When starting or running a small business, you have to fulfill your legal obligation, including adhering to labor laws. The laws govern the relationship between employers and employees, and non-compliance may lead to legal problems. Lawsuits can ruin your company image and cost you heavily in terms of fines and revenue. To avoid running into legal issues and jeopardizing your business, here are four labor laws in a small business setting to help you stay compliant.
The Fair Labor Standards Act regulates the minimum wage, overtime pay, child labor standards, employee classification, and record-keeping. Any business with one or more employees should adhere to the FLSA by paying their employees reasonable income for hours worked.
While employers have the right to determine employee working hours, the law requires employers to pay for overtime at a rate of” time and one half” of regular pay rates to those who work for more than 40 hours a week. Note that school-going employees below the age of 17 may not work for more than 9 hours on any given day.
In cases where your customers leave tips for your employees, the FLSA prohibits employers and managers from sharing them. Depending on your state, you may pay your workers the minimum wage and let the tips account for the difference.
However, you should first make sure that your employees’ total hourly pay meets or exceed the state’s minimum wage. Lastly, the FLSA regulates how long you can keep your employee’s record. For example, you should maintain your employee’s time card for two years, whether or not the employee still works for you.
As an employer, you must provide a safe workplace for your workers. The Occupational Safety and Health Act (OSHA) ensures that workers have access to safe working environments and applies to businesses with one or more employees.
However, OSHA regulations do not apply to freelancers or contractors. In case of an inspection by the OSHA officials, your business may suffer fines if it doesn’t meet OSHA standards. Also, you may not retaliate against an employee that files a complaint due to an unsafe or unhealthy working environment.
Some of the OSHA regulations businesses should adhere to include hanging an OSHA poster on the business premises, making hazardous materials around the workplace identifiable, and training employees to handle exposure to harmful substances. The law also requires employers to report any accidents that lead to hospitalization or death of employees and maintain records of their compliance efforts.
Various laws protect employees in small business settings from discrimination at the workplace. Usually, these laws fall under the Equal Employment Opportunity Commission that oversees the implementation of the laws.
Some of the regulations that small businesses should watch out for include the Title VII of the Civil Rights Act 1964 and the Equal Pay Act. The Civil Rights Act protects employees from discrimination based on protected characteristics, including race, religion, color, and national origin.
Other laws, including the Americans with Disabilities Act and Age Discrimination Act, protect employees from discrimination due to disability and age, respectively. The Equal Pay Act of 1963, on the other hand, requires employers to offer equal pay to women as their male counterparts for doing the same job.
The law ensures that women do not get less pay for the same job as men. Note that the equal employment opportunity laws cover every aspect of employment, ranging from hiring and promotion to termination of the contract.
According to the FMLA, employees are entitled to 12 weeks of unpaid leave annually for medical and health reasons. As an employer in a small business setting, the law requires you to grant your employees leave days for reasons including birth and adoption of a child, medical treatment, and care of a new child or ailing family member.
While the law prohibits you from interfering with the employee’s leave, you can require your staff to fill a request form and provide supporting documentation to prove that they qualify for the leave under the FMLA.
Although it applies to all government levels, FMLA only covers private companies with 50 or more employees. Also, permanent, part-time, seasonal, and temporary employees can qualify for the leave under the act.
Since there are numerous reasons that employees may ask for a leave, knowing the qualifying reasons ensures you don’t infringe on your employee’s rights. It also allows you to minimize the abuse of leave days by employees.
Besides the above laws, every state has laws that employers should follow. As a small business owner, you must familiarize yourself with federal and state laws to ensure compliance. You can get more information about labor laws governing small businesses by working with an employment expert. If you are an employee and feel like your employer has infringed on your rights, always consult an employment attorney for legal advice before taking action.