Is Your Small Business Breaking the Law?

You have been breaking the law for a long time, but you were not even aware that you were. Does this sound familiar? Ignorance of the law is no excuse: as a small business operator you need to familiarize yourself with local, state and federal statutes and follow each law accordingly. Still, there are times you may discover that you have been breaking the law or perhaps taking short cuts that can come back to bite you.

Read on and we will look at several areas where your business practices can cause you trouble.

Independent Contractor
You have retained the services of one or more individuals to handle your finances, to advance your marketing needs or to file your paperwork. These individuals are classified as independent contractors because they provide a service, but are not directly employed by you. Or are they?

Classifying any worker as an independent contractor is fraught with risks, especially if you exercise control over how this person does his work. The IRS looks at three common law rules — behavioral, financial and relational — when making that determination. IRS Form SS-8 can help you discover if you are falling the law or have exposed you and your business to legal action.

Exempt Employees

If an employee is classified as “exempt” that means certain rules pertaining to hours worked and breaks taken do not apply as they do to non-exempt workers. Typically, companies will choose the exempt route to avoid paying overtime and benefits.

The U.S. Department of Labor may question your categorization of some employees. Commonly used exemptions include farmworkers, salesmen, seasonal workers, outside sales teams, commissioned sales staff and computer professionals. There are other categories that are also exempt, therefore a visit to the Labor Dept. website can avail you much.

Personal Loans
An employee has gotten herself into a bind and asks that you advance her $1,000. You agree and give her the money with plans to deduct $100 from her next 10 paychecks.

As helpful as you may want to be, you are not allowed to deduct anything from employee pay beyond pay or benefits. What you can do is provide this employee with a promissory note, handling repayments separately.

Vacation Considerations
Your employees are provide one week of vacation for every six months worked. After five years they get three weeks vacation, rising to four weeks after ten years. As generous as your company is, you require your employees to “use it” or “lose it” if their vacation time is not used by the end of the calendar year.

A company’s vacation policy can run afoul of state law wherever it is considered a form of compensation. If an employee leaves your business with unused vacation time on the books, some states require that you compensate them when they leave. Know the law and be prepared to follow it.

Leaves of Absence
A key employee takes an authorized leave of absence and while this individual is gone, you terminate him. The outrage of such an action is one thing, but you may be in deep trouble with the law if their absence is legally protected.

Family, medical and military leaves are generally protected by law. As are employees that serve on a jury. Do not misunderstand your state’s “at-will” employment policy. Federal law may over rule state law and anyway your state law may have something to say about it too.

Law Abider
Always check with your state’s department of labor to ensure that you are maintaining your business within the law. Other areas where employers break the law include breaks for law, holiday pay, part-time work, job sharing, travel time and weekend work. Ignorance won’t help you avoid legal action, therefore consult with a business attorney to ensure that you stay within the law.

In the early days of the internet, to receive a high position on search engines you probably didn’t need seo consulting services but with the search engines becoming more wise to the black hat ways of the world, it would be advisable to avoid breaking the internet laws and look to get seo consulting services before you wind up breaking internet laws and costing you and your website money and rankings.

SEO Consulting Services

IRS: Independent Contractor (Self-Employed) or Employee? —

United States Department of Labor: Work Hours —

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Mark Montoya has been working in personal branding for more than a decade for hundreds of online and offline companies, small businesses and individual service professionals. His focus has been toward improving the way jobseekers find employment on the Internet. He has synthesized his expertise by helping job seekers obtain their ideal choice of employment over the Internet on his sites and, and through his books 101 Tips Every Job Seeker Should Know and The Ultimate Online Job Search eBook.

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“It is the responsibility of the individual to reject the prospect of mediocrity and to strive for the betterment of society as a whole” ~ Mark Montoya

Frank Roberts writes for Swope, Rodante P.A., a Tampa law firm specializing in cases involving traumatic brain injury, wrongful death, automobile collision, and catastrophic injury.

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