One of the biggest milestones for small business owners is hiring employees. While being able to add employees to your team is a great sign — and a great way to take some of the pressure off of your own shoulders — it can also expose you to law violations if you are not careful.
As the U.S. Small Business Administration explains in an article on this topic, business owners with good intentions sometimes violate the law unknowingly, so it’s very important that you take the time to understand some basic principles before making any hires.
Here are some common employment law violations to be mindful of:
Misclassifying employees. It’s extremely important to classify workers correctly as exempt or non-exempt. When a worker is classified as exempt it means that certain protections such as laws mandating overtime pay and mealtime breaks do not apply to the worker.
Although it may seem easiest to just classify all workers as exempt, only certain workers can be classified as such under the law. Misclassifying a worker as exempt when they should really be non-exempt can lead to employment lawsuits.
It’s also very important to properly classify workers as employees or independent contractors, which you can read more about here. Calling employees independent contractors can also lead to legal repercussions.
Not scheduling a lunch break. Many states, including Colorado, have laws requiring non-exempt workers to get lunch breaks and rest breaks depending upon how many hours they have worked. Allowing employees to continue working through their required breaks could violate the law and expose your business to liability.
Check back next week for the rest of the employment laws that are commonly violated by unknowing employers. In the meantime, consider meeting with a business attorney to make sure that all of your hiring practices are in line with the law.