When you start your first business, there’ll be a lot you won’t know. No matter how much you plan and prepare, you’ll be thrown in the deep end, and having to do a learn a lot as you go along. If there’s one thing you can’t afford to wing, it’s employment law. If you neglect the legal rights of your employees, your entire operation could crash and burn. Here are some things you need to know to avoid this.
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First of all, know the difference between an employee and an independent contractor. A lot of business owners, possibly including you, will prefer hiring contractors over employees. This is because independent contractors generally reduce overhead costs. Also, when hiring an independent contractor, you don’t have to comply with certain requirements on wages and hours. Furthermore, you won’t be required to include contractors on insurance or compensation systems. There’s nothing wrong with using these factors to your advantage. However, do not classify employees as independent contractors in order to make things easier. If you’re found out, there’ll be a lot of costly employment litigation top follow. This can ruin your business in an instant, so do your homework.
My second tip is for protecting yourself against your employees. Make sure you outline strict company policies and rules which guard against some situations. Almost every modern office has computers and internet access. What a lot of them don’t have is rules which dictate how they should be used. If one or more of your employees share restricted information, and there was no policy against it, you may just have to sit there and ride it out. Prepare for any possible breach, and make a rule against it. Once that’s done, you need to make sure your employees know about it. Tell your entire workforce, well in advance, that you’re going to be monitoring their use of certain materials. Without becoming an ominous Big Brother figure, let your staff know that any breach of policy will be dealt with severely.
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Finally, make sure you protect and uphold your employees’ statutory rights. These are rights outlined by laws passed by parliament. As you can imagine, they’re not trivial by-laws which you can step around! Every worker, regardless of their employment status or how many hours they have a week, has certain legal rights. Some of these are a given form the start. Others only come into effect when the employee has been with you for a certain length of time. For example, employees have the right to a written statement of terms within two months of starting work. However, they have the right to an itemised pay slip from the first day of work. The list goes much, much further, so look into it. A single slip-up with your employee’s rights can easily turn into a full-blown legal crisis.
Dealing with employment law at a start-up is difficult and tedious. However, some of the consequences of neglecting it are catastrophic! Set a date with your legal team, and make sure you and your staff are completely protected.