You are responsible for navigating a complex legal landscape as a business owner. From contracts and taxes to regulations and employee matters, understanding the laws that govern how you operate is essential. Here’s a look at some of the most common legal issues businesses face daily and how you can deal with them.
A contract is an agreement between two or more parties intending to create legally binding obligations. It is important to note that verbal contracts can be legally binding if they meet specific criteria. However, written contracts are less likely to be challenged in court because they provide explicit details about each party’s rights and responsibilities. A well-crafted contract can help protect your interests and clarify both sides if you enter into any business agreement.
A breach of contract can cost a business thousands of dollars. That’s why it’s crucial to get the help of a local business attorney when you do encounter this problem. You can file a complaint with the attorney and get compensated for your losses if you ever experience one.
Taxes are one of the most critical legal issues businesses must consider when operating in any jurisdiction. Depending on where you live, you may be required to pay local taxes, federal taxes, state taxes, or all three.
The average small business usually spends around 19% of its total revenue on taxes, including property and wealth tax. That’s why it’s essential to file your taxes diligently each year and stay up-to-date with any changes in the tax code. Furthermore, business owners should not mix their accounts and business accounts, as this can confuse them when tax time rolls around and may result in costly errors.
Additionally, there may be different rules about which income or expenses are tax deductible in each jurisdiction. To make sure you comply with all applicable laws and regulations, consulting with a qualified accountant or lawyer specializing in business taxation law is essential.
When hiring employees for your business, you must understand employment law in your jurisdiction and any relevant federal laws related to labor and employment practices. This includes everything from payroll regulations to anti-discrimination policies to minimum wage requirements, which could have profound implications if not followed correctly. Here are some essential employment laws that every business should know:
Fair Labor Standards Act (FLSA)
The Fair Labor Standards Act (FLSA) is a federal law that sets the country’s minimum wage and overtime pay. The FLSA applies to all businesses regardless of size, so it’s essential to familiarize yourself with the law. It requires employers to pay employees at least the federal minimum wage and overtime pay for hours over 40 in one workweek. In addition, employers must maintain accurate records of their employee’s wages and hours worked.
Equal Pay Act (EPA)
The Equal Pay Act (EPA) is an amendment to the FLSA prohibiting gender-based wages among companies. This means that employers must provide equal pay regardless of gender unless there is a seniority system or merit system in place—in which case any differences must be based on those systems rather than gender. It also requires employers to keep accurate records of their employees’ wages and job classifications for review by the U.S. Department of Labor.
Family and Medical Leave Act (FMLA)
The Family and Medical Leave Act (FMLA) is a federal law that provides eligible employees with at least 12 weeks of leave, especially regarding medical issues. All public agencies—including state, local, and national employers—and private sector businesses with 50 or more employees must comply with this law if they have employed those workers at least 12 months before taking leave.
Employees are entitled to take FMLA leave if they have worked at least 1,250 hours during their 12-month period before taking leave. Employers must also provide continued health insurance coverage while an employee is on FMLA leave without charging them additional premiums or contributions beyond what they paid before leaving.
Consulting with an experienced lawyer can help ensure that you remain compliant with all applicable laws and regulations regarding your employees’ rights and benefits. Ultimately, the laws listed above should be engraved in your mind, as they can ruin your business if not followed correctly.
Navigating the legal landscape of owning a business can be daunting. Still, it doesn’t have to be overwhelming if you take the time to understand applicable laws and regulations related to contracts, taxes, and employment law. By staying informed and consulting with professionals when necessary, you can ensure that your business meets all applicable legal requirements while protecting its interests.