Does Your Business Have to Comply With the Americans With Disabilities Act?

With all of the hassles, stresses, pressures and other woes that a small business owner must endure, probably least on his/her list is whether or not the business has complied with the Americans with Disabilities Act, commonly known as the ADA. Yet, to overlook or ignore this adolescent law could heavily impact you as would any other teenager in the wallet.

Enacted in 1990, the ADA applies to all employers who have 15 or more employees for each working day in each of 20 or more calendar weeks in a year. This number may be a relief for some who have very few employees (although they may still be subject to state and local anti-discrimination laws), and those just under may not escape, if the owners are counted as employees, thereby putting the number at 15 or more.

Recently, the United States Supreme Court determined the circumstances under which shareholders of a small professional corporation may be found to be employees, for the purposes of the application of the ADA. In Clackamas Gastroenterology Associates v. Wells, Deborah Ann Wells sued her employer, a small medical practice, claiming disability discrimination for the practice’s alleged failure to accommodate her disability and its termination of her employment. The practice asserted that it was not required to accommodate Wells because it simply did not have the requisite number of employees for 20 weeks of a year, but rather, had 15 employees for only ten weeks of the prior year, and eight weeks of the present year. However, in its tally of employees, the practice was not counting the four doctors who were also shareholders of the corporation. Should small business owners be counted as employees? That is the question the Supreme Court was eventually asked to address. The answer, unfortunately, is not as simple as the question, except to say “it depends.” It depends, essentially, on the amount of control the organization has over the owner. The existence of a title (e.g., partner, director, shareholder) or an employment agreement is not determinative. Rather, the facts must be examined to determine the degree of control the organization has over the individual. Questions that need to be answered and analyzed as to each company include—

  • Can the organization hire or fire the individual?

  • Can the company set the rules and regulations of the person’s work?

  • Does the company supervise the individual’s work?

  • Does the individual report to a superior in the organization?

  • To what extent does the person influence the organization?

  • Did the organization intend the individual to be an employee?

  • Does the person share in the profits, losses and liabilities of the company?

Simply stated, if the facts of a particular situation reveal that the shareholders-owners operate independently and manage the business, they are proprietors and not employees; if they are subject to the control of the corporation, they are employees. The court states that an employer “can hire and fire employees, can assign tasks to employees and supervise their performance, and can decide how the profits and losses of the business are to be distributed.” In the Clackamas case, the facts suggested that the four physician-shareholders controlled the operation of the clinic, shared the profits, and were personally liable for malpractice claims. However, since the facts seemed to be incomplete, the court sent the case back to the lower court for further development of the facts.

If your business employs 15 or close to 15 employees, examine your role to determine whether you may be counted as an employee. If your company does reach the minimum number of employees, you must be aware of the requirements of the ADA, in order to assist any disabled employees and to comply with the law. While you may not be able to avoid cash outlays with a teenager, you can protect yourself and your company from large payouts by complying (and knowing whether you must comply) with the ADA!