Use this skill when drafting offer letters, handling terminations, classifying workers, or creating workplace policies. Triggers on offer letters, termination process, contractor vs employee, workplace policies, employment agreements, severance, non-compete, and any task requiring employment law guidance or HR legal compliance.
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name
employment-law
title
Key principles
description
Use this skill when drafting offer letters, handling terminations, classifying workers, or creating workplace policies. Triggers on offer letters, termination process, contractor vs employee, workplace policies, employment agreements, severance, non-compete, and any task requiring employment law guidance or HR legal compliance.
Document everything - Employment decisions that lack documentation become
indefensible in litigation. Every performance issue, accommodation request, policy
acknowledgment, and disciplinary action must be written, dated, and retained.
If it is not in writing, it did not happen.
Classify workers correctly from the start - Misclassifying an employee as an
independent contractor is one of the most common and costly employment law errors.
Back taxes, penalties, benefits liability, and class action exposure can result.
Apply the applicable classification test before engaging any worker.
At-will does not mean no process - Most US employment is at-will, meaning
either party can end the relationship at any time for any legal reason. But
terminating without process creates discrimination and retaliation exposure.
A consistent, documented process protects the company and treats employees fairly.
Consistency prevents discrimination claims - Applying policies selectively -
enforcing attendance rules for some employees but not others, offering severance
to some but not others - creates disparate treatment claims. Whatever you do for
one, document your rationale when you do differently for another.
Consult counsel before terminating - Termination is the highest-risk moment
in the employment lifecycle. Wrongful termination claims, discrimination claims,
retaliation claims, and WARN Act violations all originate here. A 30-minute
attorney consultation before a complex termination is cheap insurance.
Core concepts
At-will employment
In most US states, employment is "at-will" - either party may end the relationship
at any time, for any reason that is not illegal. Exceptions include:
Discrimination - Cannot terminate based on a protected class (race, sex, age,
disability, religion, national origin, etc.)
Retaliation - Cannot terminate for protected activity (whistleblowing, filing
an EEOC complaint, taking FMLA leave, reporting wage violations)
Implied contracts - Employee handbooks or offer letters that imply job security
can erode at-will status
Public policy exceptions - Vary by state (e.g., terminating for jury duty)
Outside the US, most jurisdictions have statutory notice periods, severance
requirements, and "just cause" standards. At-will is a US-specific concept.
Worker classification tests
Three primary tests are used in the US depending on context:
IRS Common Law Test (for federal tax purposes)
Behavioral control: Does the company control how work is done?
Financial control: Is the worker economically dependent on one company?
Type of relationship: Is there a written contract? Benefits? Permanent relationship?
ABC Test (California AB5 and many other states)
A worker is presumed an employee UNLESS the hiring entity proves all three:
A: The worker is free from control in connection with the work
B: The work is outside the usual course of the company's business
C: The worker is customarily engaged in an independently established trade
Economic Reality Test (federal FLSA)
Focuses on economic dependence: does the worker depend economically on this company
(employee) or is the worker in business for themselves (contractor)?
Protected classes
Federal law prohibits employment discrimination based on:
Race, color, national origin (Title VII)
Sex, pregnancy, sexual orientation, gender identity (Title VII + Bostock)
Age (40+) (ADEA)
Disability (ADA)
Religion (Title VII)
Genetic information (GINA)
State and local laws frequently add: marital status, political affiliation, criminal
history (ban-the-box laws), salary history, and more. Always check local law.
Wage and hour basics
Minimum wage: Federal minimum is $7.25/hr but most states and many cities are
higher. The highest applicable rate governs.
Overtime: Non-exempt employees must receive 1.5x their regular rate for hours
over 40 in a workweek (FLSA). Some states require daily overtime.
Exempt vs. non-exempt: The FLSA salary threshold (currently $684/week) and
the duties tests determine exemption. Job title does NOT determine exempt status.
Pay frequency and final pay: States dictate how often employees must be paid
and when final paychecks must be issued (often immediately on termination in
states like California).
Common tasks
Draft an offer letter
An offer letter sets expectations and establishes key terms. Use this template as
a starting point - always have counsel review for jurisdiction-specific requirements:
[Date]
[Candidate Name]
[Address]
Dear [Name],
[Company Name] is pleased to offer you the position of [Job Title] in the
[Department] department, reporting to [Manager Title].
START DATE: [Date], subject to successful completion of onboarding requirements.
COMPENSATION: Your starting annual salary will be $[Amount], paid [bi-weekly/
semi-monthly], equivalent to $[hourly rate] per hour. This position is classified
as [exempt/non-exempt] under the Fair Labor Standards Act.
BENEFITS: You will be eligible for the Company's standard benefits package,
including [health/dental/vision/401k], subject to plan terms and eligibility
periods. Details will be provided separately.
EQUITY: [Include if applicable: You will be granted an option to purchase
[X] shares of Company common stock at the fair market value on the grant date,
subject to the terms of the Company's equity plan and a 4-year vesting schedule
with a 1-year cliff.]
AT-WILL EMPLOYMENT: Your employment with [Company] is at-will, meaning either
you or the Company may terminate the employment relationship at any time, with
or without cause or advance notice.
CONDITIONS OF EMPLOYMENT: This offer is contingent upon:
- Satisfactory completion of a background check (if applicable)
- Proof of authorization to work in the United States (I-9 verification)
- Execution of the Company's standard Confidentiality and IP Assignment Agreement
This offer expires on [Date]. Please sign below to indicate your acceptance.
Sincerely,
[Name], [Title]
[Company Name]
______________________________
Accepted: [Candidate Name] Date: ___________
Key omissions to avoid:
Do not promise specific duration of employment
Do not use language like "permanent position" or "job security"
Do not list benefits in binding detail - reference the plan documents instead
Do not state the position is anything other than at-will (unless intentional)
Handle termination
Follow a structured process. See references/termination-checklist.md for the
complete step-by-step checklist. Summary:
Pre-termination review - Document the reason, verify it is not pretextual,
check for protected class membership and any recent protected activity. Consult
HR and consider legal review for complex cases.
Calculate final pay obligations - Determine what is owed: final wages,
accrued PTO (if applicable in your state), expense reimbursements.
Guidelines, confidentiality reminders, personal vs. professional use
Confidentiality and IP
What is confidential, IP assignment, post-employment obligations
Handbook pitfalls:
Avoid mandatory arbitration clauses without legal review (enforceability varies)
Do not include policies you will not enforce consistently
Update annually or when laws change - outdated handbooks create liability
Always get a signed acknowledgment of receipt from every employee
Draft non-compete and non-solicitation agreements
Non-compete enforceability varies dramatically by state:
Not enforceable: California, North Dakota, Minnesota, Oklahoma, and FTC rules
(if/when they take effect) prohibit most non-competes entirely
Narrowly enforceable: Most states require reasonable duration (6-12 months),
limited geographic scope, and protection of a legitimate business interest
More broadly enforceable: Florida and some other states are more permissive
Elements of an enforceable non-compete (where permitted):
RESTRICTED PERIOD: [6-12 months is generally more defensible than 2+ years]
GEOGRAPHIC SCOPE: [Specific states/metros where company actually operates]
RESTRICTED ACTIVITIES: [Specific role/industry, not broad "employment anywhere"]
CONSIDERATION: [Must be supported by adequate consideration - offer of employment
for new hires, or additional compensation/equity for existing employees]
Non-solicitation of customers and employees is more broadly enforceable than
non-competes. Focus on protecting actual customer relationships the employee had,
not all customers.
Always have counsel draft or review these agreements. Overbroad agreements may be
voided entirely or blue-penciled (rewritten by courts) in ways that eliminate
your intended protection.
Manage leaves of absence (FMLA / ADA)
FMLA (Family and Medical Leave Act) - federal:
Applies to employers with 50+ employees
Eligible employees (12 months employed, 1,250 hours worked) get 12 weeks
unpaid, job-protected leave per year
Qualifying reasons: serious health condition (employee or immediate family),
childbirth/adoption, qualifying military exigency
Obligation: provide notice, designation letter, and maintain health benefits
Key trap: Never terminate during FMLA leave without careful legal review -
retaliation claims are common and costly
ADA (Americans with Disabilities Act) - federal:
Applies to employers with 15+ employees
Obligation: engage in an "interactive process" with any employee who requests
an accommodation for a physical or mental impairment
Key trap: Denying leave or accommodation without documented undue hardship
analysis creates ADA exposure
Practical process:
Employee notifies you of a health condition or need for leave
Provide FMLA paperwork within 5 business days (if FMLA-eligible)
Require healthcare provider certification
Designate leave as FMLA in writing
If FMLA is exhausted or does not apply, evaluate ADA accommodation
Document every step of the interactive process
Handle workplace investigations
When to investigate: Any complaint of harassment, discrimination, or retaliation;
suspected policy violations; reports of hostile work environment; allegations of
misconduct that could expose the company to liability.
Investigation steps:
Act promptly - Delay signals indifference and can itself create liability
Assign the investigator - HR, in-house counsel, or outside investigator
(use outside counsel for senior executive complaints or complex matters)
Preserve evidence - Litigation hold on emails, messages, and documents
related to the complaint before interviews begin
Interview in order: Complainant first, then witnesses, then respondent last
Document every interview - Date, time, attendees, summary of statements
Make findings - Substantiated, not substantiated, or inconclusive
Take action - Proportionate to findings; document the decision rationale
Close the loop - Notify the complainant that the investigation is complete
(you need not share the outcome in detail)
Investigation rules:
Maintain confidentiality to the extent possible (not absolute confidentiality)
Do not promise absolute confidentiality - you may need to act on what you learn
Never retaliate against a complainant - even if the complaint is not substantiated
Anti-patterns / common mistakes
Mistake
Why it is wrong
What to do instead
Verbal-only performance warnings
Creates "he said/she said" disputes; no evidence trail if termination is challenged
Use written PIPs and written warnings with employee signature or delivery confirmation
Classifying workers as contractors to avoid benefits
Triggers IRS reclassification, back taxes, penalties, and potential class actions
Apply the ABC or common law test; reclassify proactively if risk is high
Terminating the day after FMLA/complaint
Creates a perfect retaliation timeline that juries find compelling
Document independent reasons; consult counsel; allow time to pass and performance evidence to build
One-size-fits-all handbook
Federal law governs minimum standards, but state and city laws vary widely and override weaker federal rules
Have counsel review the handbook for every state where you have employees
Overbroad non-competes
Courts in employee-friendly states void them entirely, eliminating any protection
Narrow scope to legitimate interests; consult counsel on enforceability by jurisdiction
No interactive process documentation
ADA requires good-faith engagement; no documentation = no defense
Document every step: employee request, company response, options considered, outcome
Gotchas
Terminating an employee the week after they filed a complaint creates a near-perfect retaliation timeline - Even if the termination is for a legitimate, unrelated reason, the timing is extremely difficult to defend in litigation. Document independent reasons thoroughly before acting and, where possible, allow time and additional performance evidence to build. Always consult counsel before terminating anyone who has recently engaged in protected activity.
Employee handbooks that promise progressive discipline eliminate at-will status - Language like "employees will receive a verbal warning, then a written warning, then termination" creates an implied contract. If the company then terminates without following the stated steps, it has violated its own policy. Use permissive language: "may include" rather than "will include."
The ABC test (California AB5 and similar state laws) presumes all workers are employees - Unlike the IRS common law test, the burden is on the company to prove contractor status under all three prongs. A worker who primarily does work core to your business (prong B) almost certainly cannot be classified as a contractor in California, regardless of what their contract says.
FMLA leave runs concurrently with other leave - but only if you designate it in writing - If an employee takes disability leave and you don't formally designate it as FMLA within 5 business days, you may have waived your ability to count it. The employee could then take an additional 12 weeks of FMLA after returning. Always send a written FMLA designation notice immediately.
Non-competes that are overbroad get voided entirely in many states, not narrowed - Some states (California, for example) refuse to enforce any non-compete regardless of scope. Others may "blue-pencil" (rewrite) an overbroad agreement, but the rewrite may eliminate your actual protection. Draft narrowly from the start rather than starting broad and hoping a court will trim it.
References
For detailed guidance on specific tasks, load the relevant file from references/:
references/termination-checklist.md - Step-by-step pre-termination review,
meeting conduct, final pay, and documentation checklist
Only load a references file when the current task requires it.
Companion check
On first activation of this skill in a conversation: check which companion skills are installed by running ls ~/.claude/skills/ ~/.agent/skills/ ~/.agents/skills/ .claude/skills/ .agent/skills/ .agents/skills/ 2>/dev/null. Compare the results against the recommended_skills field in this file's frontmatter. For any that are missing, mention them once and offer to install:
