Having a business of your own with employees is an achievement most entrepreneurs dream of. However, it’s not without a catch, as employers have to adhere to set laws in order to avoid breaking the regulations that govern the employment act. Have a look on these 5 ways you might be breaking employment laws.
5 Ways You Might Be Breaking Employment Laws
1. Categorizing All Employees as Exempt Regardless of Who They Are
An exempt worker is any person who is paid a fixed amount of money no matter how many hours per week he/she is in work. The law states that if you are exempt, you should be exempted from meals, rest breaks, and overtime requirements. Other than this, overtime is mandatory to any other employee who is not an exempt. This is the same in both State and Federal laws. Those who are not eligible to any of these, are referred to as nonexempt and are offered overtime and meal breaks. Most employers find themselves in trouble when they don’t recognize these exemptions. For example, one can face the law if he/she fails to offer a lunch break to non exempts.
2. Giving Employees Freedom of Choosing Hours to Work
It is illegal to allow all employees to work past a given specified hours without giving them an overtime payment. In case you have a time policy in your business, which allows some of them to operate in overtime, you should follow the rules therein stated in your State.
3. Firing an Employee after a Leave
When an employee goes for a leave, such as maternity or medical, and you send her/him home as a disciplinary action, you can be sued.
4. Pretending to Be Kind by Offering Cash as Loans to Your Employees Then Deducting it From Salary
This may sound attractive to employees but in real sense, it may be a curse too in equal measure. The company management is allowed to offer loans to its employees, but not to directly get the cash back from the borrowers paycheck. In most States, it is actually illegal to take any other deductible from an employee unless it’s a benefit or just pay. It is recommended that the borrower does the transaction with the help of his/her lawyer to oversee the agreement and terms of the loan.
5. Withholding Final Paycheck of an Employee Who Owns the Company Asset
In some States, the Federal law restricts an employer from issuing the final paycheck to an employee who owns a piece of property of the firm. On the other hand, there are States that order the company to immediately pay the amount to the person, despite the fact that he/she owns an asset of the firm.
It is advisable for the business and its staff to understand employment laws that govern their state for a better tomorrow. At Gutglass, Erickson, Bonville & Larson, we understand the challenges of dealing with legal issues for your business and we are here to help. Give us a call and we will be happy to answer all your questions. Call us today at (414) 273-1144.