5 Important Laws You Can’t Afford to Break When Employing People
Most entrepreneurs take the easy approach when setting up and running their business. They minimize costs wherever they can to maximize the profit they generate.
You are probably one of those entrepreneurs, and although this is the right approach to reduce the complexity of your business model, there are employment laws that you may easily overlook while making decisions that impact your employees.
Not to worry though, as this article highlights the most probable violations you may make as an entrepreneur with employment laws.
Independent Contractors vs. Employees
There are many benefits to labeling employees of the company as independent contractors, mostly related to cost reductions. You are not liable to pay overtime wages or benefits of any sort to independent contractors but you must give these to employees under the law.
The government takes such misclassification of employees very seriously, and, if caught, may hold your business liable to pay due to wages, taxes on all not-paid wages, and may impose severe penalties on your business.
How to classify employees and contractors can be tricky business for any company. To ensure you do not misclassify your workers, the Department of Labour (DOL) has designed a test that you can use to figure out the classification of all workers at your company. It is imperative that you classify workers correctly, as the government takes these things very seriously.
There is a category of salaried employees who are exempt from receiving overtime pay, and hence, knowing who is exempt and who is not, can save you a lot of money.
Of course, an entrepreneur can make the mistake of exempting those salaried employees from receiving overtime who, in all legality, are not exempt and must be paid overtime wages. However, this mistake can cost you a lot of money if your employees, whom you mistakenly misclassify as exempt, sue you for the unpaid wages.
The government lists down the requirements which salaried employees must fulfill to be classified as exempt from overtime wages. Those who don’t are classified as non-exempt, and must be treated as such.
Loan Payments CANNOT be subtracted from pay
As a small business owner, your employees may ask you for loans due to the personal relationship which they develop with you. Of course, logically you may arrange the loan repayment in a manner that it gets deducted in installments from the paycheques of the employee.
However, this is not allowed under the law. The law allows employers to only deduct taxes and benefits from the paycheques of the employees, and nothing more. Hence, any such loan servicing would have to be done by other means such as having the employee sign a promissory note.
Employees CANNOT be fired for taking a leave
The Family Medical Leave Act (FMLA) outlines certain reasons for which employees can take time off from work. If you decide to fire employees who are on leave due to medical reasons, you will be breaking the law. This includes employees taking leave to vote or serve as a member on a jury.
Of course, you can fire employees if they are incompetent or constantly come late to work or take undue advantage of the vacation policy in place.
You must pay employees for rest breaks
Federal law requires that you pay employees for the time they rest at work, provided it does not exceed more than 20 minutes. The employees may not be compensated for the meal breaks, which last for more than 45 minutes to usually an hour long.
These meal breaks are not a part of the employees overall working schedule. However, for the short breaks, they must be compensated.
Entrepreneurs must be careful when dealing with employees
The government protects the employees, and hence mishandling employees can lead to expensive lawsuits and fines which will cost the company much more than paying what is due to the company.
Make sure you classify your employees correctly, pay them for overtime if they are not exempt, deduct only taxes and benefits from their pay and not anything more, and not fire them for taking a leave justified and allowed under law.
More in Legal Advice
Pursuing a Career in Environmental Law? Read This Article First
Choosing a career is never an easy task, and most people keep switching jobs before settling for one that is the...May 8, 2020
It’s Official! Average Stay-at-Home Mums Work More Than You
Most people downplay the importance of motherhood and the complexities that come with it. The truth of the matter, however, is...May 8, 2020
A Couple Sued Airbnb Homeowner After They Found Something Horrific at the Apartment
Many backpackers would opt to stay at a rental home rather than a typical hotel for a number of reasons. Firstly, the former is...May 7, 2020
Guidelines for Suing for Personal Injury and Suffering
What are Pain and Suffering Damages? Pain and suffering damages are a kind of legal remedy issued in relation to various...May 7, 2020
J.K. Rowling Sued Former Assistant for $24,000, and the Reason is Totally Shocking
If you’re an avid fan of the Harry Potter franchise, you need no introduction to J.K. Rowling who gave us the magical world of...May 7, 2020
From Starbucks Coffee to Celebrity Look-Alikes: These Ridiculous Lawsuits Will Make Your Cringe!
We all imagine lawsuits to be serious — the stern and stoic attorneys along with their pokerfaced clients facing a daunting...May 6, 2020
Legal Documents Reveal REAL Value of Late Linkin Park Frontman Chester Bennington’s Music Amidst Battle Over His Estate
It’s been more than two years since Linkin Park‘s Chester Bennington tragically passed away but it seems like the battle for...May 6, 2020
Fitness App Makes Woman Lose Thousands of Dollars in Personal Injury Money!
Sharing information online is the ‘it’ thing for most people today. In fact, social media and its apps have given people...May 5, 2020
TikTok in Hot Waters Again: Here’s Why the Video-Sharing App Is Facing Another Lawsuit
TikTok is one of the many content-creating apps that are widely popular nowadays. Just like the now-defunct Vine, the social media...May 5, 2020