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What state-specific laws govern the employment relationship?
New Hampshire Revised Statutes Annotated (RSA), Chapters 273-282-A and 354-A, are the major employment-related statutes.
The New Hampshire Department of Labor enforces Chapters 273-281-A and has regulations at N.H. Admin. Rules Lab.
The New Hampshire Department of Employment Security enforces RSA Chapter 282-A (unemployment insurance) and has regulations at N.H. Admin. Rules Emp.
The New Hampshire Commission for Human Rights enforces RSA Chapter 354-A (Law Against Discrimination) and has regulations at N.H. Admin. Rules Hum.
Who do these cover, including categories of workers?
The laws governing the employment relationship generally apply to all employees, unless otherwise provided therein. For example, RSA chapter 354-A applies to employers with six or more employees only.
Are there state-specific rules regarding employee/contractor misclassification?
Yes—there are two main statutory tests, both of which are stricter than the federal tests. The first is found in the unemployment insurance statute (RSA 282-A:9, III—the “ABC test”), which is enforced by the New Hampshire Department of Employment Security. The second is in several statutes governing wage protection, minimum wage, and workers’ compensation (RSA Ch. 275:42, II; Ch. 279:1, X; and Ch. 281-A:2, VI (b))—all of which are enforced by the New Hampshire Department of Labor.
The “ABC test” states that services performed by an individual for compensation will be deemed employment (for purposes of being subject to the unemployment statute) unless all three of the following factors are met:
- The individual is free from control or direction over the performance of such services;
- Such service is either outside the usual course of the hiring entity’s business or performed outside of all the places of the hiring entity’s business; and
- Such individual is customarily engaged in an independently established trade, occupation, profession, or business (RSA 282-A:9, III).
For purposes of determining whether an individual worker must be covered by the state’s workers’ compensation law, minimum wage statute, and wage protection law, the New Hampshire Department of Labor applies a seven-factor test (all factors must be met to classify as an independent contractor):
- The person has a federal employer identification number or social security number or, alternatively, has agreed in writing to carry out the responsibilities imposed on employers under state law.
- The person has control and discretion over the means and manner of performance of the work, in that the result of the work—rather than the means or manner by which the work is performed—is the primary element bargained for by the employer.
- The person has control over the time when the work is performed and the employer does not dictate the time of performance. However, this does not prohibit the employer from agreeing to a completion schedule, range of work hours, and maximum number of work hours to be provided by the person and, in the case of entertainment, the time such entertainment is to be presented.
- The person hires and pays assistants, if any, and to the extent such assistants are employees, supervises the details of the assistants' work.
- The person holds himself or herself out to be in business for himself or herself and has continuing or recurring business liabilities or obligations.
- The person is responsible for satisfactorily completing work and may be held contractually responsible for failure to complete the work.
- The person is not required to work exclusively for the employer.
Must an employment contract be in writing?
No. Like most states, New Hampshire recognizes the employment at-will doctrine. The general rule is that in the absence of an employment contract for a definite term, either the employer or employee may terminate employment at any time for any reason not prohibited by law, with or without notice. Terms and conditions of employment are generally found in offer letters, written policies, rules, benefit plans, and employee handbooks. However, courts will construe poorly drafted offer letters, policies, and other written policies as binding terms on the employer (Dillman v. New Hampshire College, 150 N.H. 431 (2003), Butler v. Walker Power, Inc., 137 N.H. 432 (1993) and Panto v. Moore Business Forms, 130 N.H. 730 (1988)).
State law does require that certain terms of employment be provided to employees in a written notice signed by the employee at the time of hire. These terms include the employee’s rate of pay, frequency of pay, day and place of payment, and fringe benefits (see in particular the New Hampshire Department of Labor regulations (N.H. Admin. Rules Lab 803.03) on the requirements of providing written notices www.gencourt.state.nh.us/rules/state_agencies/lab800.html).
Are any terms implied into employment contracts?
There is an implied covenant of good faith and fair dealing, but this has rarely been litigated on as a separate cause of action.
Are mandatory arbitration agreements enforceable?
Yes. New Hampshire has a statute that allows mandatory arbitration agreements (RSA Ch. 542) between employers and employees, provided that the agreement specifically states that it is subject to RSA Ch. 542. It is unclear whether this is necessary to ensure the arbitration agreement is enforceable, since there is no case law on the point; but it is prudent to include a reference to the statute in the agreement.
How can employers make changes to existing employment agreements?
If employment is at will, an employer has discretion to change the terms and conditions of employment within its discretion. However, changes to certain features—such as an employee’s rate of pay, incentive pay plans, and fringe benefits (eg, vacation accruals, holiday pay, and sick leave)—will be effective only prospectively. Changes to these features must be set forth in advance in a written notice signed by the employee. If employment is subject to a written employment agreement, the provisions of the agreement will govern how changes can be made to any terms of employment set forth in the agreement.
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