4 Things Small Businesses Need to do to Comply with Employment Laws
Small businesses have it tough. They are up against the corporate giants and it can be harder for them to recruit and retain the right talent. One of the toughest parts of running a small business is ensuring you’re compliant with employment laws. While big companies have HR departments and legal advisors, small businesses must figure things out for themselves. When it comes to hiring employees, here are a few things that small businesses need to make sure they do.
1. Get the right paperwork
When you hire someone, by law, you need to obtain several different types of paperwork. This ensures that the person you’re hiring has the right to live and work in the country and also means you have records for legal purposes. Many small businesses use specialist HR software to store sensitive documents from copies of passports to bank details, so it’s easy to access them if they need to check something or are asked to prove they obtained the right documents.
2. Ensure you follow rules for paid time off and work hours
Small businesses often have employees who work long hours to keep up with deadlines and to finish big projects. While there are no laws about how many hours an employee can work in most states, anything over 40 hours needs to be paid as overtime, and consistent, long working hours are often discouraged, as it can lead to burnout.
There’s no legal requirement to offer paid vacation time, but again, it can be good for employee’s mental health to offer something to them.
Many employers offer a package that includes:
- 10 paid vacation days a year
- Parental leave – while you aren’t obliged to offer paid time off to new parents, it can benefit your business to do so
- Sick leave – this is usually accumulated depending on how long the employee has been with you
- Paid leave for bereavements and personal days – this is usually just a couple of days off, but it can be very helpful for employees going through a difficult time
Some employers also allow workers to take unpaid leave when they have caring responsibilities and other emergency situations. You should make sure you know the difference between leave that can be taken unpaid, and things you’re legally obliged to pay for.
3. Know the laws around pay
You should also do some research into the laws around minimum wage and ensure that the amount you’re paying your employees doesn’t bring your employee’s hourly rate under the federal minimum wage level of $7.25 per hour.
If you’re in a state that has its own minimum wage laws, then you need to compare state and federal rates, and pay the higher of the two. For example, Colorado has a state minimum wage of $12 an hour.
4. Following OSHA laws
Most private sector businesses, no matter what their size, must comply with OSHA regulations and laws. Violating OSHA standards can lead to a hefty fine, so even if your business is small and low risk, you should pay close attention to the regulations and ensure you aren’t in breach of any of them, otherwise, you could find yourself in legal trouble.
As a small business owner, it’s important to research both state and federal employment laws so you can ensure employees are kept safe and protected, and you aren’t hit with a large fine.