Three Legal Aspects of Small Business

by | Small Business Consulting

It’s no fun being paranoid, and there is no intent to make you worry unnecessarily here, but the fact is that as a small business owner or operator, you need to watch your own back when it comes to potential legal troubles.

The chance of legal action is always present when you’re in the process of exchanging goods or services for pay – defective products, disputes over contracts, all sorts of potential liabilities, or just plain disgruntled customers can rear their heads at any time. Unfortunately, it just comes with the territory. But there are several broader, front-page type legal problems that are attracting attention from both business owners and their lawyers.

Have a quick look at this list, and then confer with yourlegal counsel to make sure you’re doing everything possible to stay compliant.

Immigration Issues

This is a problem that weaves in and out of high-profile political and business discussions every few months, and never really goes away or finds resolution.

No matter who’s currently saying what in Washington, or what the norms might be in your particular industry, it is still against the law to hire and employ illegal or undocumented workers in the United States. Don’t do it! Fines and penalties for you, as the employer, can be substantial.

Ironically, as national sentiment toward how to handle the situation seems to have softened (in favor of the undocumented workers), government audits and raids on businesses in industries that tend to hire these workers have been stepped-up over the last four years. Don’t be a victim! You should make sure all your employees can legally work in the United States, using background checks if necessary.

For information on immigration issues for small business read MP Star’s post on deferred action. 

Hiring Discrimination

If there’s an issue employers face that’s more delicate than illegal immigration, it could very well be the specter of discrimination based on race, gender, age, religion, sexual orientation, or other protected statuses.

Remember the expression about “an ounce of prevention?” That applies here. One example: When making a new hire, be sure you save all the applicants’ resumes and notes from interviews. If allegations of hiring discrimination popup, you can use the information to demonstrate why you hired a particular individual over another, and that the decision was made based on qualifications, experience and ability to perform the tasks tied to the position.

If you’re worried that any of your hiring practices might expose you to charges of discrimination, talk with a human resources consultant, or an attorney that specializes in workplace issues.

Health Care

It’s a constant source of anxiety and uncertainty. Concerns over health care laws in general and the Affordable Care Act in particular continue to rank high in surveys that ask business owners to name their biggest worries.

Under the law, companies with 50 or more employees will be required to provide health care insurance for their employees beginning January 1, 2014. State-run health insurance exchanges were supposed to be set up this year, which would have allowed business owners to determine what it would cost to buy insurance. But it now appears that the exchanges may not be up and running until 2015.

In addition, some business owners may decide that it makes more sense to pay the $2,000-per-employee fine, rather than incur the cost of insurance. And if you are close to the 50 employee mark, it’s possible that you might decide to not bring on additional staff, so the law wouldn’t apply.

Confused? You’re not alone. Read this overview of the Affordable Care Act, compiled by the National Federation of Independent Businesses, to see how it could impact your company. But remember, the implementation is still evolving. And check back with MP Star Financial for more information on the health care law’s progress and other legal aspects of small business.


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