Are you the kind of small business owner who typically lets your employees set their own schedules or skip lunch breaks to leave early? Do you let your workers decide whether to become employees or remain contractors? Do you lend money to employees and let them pay it back via payroll deductions?
If you do, you’ll probably be surprised to learn that your kindnesses may be breaking state and federal labor laws.
The California Chamber of Commerce recently published a list of the top 10 mistakes that small business owners make that cause them to be in violation of California labor laws. The most interesting part of the study is that many of these mistakes stem not from the business owner’s desire to exploit employees, but rather from the desire to be a nice, flexible, and good-hearted employer. If your small business is based in California, it is a must read.
Noting that California has some of the most strict (and some would say employee-friendly) labor laws in the country, the U.S. Small Business Administration (SBA), uses the California paper as a basis for their own post on business mistakes that cause employers to be in violation of federal labor laws. It covers classification of exempt and non-exempt workers and independent contractors, lunch breaks, flexible work hours, vacation time, terminations of employees on leave, non-compete agreements, sexual harassment training, final paychecks, and employee loans.
Each section describes federal law and provides links to SBA and other resources than can help you understand the law and properly implement it for your business. It also calls out where state laws apply, and where they vary from each other and from federal law. Links are provided to State resources in each section which can help.
Read the SBA’s 10 Ways Your Small Business May Be Breaking Employment Laws today. Then learn about the laws in your state from your State Labor Office (get a list with links to the offices for all 50 states here). Use them both to evaluate your own business practices.
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