Is Your Small Business Breaking Employment Laws?


Running a small business is incredibly hard work, and there are often not enough hours in a day to get from ‘A’ to ‘Z’ on a business owner’s to-do list. There’s no doubt that many SMB decision makers have only the best of intentions when it comes to running their companies, but there are certain elements that simply shouldn’t be left to misguided management.

Employment law is often one of the aspects of doing business that’s not only unavoidable, it can also be severely detrimental if it’s handled by misguided management. Even the most innocent of missteps can be problematic for organizations’ leaders. Although some of the small business confusion lies in the fact that some employment laws vary by state, others laws are bound by federal guidance, meaning every employer in the country is bound by the same obligations, expectations, and requirements.

Here are a few self-evaluation questions to help you better understand how a misstep in the application of employment law could ultimately do damage to your business:


You Give Your Employees Free Reign when It Comes to Free Time

Being a friendly and flexible boss is great, and this type of mentality can lend itself to high levels of employee engagement and loyalty. That said, you have to be careful about the ways in which you divvy out your flexibility. If your hourly employees work too long without a break, you could be subject to overtime expenses.

In the state of Minnesota , you’re required to provide adequate meal time to any hourly employee who works eight or more consecutive hours, and any break that’s less than 20 hours must be counted as time worked.

In other words, if you’re allowing your hourly employees to work through lunch to catch up on their backlogged work or take off early, you may be subjecting yourself to stiff penalties if the situation isn’t handled appropriately.

Your Team is Comprised of Independent Contractors

It’s tempting to classify employees as independent contractors when you run a small business. The tax implications, workers’ comp payments, and benefit expectations can be overwhelming, and the independent contractor classification often feels like the way out of all the mayhem.

Before you alter your employees’ statuses, be sure to consult with an attorney. Unless your staffers are truly independent contractors, you could face significant fines.

You’re Withholding Former Employees’ Paychecks

Theft happens, intentional or otherwise. It may seem like a grand idea to hold onto your employees’ paychecks until you get back everything you’ve given to them, but this action may have unfortunate implications.

If you run a small company, and you employ a team of people who work for you, hiring a business law attorney may be one of the best things you do for your business. Be sure to look for an attorney who knows your state’s requirements as they pertain to employment and labor laws. The sooner you seek legal counsel, the sooner you’ll have protections in place for both your business and the employees who work for you.

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