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Who's Counting?

How you count your employees could save you from a lawsuit.

Title VII of the Civil Rights Act of 1964, which forbids discrimination in hiring on the basis of race, sex, religion and nationality, applies only to businesses with 15 employees or more. The same goes for the Americans With Disabilities Act (ADA). Do these laws apply to your business?

That might depend on how you count employees. If you have, say, three employees or 30, the answer is clear. But what if the number hovers right around 15, depending on how you count job-sharing teams, part-timers and employees on leave?

The answer could be crucial if you're sued by a former employee, because the coverage threshold is often the first line of defense for a company facing a Title VII or ADA lawsuit. If you can persuade a judge the law doesn't apply to your business, you can have the lawsuit dismissed.

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This article was originally published in the May 1997 print edition of Entrepreneur with the headline: Who's Counting?.

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