The next tip for those who own, or want to own, a small business: know the employment laws that affect your business.
If you are in business, your purpose is to make money. To make money, most companies need workers to run the business. Last month we discussed the difference between an employee and an independent contractor. If you decide that you are going to hire “employees”, then you need to know and comply with the various federal and state employment laws in effect.
For instance, there are various federal laws that prohibit discrimination in employment. Those laws include: (1) Title VII which prohibits employment discrimination based on race, color, religion, sex, or national origin, (2) the Equal Pay Act which prohibits sex-based wage discrimination, (3) the Age Discrimination in Employment Act (ADEA) which protects individuals who are 40 years of age or older, (4) the Americans with Disabilities Act (ADA) which prohibits employment discrimination against qualified individuals with disabilities, etc. There are also similar state laws in Arizona that protect employees against discrimination. You also need to comply with federal and state laws that establish minimum wage, requirements for payment of overtime work, recordkeeping and child-labor standards. And then there are medical leave laws such as the Family and Medical Leave Act (FMLA) and worker’s compensation standards as well.
Not all of these laws affect every business because some of them only apply to businesses with a minimum number of employees. For example, FMLA only applies to employers with 50 or more employees. Every responsible small business owner should become aware of and comply with the employment laws that affect his/her business. You certainly do not want to first become aware of a law that affects your business when you get hit with a government agency complaint or lawsuit.