Three Of The Most Common Ways Small Businesses Break The Law

30 December 2015
 Categories: Law, Blog

There are a lot of laws that govern companies and employees in the United States, and it's sometimes tough to keep updated on everything. Large corporations have dedicated lawyers to handle their proceedings, but many small businesses don't have that luxury. Unfortunately, it's easy for a small business to be violating laws without even realizing it. Here's a look at three of the most common ways that small businesses run afoul of the law.

Being "flexible" with breaks.

Federal law doesn't mandate lunch or coffee breaks for employees, but many states do require at least a 30 minute break during a full workday. Some states even mandate when this break must happen. California, for example, requires that a lunch break occur no later than the fifth hour of work. Giving the option for (or requiring) employees to work through their lunch is illegal in many cases. In a lot of states, even if an employee wants to work straight through lunch to get off a little earlier, that's not a legal option. Check with your state's Labor Office for specifics on the laws in your area, but as a general rule, you can't be flexible with breaks.

Not paying out unused vacation time.

A lot of companies have a "use it or lose it" policy when it comes to paid vacation time, meaning that any unused vacation time is lost at the end of the year. Where businesses mess up though, is that some states consider paid vacation time as compensation. And even if an employee doesn't take that time off, it still has to be paid out at the end of the year or when the employee leaves the company.

Withholding a final paycheck until company property is returned.

It may seem "fair" in the eyes of an employer to withhold a final paycheck until all company property like laptops and cell phones are returned. Employers are not legally required to give employees their final paycheck immediate upon termination, but they are legally required to provide that paycheck with a normal time frame, regardless of any other circumstances. This means that a company can't hold a paycheck as ransom for the return of company property.

Running a small business if tough, especially since it's so easy to break laws without even realizing it. That's why a business of any size needs a business law attorney they can call with questions, and that looks over their records, manuals, and procedures regularly. Violating laws (whether you meant to or not) could lead to big fines, so it's an investment that's worth the peace of mind.