Employers: Are You Breaking the Law?

Remember to keep your business legal

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When we think of employers who aren’t keeping up with employment law, we usually think about really bad people. We think about people who flagrantly ignore employment contracts. About people who make their employees miss national holidays. About people who insult staff members if they don’t do their job properly. But the problem with this thinking is that it’s not always accurate. Some employers aren’t even aware that they’re breaking employment law. In fact, their employees may not even be fully aware of it!

And if neither party is fully aware of it then, well, what’s the problem? Why bother thinking about it too much? Well, the fact is that, regardless of how much the directly involved parties care, you could still land yourself in serious trouble. If someone else notices this breach of employment law and reports you, the consequences could be serious. It could put your business in jeopardy. This applies even if you weren’t being particularly abusive. Even if the employee in question isn’t particularly upset.

We have to be careful about employment law. A lapse in judgement could mean that we’re breaching contracts and breaking laws we’re not even fully aware of. When we imagine these law-breakers as evil people, we assume that we couldn’t possibly be doing that sort of thing ourselves. Employment law is an ever-changing and complex thing. This is why so many businesses seek help from employment law services.

Take a careful look at this article. Make sure you’re not engaging in any of these activities in your business!

Non-compete clauses

For many employers, this one seems easy enough and very fair. Let’s say you own a sock company. (Just an example. First thing that popped into my head.) You’ve got employees that are wizards when it comes to the magic of sock making and selling. There’s another company out there, though, who are providing stiff competition. You don’t want them to ever have the resources you have. So you make employees sign a contract that features a non-compete clause. This would legally prevent them from ever working for a competitor in your field.

It seems like there’s a lot of business sense in such a decision. But the fact is that non-compete clauses are very tricky. In the UK, it’s known specifically as a restraint of trade clause. The problem is this. You can only use the clause if you can provide a legitimate, and very strong, business interest that would be severely harmed without it. Otherwise, all you’re doing is throttling an employee’s career prospects.

Withholding final payment

So you’ve had to let an employee go. But they’ve still got some work property. Perhaps they still have a laptop that was provided to them by you so they could work on the go. Maybe it’s not even that big a piece of equipment. Maybe it’s just a set of keys, or a security pass. Whatever it is, they haven’t given it back yet. Some employers may be tempted to withhold the final paycheck until those things are returned.

It seems fair, right? Problem: you’re legally obliged to provide that final payment the second you tell them they have to go. It’s money they’ve worked for. Regardless of what they still have in their possession, you have to pay that final amount as soon as you’re able. If you do need to look into getting property back from a former employee, speak to an expert in legal matters. (This could be an employment law specialist or an attorney.) But don’t withhold payment in order to get that stuff back; it’s breaking the law.

Exempt employees

In case you’re not familiar with the term, an exempt employee is someone who is paid a fixed amount of money. It doesn’t matter how many hours a week they work, or how many days in the month they work. A total has been agreed upon as a monthly salary and that amount is completely fixed. They may also not be subject to laws regarding minimum wage and overtime. They tend to be freelancers, contractors, temporary, or part-time workers. Non-exempt workers must be paid the minimum wage, and overtime laws apply to them with full force.

So perhaps you can see why some shady employers would be tempted to file all their employees as ‘exempt’. It sounds outlandish, but there are companies out there who are made up almost entirely of exempt employees. But some employers overuse the exempt label just because it makes it easier to pay an employee their salary. Make sure you do not engage in improper classification.

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