Businesses that have employees typically need them in order to survive, but business owners can easily get themselves into trouble by making common mistakes. Business owners have to figure out how to make the local municipality happy in order to operate, how to pay people properly (this one is VERY tricky), on top of monitoring and overseeing employee work and conduct, among other operational considerations. It’s a lot to keep track of and way too much for most people to fully understand and interpret without a legal background. Mistakes in any of these areas are common and can be quite costly should you end up defending against a frivolous lawsuit or issue. 

Know and accept that protecting yourself in business is not foolproof. There’s always a possibility that legal trouble could come up no matter how well you’ve tried to protect yourself, whether or not you’ve made decisions that somehow contributed to the matter. However, you can begin to lay foundations that will—to some extent—protect the business and hopefully help mitigate future problems. Overall, taking some of these steps can help you operate a better business for you and your staff.  

First and foremost, you need to set yourself up with some employment basics. You’ll need to know that the way you are classifying and compensating your workers is accurate, in that you’ve collected and maintained all necessary worker information and provided them with anything you are required to by law. You might be asking yourself how to find all of that information. While internet research can do so much, you should consult with an employment attorney to help you come up with a plan on how to hire and classify the people working for your business. Alternatively, an HR consultant could help, but an attorney would serve better in answering some of the more difficult or legal questions. Particularly in California, employment law changes very, very fast, and many of the new things that come out are difficult for employers to interpret correctly on their own. It’s a good idea to develop a relationship with an employment attorney from the beginning, that way if you are ever served with a lawsuit, you don’t waste valuable time looking for an attorney before responding. 

As far as day to day operations, it is also important that your employees know what to expect from you, as well as what is expected of them. This is where you’ll develop policies, learn to keep proper documentation of employee records, progress, write-ups, etc. There are places online where you can get these types of documents, however, please do NOT do this. I have witnessed clients who had been giving their employees policies that do not apply to their particular business at all, based on size of the employer, industry or other factors. Just because there are agreements out there at a discounted price or free, does not mean they are applicable within your state or for your particular business. Employment attorneys and advanced HR professionals can help you develop policies that make sense for your industry, your professional brand and that also adhere to local, state, and federal laws. 

If you are reading this and panicking because you’ve already been in business for a while, never got help, and are feeling unsure if you’ve made the right moves—fear not. Employment attorneys can do an employment practices audit (often a fixed price service), where they review your current hiring methods, policies, payment structure, etc. in order to provide insight and suggest changes. I highly recommend this as an option for those who are already in business and want to ensure they’re on the right track. This again goes back to building a relationship with an employment attorney. Many seem to create an awful image of employment defense attorneys who represent businesses, when in reality—outside of their litigation cases—they are often providing these kinds of services to small business owners and occasionally take the difficult HR advice call. If you are tempted to pass up this kind of help because it’s “too expensive,” let me tell you from experience that lawsuits are exponentially more expensive than a little legal help here and there. This expense could save you big time or prevent a lawsuit altogether in the future. 

For outside help in the event of an emergency, liability policies can be a business owner’s best friend. Having a general policy like this can protect against the types of claims that can arise out of owning a business. However, it's not always possible to get coverage for wage and hour related claims, as they are generally considered by insurance companies to be intentional violations by the employer. Again, this further builds the importance of setting yourself up with good payment/operations policies with expert help from the beginning or ASAP! 

In addition to wage and hour claims, you have to be aware of what’s going on in your business day to day, both in general and supervising employees. How they are interacting with each other, with customers, and to make sure they’re not doing anything that could damage your business in any way. You have to both have a good set of policies and procedures for everyone and will need to be consistent and fair in your enforcement of policies and discipline. Wrongful termination suits and discrimination suits can very commonly be born out of inconsistent enforcement of policies for different individuals. 

Truthfully, this area of law is fascinating because it changes constantly due to the way our workplaces have changed over time. While that may be interesting for someone like me, it is understandably a frightening headache for the average business owner. Don’t ever think of reaching out to professionals to guide you with and policies and practices for your company as money wasted. When you protect your business and do things right, it can potentially save your livelihood and bring peace of mind, knowing that even when things go wrong, you’ve already taken some action to prevent things from being worse than they need to be. As always, be smart and be careful out there!