This morning at a meeting I was talking to an employment attorney I know and the topic got around to small business employment practices and the risks that small business owners might not realize they are taking.
Among many items we discussed 3 stood out. Many small business owners we meet with are unaware of the consequences that could result from their lack of attention to human resource (HR) legal issues. Here’s my list and my take on each one of the topics the attorney reviewed. Obviously seek competent legal advice before taking any actions:
- Getting Confidentiality Agreements from employees – I rarely see businesses that have taken this step but I have seen many, many cases of businesses who were damaged and could not go after the offender. The more important the employee the more important this could be.
- Documenting overtime practices, payments and procedures – failure to properly pay employees for overtime can have expensive and painful consequences. Those painful consequences could, in some cases, go to the business owner personally, without the corporate shield so many depend on.
- Making sure that employees who are not paid by the hour are classified, managed and have responsibilities that are appropriate for the hourly exemption requirements in employment laws. According to the attorney, just because a business owner and an employee agree to weekly pay, instead of hourly, it doesn’t necessarily mean the business owner is not obligated for other expenses and claims which may include back pay for overtime and the significant penalties that could be assessed.