“You must begin a enterprise – it will likely be enjoyable!”
Fixing issues together with your services or products or showcasing your distinctive expertise is the enjoyable facet of being a small enterprise proprietor.
However operating a small enterprise includes extra than simply delivering an incredible buyer expertise. There are employment legal guidelines and authorities rules masking the whole lot from office security to worker rights that each small enterprise proprietor should know and observe.
Being out of compliance could possibly be expensive. Not solely can the federal government high quality you, however you can expose your small enterprise to expensive lawsuits. The very last thing any small enterprise proprietor needs is to see their enterprise shut as a result of they weren’t in compliance with an employment regulation.
Conserving your small enterprise in compliance
Whereas employment legal guidelines and authorities rules might really feel like a nuisance – who actually needs one other rule to observe? – these legal guidelines and rules exist for a purpose. At one level on this nation, it was okay to have younger kids working in factories, require folks to work six days every week with no day without work, and discriminate in opposition to somebody due to their race or gender.
Employment legal guidelines have been enacted to vary these harmful and dangerous practices and shield the well being and security of American staff. Additionally they shield your finest pursuits. So long as you observe the legal guidelines and rules, you’ll be able to run what you are promoting the way you select.
5 classes of employment regulation and rules
Whereas the U.S. Division of Labor administers and enforces greater than 180 completely different federal legal guidelines that cowl points associated to employment, the most typical ones fall into 5 classes:
- Hiring practices and anti-discrimination legal guidelines
- Worker classification and wage legal guidelines
- Office security and well being rules
- Worker rights and protections
- Compliance and danger administration
1. Hiring practices and anti-discrimination legal guidelines
As a small enterprise proprietor, you need to encompass your self with people who find themselves passionate and see your imaginative and prescient. However when recruiting expertise, it’s essential to know the employment legal guidelines that cowl hiring so that you don’t say or do one thing within the interview course of that would get you into bother.
Most of the employment legal guidelines that cowl hiring practices additionally embody anti-discrimination parts, which cowl all office interactions.
Equal Employment Alternative legal guidelines
Equal Employment Alternative (EEO) legal guidelines make it unlawful to discriminate in opposition to a job applicant or an worker due to their:
- Race
- Faith
- Intercourse (which incorporates gender identification and sexual orientation)
- Nationwide origin
- Age
- Incapacity
- Genetics
EEO legal guidelines additionally shield sure veterans and ladies who’re pregnant.
These legal guidelines apply to hiring, terminating, selling, and coaching your crew members. Additionally they cowl harassment, wages, and advantages. As a result of these legal guidelines may be obscure, Homebase affords just a few recommendations on the ins and outs of selling workers and defending pregnant worker’s rights.
In a nutshell, it’s unlawful to rent, fireplace, or promote anybody based mostly on the classes listed above. Additionally it is unlawful to set wages and supply advantages to workers based mostly on these classes.
People with Disabilities Act
One other anti-discrimination regulation that’s essential to know is the People with Disabilities Act (ADA). Along with not discriminating in opposition to an individual with a incapacity, you could additionally make affordable lodging for people with disabilities to allow them to carry out their job duties.
What about background checks?
As you undergo the hiring course of, you could need to run a background verify on potential candidates. There isn’t any regulation that claims you’ll be able to’t do this, however there are legal guidelines that shield the applicant. You should first get permission to run a background verify, which candidates can refuse. In the event that they do refuse, you don’t have to rent them.
Homebase affords a guidelines to observe if you want to run a felony background verify in the course of the hiring course of.
2. Worker classification and wage legal guidelines
EEO legal guidelines make it unlawful to find out wages based mostly on the identical protected classes famous above. It’s additionally essential to know the Truthful Labor Requirements Act (FLSA), which covers worker classification.
H3: Non-exempt vs. exempt worker classification
Worker classification legal guidelines cowl the necessities associated to worker wages. There are two varieties of worker classification – exempt and non-exempt.
- Exempt workers are usually paid an annual wage for his or her companies. They’re exempt from federal minimal wage and extra time pay necessities, however should meet different necessities to qualify as exempt, which embody being paid a set wage of at the least $684 per week whatever the high quality or amount of their work.
- Non-exempt workers are usually paid an hourly charge. They’re required to be paid at the least the federal minimal wage or state minimal wage whether it is larger. Non-exempt workers are additionally entitled to extra time pay of 1 ½ occasions their hourly charge for any work over 40 hours per week.
For non-exempt workers, it’s essential to precisely monitor the time that they work every week. Homebase’s on-line timesheets might help you keep compliant with monitoring hours.
Contract staff and freelancers
As you might be rising your crew, you could think about hiring unbiased contractors or freelancers. These kind of staff are distributors identical to every other provide vendor you do enterprise with.
Due to that, you don’t should observe employment regulation as a result of they aren’t your workers – they’re suppliers. Nonetheless, you could nonetheless observe EEO legal guidelines when awarding their contracts. There are additionally tax legal guidelines to observe, particularly relating to issuing a 1099 for any cost made to a contract employee or freelancer over $600 in a calendar 12 months.
3. Office security and well being rules
Conserving your crew protected whereas they’re on the job is your duty as a small enterprise proprietor. Office security and well being legal guidelines and rules largely fall beneath the Occupational Security and Well being Administration (OSHA) requirements, which embody:
- Recording critical work-related accidents and diseases. As a small enterprise proprietor, you could file any harm or sickness that occurred when workers have been working. Accidents or diseases embody fatalities, lack of consciousness, damaged bones or tooth, and needle sticks for folks in medical professions. Information have to be stored for 10 years.
- Reporting extreme accidents. OSHA requires enterprise homeowners to report any employee fatality or hospitalization on account of a work-related harm inside eight hours of the incident.
- Figuring out hazardous supplies. Enterprise homeowners should conduct periodic inspections to establish and assess the danger of any potential hazardous materials.
- Worker coaching and security packages. OSHA requires enterprise homeowners to supply coaching to workers who face hazards on the job.
4. Worker rights and safety legal guidelines
Many worker rights legal guidelines are lined beneath the EEO legal guidelines. These embody the correct to not be harassed or discriminated in opposition to based mostly on the protected classes we famous above. Workers even have the correct to obtain equal pay for work, affordable lodging for medical situations or non secular beliefs, and have their medical info stored confidential. Different worker rights legal guidelines embody:
Household and Medical Go away Act
The Household and Medical Go away Act (FMLA) entitles workers to take as much as 12 weeks of unpaid depart for outlined causes, which embody the beginning or adoption of a kid, to get therapy for or get well from a critical sickness, and to take care of a sick relative.
There are particular guidelines that govern FMLA, and solely small enterprise homeowners that make use of 50 or extra workers are required to observe FMLA necessities.
Whistleblower safety legal guidelines
As a small enterprise proprietor, beneath the whistleblower safety legal guidelines, it’s unlawful to retaliate in opposition to an worker who submits a grievance to authorities businesses together with OSHA, the Wage and Hour Division, and the Workplace of Federal Contract Compliance Packages.
Non-compete and non-disclosure agreements
Non-compete clauses could be a vital aspect of your relationship together with your crew members, particularly subject material consultants. A non-compete clause is a contractual time period between a enterprise proprietor (employer) and an worker that blocks that worker from working for a competing employer or beginning a competing enterprise inside a sure geographical space and for a sure time frame after employment ends.
If you happen to select to have non-compete clauses together with your crew, we suggest hiring an employment legal professional.
5. Compliance and danger administration necessities
As a small enterprise proprietor, you need to inform your workers about your insurance policies, procedures, and expectations. Your workers must also know their rights and protections beneath state and federal regulation.
This info ought to be consolidated right into a written doc like an worker handbook. Whereas worker handbooks should not required by regulation, they’re a easy and efficient technique to talk vital info. They’re additionally nice instruments to share info that’s required beneath the legal guidelines we’ve outlined on this article, which helps you keep compliant.
To mitigate danger for any employment regulation violation, it’s a good suggestion to host common coaching together with your crew on the completely different employment legal guidelines. Your human assets crew ought to maintain present with all authorities legal guidelines and rules.
When unsure on something, search authorized counsel {and professional} steering. Not realizing or understanding the regulation is just not an excuse within the eyes of presidency regulators!
Homebase makes staying compliant simple
From help with drafting job descriptions to monitoring time and managing payroll, Homebase helps small enterprise homeowners with staying compliant with employment legal guidelines and rules. Make your work simpler. See how one can get began with Homebase.
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