What should small business owners know about employment law?

What should small business owners know about employment law?

May 8, 2020 | Employment Law


Some small businesses start out with the owner and possibly their family members doing everything for the company. As the business begins to grow and generate profit, the owner will have to start hiring people to perform critical tasks like customer service, production and bookkeeping.

With those new staff members will come new responsibilities. As someone running a small business, there are certain things that you need to know about employment law and the rights of your workers.

It’s not enough to decide not to discriminate against your workers

You may know that you are racist or sexist, but your employees won’t know that. They might infer questionable motives to the decisions you make involving who gets promoted or who receives a raise. Your company should create a written employee handbook which includes a policy about non-discrimination.

Additionally, you should make sure that each new employee receives at least some education on workplace harassment and discrimination. Providing training on these critical issues is important, as is giving workers a way to report harassment or abuse so that you can address it. You should keep records of training along with other important records that will confirm your compliance with employment laws, such as verifications of your employee’s right to work and age.

Make sure you know all of your legal obligations as an employer

Obviously, a harassment or discrimination lawsuit could have negative consequences for your business. However, discrimination isn’t the only reason that an employee might sue you. People also bring wage-and-hour claims against their employers, as well as claims related to the violation of their rights, such as the right to take leave in certain circumstances. As your business grows, more employment laws will apply to your business.

However, when you have just one worker, you have an obligation to engage in fair pay practices, which include paying both genders equally, compensating employees with overtime if necessary and paying staff for all the time they work. The salary at which an employee becomes exempt for overtime pay has changed, highlighting how rules and laws can shift and change your obligations to your workers.

Depending on your industry, there may be other obligations or concerns that will affect you and your workers. The more carefully you structure your employment contract and employee training process, the better protected you will be against future claims by your workers.