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Do You Work for a Small Business? Your Employer Might be Breaking these Laws!

Working for a small business has its advantages. Many people enjoy employment at a smaller company because they feel things are more personal. Everyone above them in the company knows who they are and in many cases, their ideas and concerns are better heard. There might also be more flexibility when working for a small business – with fewer employees, bending rules or offering perks is easier than when there are hundreds of people.

Unfortunately, small business employment is not always rosy. Small businesses tend to offer fewer benefits and opportunities for advancement. And sometimes they break laws without even realizing it. Small businesses might not have human resources departments, and when they do they are likely one or two people handling a variety of tasks that would be managed by several people at a larger company.

There are also cases in which a company is aware it is breaking a law, but figures it can get away with it because it is smaller. This is sometimes the case when a business offers certain perks that aren’t available at larger companies. They are hoping their employees will “look the other way” because they are getting something. Unfortunately, this can result in unfair treatment and even damage the careers of those involved.

What are some of the most common ways small business break the law?

Breaks for Lunch
Most states require employees get a break during the day to eat. With a small staff it can be tough to schedule coverage for lunch breaks, but it’s necessary. If you are a non-exempt employee, you are entitled to a lunch break by law.

Independent Contractors
More and more companies have tried to get away with IC classification in an effort to slash budgets, but this practice is getting many businesses into trouble. The IRS is cracking down on independent contractors and verifying they are truly independent – as opposed to employees classified by their employers as ICs to save money. If the company you’re working for has you listed as an IC and you think this is incorrect, you might need to clarify IC laws with an employment attorney.

More information about how the IRS defines independent contractors.

In an effort to quell their fears about competition, some small businesses ask employees to sign non-compete agreements. This locks employees into staying in their jobs, or at least not leaving to work for a competitor. Non-compete agreements are heavily restricted and many do not hold up in court. If you are asked to sign a non-compete, show it to an attorney before signing.

Occasionally, small businesses play games with paychecks. They ask employees to wait to cash their checks or they wait to issue paychecks beyond the scheduled pay date. This is especially problematic when an employee resigns or is terminated and what the employer believes is company property must be returned before the check is issued. If your employer or former employer owes you money that has not yet been paid, you have the right to speak to an attorney.

Just because you work for a small business doesn’t mean you aren’t guaranteed the same rights as employees at larger companies. There are some laws that only apply to larger companies, but this is often not the case. For more information or to determine if an employment law pertains to you, contact Borrelli & Associates, P.L.L.C. to discuss how we can help you.


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