As a small business owner, you should be aware of the employment law regarding the hiring of employees. This is because you can find yourself on the receiving end if you don’t understand your employees’ obligations in relation to the law.
One thing remains certain when it comes to employment relationships in the United States; an employer or employee can terminate the employment relationship at will, provided that it is legal.
For you to preserve this legal right, you must avoid assuring your newly employed staff or prospective employees some job security. The same case should apply when hiring a highly qualified or talented employee to work for you. If you choose to go this way, you should consider separating yourself from the rest of other employers especially if you are willing to provide a contract that promises new employees some sort of job security. So, what is there to know about the employment law?
Prepare a Payroll
Before you can hire new employees, you should establish a payroll. This payroll plan requires you to acquire an Employer Identification Number including the local or state tax IDs. Once you are done with preparing the payroll plan, the next task should involve a plan that caters to your employees’ vacation time, holidays, or any other form of leave.
With the payroll, you can handle it on your own or outsource the services from professional payroll planners. On the other hand, the person in charge of the payroll at your business should be familiar with all records that matter the most.
For you to meet the requirement of the federal tax you have to submit a quarterly and annual report on payroll taxes. Plus, each employee at your business should return their completed W-4 Forms at the beginning of their employment period. All these requirements are laid down in accordance with the employment law.
Avoid Discrimination During the Hiring Process
Employment lawyers in various states and cities will remind you of the importance of fair employment. This is due to the fact that state, federal, and local laws are tailored to protecting all workers including those with certain characteristics. These laws do not encourage any form of discrimination when hiring new employees.
Most potential employees are discriminated against by sex, race, religion, age (above 40), and nation of origin.
Different states have employment laws that offer protection against a wide range of characteristics. Most of these laws cover different types of businesses more than federal laws. As such, you should not just assume that being in compliance with federal laws is all you need to do. Instead, you should be aware of employment laws regarding discrimination when hiring or firing your employees. Bear in mind that employment litigation is a costly affair and an unnecessary burden on the progress of your business.
Provision of Employment Benefits
Employers should provide certain benefits to their employees. This is according to federal law. The benefits include workers’ compensation and insurance. You can handle these benefits on your own if you have the time or use a private insurance company or state employees’ compensation program to make your work easier.
The other requirement entails remitting Social Security taxes on behalf of your workers. Besides, every employee regardless of their position deserves the leave benefits as stipulated in the Family & Medical Leave Act (FMLA). Some states such as New York, California, New Jersey, Hawaii, and Rhode Island, require each employer to provide disability benefits to their workers as directed by the employment law.
That said, you may decide to offer additional benefits to attract employees as a way of giving your business some competitive advantages. Other benefits you may provide your employees include flexible working hours, company-paid recreational activities, and stock options among others. However, the benefit you offer should depend entirely on the work that an employee handles and the nature of your business.
Draw a Line Between Employees and Independent Contractors
Your workers can have a huge impact on your business’ tax liability regardless of whether you are dealing with independent contractors or employees. The two groups of workers can influence your business in one way or the other. Only that employees have some rights that independent contractors don’t. They have a right to minimum wages and benefits.
But when you fail to classify someone working for you as an employee you are likely to face some ramifications. Your action may lead to significant financial consequences such as paying back taxes, back wages, and even penalties. So, you can avoid all that by doing the right thing according to the employment laws of your state or city.
That is why you need to make a clear distinction between an independent contractor and an employee. In simple terms, independent contractors have their own businesses but they bill your business or organization depending on the type of work you assign them to do. These contractors use their own tools and materials to perform their duties. They even have absolute control of their work progress.
That is all you need to know about employment laws if you are a business owner. These laws will help you run your business smoothly while developing a healthy work relationship with your employees. Make sure you are aware of such laws in your state or city to avoid future problems with your employees.