Updated in February 2022.
Congratulations! You're hiring new employees for your small business. This is a big step in your recruiting strategy that should be celebrated. After all, it shows you are growing as a business and how you are thriving. However, there is one disadvantage to this momentous step: you must recognize and ensure that your business follows labor law compliance.
What Is Labor Law Compliance?
Labor laws are comprehensive regulations and rules existing at the federal and state levels. Labor law legislation exists to protect employee rights, and they require further education on the part of the employer. As a business owner, you must comply with these laws, or there will be grave financial consequences that could damage your bottom line. Every small business must remain vigilant about labor law compliance. Keep reading to learn more.
Know Which Labor Laws Affect Your Business
To ensure your business is compliant, you must learn which state and federal laws affect your business. Unfortunately, there are many different applicability variations of how a law could impact your business, even though federal laws apply to everyone across the county. For example, the Age Discrimination Act requirements only apply if you employ 20 or more individuals.
Each state has its own set of labor law requirements, in addition to national laws. Visit your local state agency's website to familiarize yourself and your business with state requirements in charge of employment. This office is often called the Department of Labor or something very similar.
Create a Checklist of Compliance
Once you understand which employee laws pertain to you, creating a labor law compliance checklist can help you stay organized. For example, you will likely need to feature both federal and state law posters in your place of business. With your required notices compiled neatly into a checklist, you will know how to stay compliant ahead of time. If anything on this list is recurring, it's helpful to keep an employee calendar, asking staff to keep up with it to ensure appropriate deadlines to complete tasks.
Make an Employee Handbook
Taking the time to create an employee handbook is a worthwhile pursuit. With an employee handbook, your staff understands helpful information about their rights. Also, the information in this handbook can help reduce misinformation that can sometimes lead to lawsuits.
When you're looking to create an employee handbook, you must continually update it to ensure it's following current business practices. This way, it will always remain an accurate reflection of how your company handles its policies. It is also good to have each employee sign a form acknowledging that they have received and read the handbook. The same goes for any subsequent updates.
Perform Job Discrimination Audits
As a business owner, you most likely know that discriminatory practices can open your business up to employee grievances, many times, which can be quite costly. Several HR and employment practices are probably already in place within your company. Therefore, it is a good idea to do a self-audit. This practice ensures that you are not wading into discriminatory waters.
When proceeding with an audit, first identify the anti-discrimination regulations that apply to your business. It is also essential, as discussed above, to pay close attention to state laws, as well. For example, some states protect gender identity rights, while others may not.
Utilize an Employee Agreement
Always use an employee agreement, otherwise known as an employment contract, whether you are looking to hire full-time staff or looking for help on the side. This action will help solidify and strengthen the employment relationship while protecting your team's rights and your business.
When you write out responsibilities for your employees, there is less confusion about the employment relationship. A document like this should be as comprehensive as possible, offering protection to both sides. There are multiple ways to go about generating this document. For example, you could create a customized agreement template or hire an attorney to draw out an agreement. No matter what, this is not a document to overlook.
By keeping in control of all the actions required to stay compliant with state and federal labor laws, you can avoid a major headache later on. Be proactive towards reducing the potential consequences of non-compliance in your workplace.
Looking for Guidance on Labor Law Compliance?
At Infinity Consulting Solutions (ICS), we provide top-of-the-line compliance services, so you can focus on the other essential aspects of running your business. Our compliance services include background screening, drug testing, new hire paperwork, and employment verification.
ICS Payroll solutions will ensure appropriate classification and assume responsibility regarding any worker's IRS inquiries associated with our payroll program.
Please feel free to contact us today with any questions about our compliance services for your staffing needs.