Employment issues can play a vital role in the success or demise of a business. If you own a small business or run a corporation, you need to be aware of the consequences of violating employment laws.
Many business owners violate employment laws without realizing it, according to a report by the California Chamber of Commerce. These violations can result in costly litigation to resolve disputes involving employees or state or federal regulators.
Understand the most common types of violations
The risk of violating employment laws varies per business. However, every business owner needs to be aware of the ways they may be violating certain laws and what steps they can take to reduce the risk of a lawsuit. Below is a list of the most common types of violations by employers, and what employers can do to prevent or fix these mistakes:
- Classifying all employees as exempt: this mistake often results in employees not receiving their mandated meal and rest breaks or being paid overtime wages according to state and federal laws.
- Classifying employees as independent contractors: only employees who are actual independent contracts can be listed as such. This mistake can result in labor law violations and tax issues.
- Failure to provide harassment and discrimination training: California law mandates that managers and supervisors receive proper training on harassment and discrimination complaints.
- Firing employees after they take a leave of absence: employers are prohibited from firing employees who take family or medical leave, serving on jury duty or for military leave.
- Not providing a final paycheck to an employee: you may be required to provide immediate payment to terminated employees. This can be a complicated issue if the employee has not yet returned company phones or laptops, but you may still be required to provide a final paycheck.
- Asking employees to sign non-compete agreements: California prohibits employers from having employees sign non-compete agreements or clauses. There are a few exceptions but it is best to consult your situation with an attorney first.
- Not paying employees money-owed for unused vacation days: unused vacation time must be paid to employees when they leave. Failing to pay this can result in a claim for unpaid wages and other labor violations.
These violations are serious. Your business can be harmed by employment violation claims so it is best to understand your risks and take action now to protect your company. Working with an experienced attorney can help you better understand employment laws in California and what steps you should take to prevent a lawsuit.