Small Businesses Often Make Crucial Legal Mistakes
Even highly competent employees sometimes make serious legal errors while handling human resource, management, accounting and other business tasks. Since federal, state and local laws are constantly being updated, you must regularly speak with numerous employees to be sure they’re making timely and lawful decisions.
Should the feedback you receive concern you, it’s always best to consult with your Houston business law attorney to be sure you know how to promptly correct any possible errors. Lawsuits are often filed over very basic legal mistakes.
What are some of the most common legal errors that businesses keep making?
Most mistakes are made when employers try to be flexible with their rules. While compassion can go a long way toward helping you get along better with your employees, clarity and consistency are crucial. Always exercise caution when addressing the following issues.
Each employee must be properly classified. You need to look at each position separately, based on all pertinent state and federal laws. If you simply decide to treat everyone as an “exempt” employee, you might be sued if you fail to provide proper overtime pay or adequate rest periods.
Lunch breaks must be provided when required by law. Some employees may be entitled to a meal break after completing a specific number of hours during a shift.
Make sure you’re properly labeling workers as either employees or independent contractors. You may hear from the IRS if you make this type of mistake. Take the time to speak with your lawyer about how you should carefully interact and communicate with independent contractors. Once a worker has strong legal grounds for believing that “employee” status has been conferred, you can be sued for specific benefits.
You must be sure all employees understand what constitutes “sexual harassment.” If you’re sued in this field, one of your strongest defenses will be that you promptly trained all new managers and employees to help create a healthy work atmosphere. You must also develop a secure way for employees to submit complaints before problems escalate.
You cannot punish or fire an employee for simply taking a leave of absence under the Family Medical Leave Act (FMLA). To protect yourself, keep accurate records of all employee evaluations being conducted at routine intervals. If you’re particularly concerned about the behavior of someone taking FMLA leave, ask your attorney when you should sit down with that employee to discuss why you’re carefully monitoring their work performance – before letting them go.
Be sure to issue final paychecks on a timely basis to all employees who are leaving. Find out if you’re required to provide this type of check even before an employee has returned all employer-provided equipment, vehicles or other materials.
You must handle making loans to employees in a very careful manner. While this is often a kind gesture, you must set up a formal repayment schedule. Never simply deduct a portion of what’s owed from each future paycheck.
Be sure to properly handle all employer obligations under the Americans with Disability Act (ADA). You may need to make appropriate work accommodations and should always treat such workers fairly. Most disabled workers take great pride in being highly dependable and productive workers.
COBRA healthcare coverage must be offered and administered properly. Give serious thought to creating a comprehensive package of this medical insurance paperwork so that it’s immediately ready to be given to qualified employees when they leave. Timing is critical so potential coverage won’t lapse.
The Health Insurance Portability and Accountability Act (HIPAA) must be explained and handled appropriately. Employees have a right to privacy regarding their medical data and information – be sure you’re adequately protecting it while processing claims.
Pension concerns must be addressed in a timely and proper manner. The Employee Retirement Income Security Act (ERISA) is a complicated law that requires extreme attention to detail. Always request legal advice when uncertain how to administer it.
You must carefully handle all responsibilities under the Consumer Credit Protection Act (CCPA). You may need expert help calculating all your employees’ paycheck deductions for lawful wage garnishments – including those for child support and student loans. Look for highly respected software that may help your most experienced workers.
Equal Pay Act. This law must be carefully followed since too many businesses keep failing to pay men and women fairly when handling similar work.
Title VII concerns. Your company must avoid discriminatory practices when hiring, laying off and firing employees. Many businesses are learning to use multiple interviewers with highly diverse backgrounds so that fairness can be readily achieved.
OSHA laws. You must make sure to keep adequate records covering all workplace accidents and injuries for an appropriate number of years -- if you employ ten or more workers.
Should you have any questions about these topics, please contact your Murray Lobb lawyer to discuss your concerns. We have extensive experience providing legal advice to our clients so they can can readily comply with all federal, state and local laws.