Five Laws All Small Businesses Should Pay Attention To

Originally published by Robert Kraft.

Most small business owners work hard to be nice employers. They engage their employees well and increase the productivity of their businesses because of these efforts. Unfortunately, many small business owners usually violate employment laws unintentionally as they try to be both flexible and nice at the same time. Here are five laws they should pay great attention to for avoiding litigation.

Exemptions

Under both state and federal laws, exempt employees are individuals who are paid a specific amount of money, irrespective of the number of hours they work per week. These positions may be exempt from meal and rest breaks and overtime requirements. Certain positions can be exempt from overtime only. Problems arise when an employer ignores nonexempt employees and then pays everyone salaries without dealing with meal and rest breaks, time sheets, and overtime. When these disgruntled workers sue their employers, they can be required to pay hefty fines in addition to the unpaid amounts.

Independent Contractor vs. Employee

Classifying your employees as independent contractors is an action ripe for litigation and can also land an employer in serious trouble with the tax man. Most workers may be happy to be classified as independent contractors until benefits such as workers’ compensation, disability, and paid leave become issues. If these workers sue their employer, the court can order them to pay their former employees all these benefits and penalties.

Harassment and Discrimination

If your state mandates harassment and discrimination training, always ensure you train your first-line supervisors on what they are required to do in certain situations. This simple act can save an employer from lawsuits. If you are wondering whether your state requires you to offer this training or have any concerns, check with the Equal Employment Opportunity Commission.

Flexibility with Schedules

An employer might think they are being nice by allowing their employees to come up with their own work schedules, but permitting this can land you into serious legal problems. Some states have laws that provide the number of hours that an employee should be on the job each day. To avoid being held responsible for lost overtime pay, an employer should ensure they familiarize themselves with the specific requirements of their respective states. You can check out an online MBA program for a better understanding of what modern business owners need in terms of legal protection as well.

Deducting Repayment from Paychecks

Some employers give their workers loans and deduct repayments from their paychecks. This can also land you in trouble since the law only permits employers to deduct pay and benefits from employee paychecks. To be on the safe side as an employer, have your employee sign a promissory note with the help of a competent lawyer and schedule regular repayments.

Running a small business can be overwhelming at times until an employer forgets that they have legal obligations to keep. Since knowing clearly what the law says and complying with it is crucial to their businesses, small business owners should pay attention to all these business laws.

Author Information: Eileen O’Shanassy is a freelance writer and blogger based out of Flagstaff, AZ. She writes on a variety of topics and loves to research and write. She enjoys baking, biking, and kayaking. Check her out on Twitter at @eileenoshanassy.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

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