how is that relationship documented and is it proper? Are employees classified as exempt vs. non-exempt? Are the employees even authorized to work in the United States?

If all these questions give startups some concerns — they should.  Employment law issues are an important part of building a company’s foundation.  Ignore them, and the business that you build might be the proverbial house of cards.

Over ten years ago, Connecticut became one of the first states to mandate that employers “make reasonable efforts to provide a room or other location, in close proximity to the work area, other than a toilet stall, where the employee can express her milk in private.”

I’ve discussed that law in depth in a prior post here.

So, how’s the law holding up? Well, if a recent news report is to be believed, the answer is “pretty well”.

“Turns out, many companies provide clean, comfortable lactation rooms,” said the report.

Still, there appears to be room for improvement and sometimes the conditions vary wildly.

Thus, the March of Dimes has just started a “Healthy Babies Healthy Business initiative, raising the awareness of business benefits of a family-friendly work environment.

Companies can sign-up on for access to a free Intranet service that complements human resources departments. It provides standards for workplaces to support maternal and infant health, as well as education about nutrition and stress relief. Employees can access this system, currently used by Cigna, Ebay and Walmart, from work or home.

It’s a notable initiative and, having helped out the March of Dimes in the past, it’s nice to see that organization continuing its mission while providing support to businesses in the state.

Even if employers do not adapt that program, make sure you remain vigilant in ensuring access to private rooms for new mothers.

It’s not only good business. It’s the law too.