The modern employer’s role involves strategic workforce management, regulatory compliance, and employee support, extending across the entire employment life cycle. Employers must navigate local, state, and federal laws while focusing on internal systems that drive productivity and growth. Understanding this multi-faceted role, from defining a job to executing a final separation, is fundamental for any organization operating today.
Planning for Workforce Needs and Hiring
The process of becoming an employer starts with a strategic assessment of business needs and defining the organizational structure. Managers must perform a job analysis to determine the specific duties, responsibilities, and necessary competencies for a position. Accurate job descriptions are necessary, as they form the foundation for compliant hiring practices, performance evaluation, and compensation setting.
Once roles are defined, the employer engages in sourcing and selection to attract qualified candidates. Sourcing includes internal promotions, external advertisements, or recruitment agencies, all while adhering to non-discriminatory practices. The selection process uses compliant interviewing and testing methods to assess qualifications without violating anti-discrimination statutes.
Establishing the Employment Framework
Immediately following a successful hire, the employer must establish the legal and administrative structure of the relationship. This involves correctly classifying the new worker as either a W-2 employee or a 1099 independent contractor, based on the degree of control the business exercises over the work. Misclassification carries penalties, as employees are entitled to benefits and tax withholdings that contractors are not. For every new hire, the employer must complete Form I-9, verifying the worker’s identity and employment authorization within the first few days of employment.
The relationship is further defined through the creation and distribution of an employee handbook, which communicates company policies on conduct, benefits, and internal complaint procedures. New employees must also complete tax withholding paperwork, such as Form W-4, to ensure the correct amount of federal income tax is deducted from their wages.
Managing Employee Compensation and Benefits
Accurate and timely administration of compensation is governed by the Fair Labor Standards Act (FLSA) and various state laws. Employers must ensure that all covered, non-exempt employees are paid at least the federal or applicable state minimum wage, whichever is higher. The employer is responsible for calculating and paying overtime at one and one-half times the regular rate of pay for all hours worked over 40 in a workweek. Strict record-keeping detailing hours worked and wages paid is mandated by the FLSA, with records typically retained for at least three years.
The employer acts as a collection agent by withholding and remitting federal income tax and FICA taxes, which fund Social Security and Medicare. Employers are also required to fund mandatory benefits, including contributing to unemployment insurance programs through payroll taxes (FUTA and SUI). They must secure workers’ compensation insurance, which provides wage replacement and medical benefits for employees injured on the job. Many employers also administer voluntary benefits, such as group health insurance and retirement plans.
Overseeing Daily Performance and Development
The managerial component of the employer’s role focuses on performance oversight. This involves establishing clear performance goals that align with organizational objectives and communicating expectations to employees. Managers must provide regular, constructive feedback throughout the year, rather than limiting discussions to a single annual review.
Performance reviews formally assess past contributions, identify areas for improvement, and set future development targets. Employers implement training and professional development programs to help employees acquire new skills and progress in their careers. When performance falls short, the employer is responsible for implementing disciplinary actions or corrective measures, which must be executed consistently and documented thoroughly.
Maintaining Regulatory Compliance and Workplace Safety
The employer has a continuous duty to maintain compliance with federal labor laws and ensure a safe working environment. This involves staying current on legislation and translating complex regulations into actionable workplace procedures. Compliance is an ongoing commitment to upholding established standards across all aspects of the business.
Workplace Health and Safety (OSHA)
Under the Occupational Safety and Health Act (OSH Act), employers must provide a workplace free from recognized hazards that could cause physical harm. This includes ensuring employees have access to safe, properly maintained tools and equipment. Employers must provide safety training in an understandable language and supply necessary personal protective equipment (PPE) at no cost. They must also maintain records of work-related injuries and report any fatality within eight hours, or any inpatient hospitalization, amputation, or loss of an eye within 24 hours.
Anti-Discrimination and Equal Opportunity (EEOC)
Employers are responsible for preventing discrimination and harassment based on protected characteristics like race, sex, religion, and national origin, as enforced by the Equal Employment Opportunity Commission (EEOC). This requires establishing comprehensive anti-harassment policies and multiple accessible avenues for reporting complaints. When a complaint is filed, the employer must respond with a prompt, impartial investigation, taking appropriate corrective action if misconduct is confirmed.
Employee Records and Reporting
Employers have a legal necessity to maintain accurate, confidential employment records for specified minimum periods. FLSA payroll records generally require retention for at least three years. General personnel records, such as performance evaluations and disciplinary actions, are often required to be kept for at least one year following the record’s creation or the employee’s separation. Certain employers must also fulfill governmental reporting requirements, such as the annual EEO-1 report, which provides a demographic breakdown of the workforce.
Procedures for Employee Separation
The employment relationship concludes with a structured separation process, whether the termination is voluntary or involuntary. The employer’s primary financial obligation is issuing the final paycheck, which must include all earned wages and, in many states, accrued but unused vacation time. The timing of this final payment is strictly regulated by state law, often requiring immediate payment upon involuntary termination or payment within a short, defined window for voluntary resignations.
Employers with 20 or more employees must administer the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA offers separating employees the option to continue group health coverage temporarily. The employer is required to notify the health plan administrator of the qualifying event, such as termination or reduced hours, within 30 days. Finally, the employer must manage unemployment claims by responding to state agencies with accurate job separation and earnings history information, as the former employee files for benefits.