Tips to avoid labor law problems while running a firm

The current labor laws around the world are “non-business-friendly,” which makes life hard for employers. In my experience as a consultant in the past, we have audited many entrepreneurship ventures and found most of them to be severely non-compliant with many employment regulations and standards.

A CEO could face severe disruption or fines if a government agency finds its company violates local labor code regulations, which are extensive. Grumpy ex-employees can discover “trolling” lawyers who will pay them a fee for insider information, leading to their filing an expensive suit against you for even minor violations. Various bar attorneys have prospered from this confusion of regulations and have targeted numerous small-sized businesses with an employment-related lawsuit.

So is in your best interests to take the steps necessary to ensure you are compliant with the state’s labor laws. The guidelines outlined in this article are intended for use by employers with under 40 employees. For those firms with over 40 employees, this information is still valid. Still, there are other major legal requirements that the larger employer must consider to be entirely docile with the labor codes, such as federal and state leave laws and sexual harassment training for your leaders. For the smaller entrepreneurship firms, here are the few areas on which you will need to focus.

Be compliant with all Health and Safety regulations:

In almost all developed nations and developing economies, every employer has a legal obligation to provide and maintain a healthy and safe workplace for its employees. In most of the states in America, the law states that each employer must have in place a written and effective Illness and Injury Prevention Program. This does not have to be a complicated document but must include certain elements. You can get a sample from the state for developing a plan for your office. In addition to creating a plan, there is a necessity that you train your workers on preventing workplace hazards (and record that training). 

Pay close attention to how you are paying your workers:

in America, most state employment laws “trump” federal regulations because state standards are normally stricter. Many entrepreneurs commit a significant mistake of paying all of their employees a straight salary to keep payroll an uncomplicated process. This is especially true in businesses that have an office setting. This can be a hazardous approach as you most probably will violate overtime rules that have very stiff penalties. Study your local regulations to know your employees’ legal requirements for breaks, overtime wages, and lunch periods.

Secure Personnel files and respect your Employees’ Privacy:

Today, the law protects employees’ privacy with some sizeable severe sanctions against companies who violate a person’s medical identity or privacy. Focus on dividing primary personnel information into two files: a personnel file (with payroll tax forms and basic job information in it such as performance reviews, training documents, and commendation or disciplinary notices) and a different confidential file with credit, medical benefits, and dependent or family information. Managers or other interested management must be kept away from the confidential file. Only the individual chosen as the human resources record keeper is to be entrusted with the access to the classified file. Make sure these files are safe. 

Don’t forget to verify your employees’ work status adequately:

The immigration officials are under increasing pressure to implement the laws, and authorities agree that enforcement will grow in the coming years as the global debate wears on regarding illegal immigration. There have been some well-publicized raids all over the world. Employment form documents must be filled in properly and kept up to date if certain documents are offered on an employee’s legal status to work in any country. 

As an extra measure, you should also utilize the government’s free service to verify that the social security numbers or any other identification numbers in a specific country presented by candidates are valid, which will reduce the chances of hiring an illegal alien. This may become a necessary requirement soon as the immigration service cracks down on companies. The state governments around the United States is now using tax filings with invalid or mismatched social security numbers to look for companies who intentionally hire workers in the US without correct labor authorization.

While this article doesn’t include every labor code issue employers may face in different countries, it does cover the “major” areas, which will give you an important head start to being nearly compliant with state and federal laws of a particular country. It might be a sound investment for every entrepreneur with more than fifteen employees to have a human resource and payroll audit done annually by an HR professional. This can help you spot non-compliance or vulnerability areas so that you can address those issues before they become a significant crisis and expensive disruption of your firm.

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