BEWARE SMALL EMPLOYERS - TOP 10 WAYS TO AVOID BEING SUED

Lawsuits can be death for small businesses. In more than 20 years of legal advice to employers and employees, I have seen repeated mistakes by employers, most of which could have been avoided. Don’t despair if you recognize yourself in this list; most employers stumble on more than one. The solution is to change your procedures NOW, before a disgruntled employee takes action.

DO NOT:

1. Hold an employee’s final check “hostage” until return of uniform, cell phone, keys, and/or other company property.

2. Automatically characterize all employees as “exempt” from the overtime laws and pay them a salary.

3. Pay employees in cash. You still have to take withholdings, itemize, and document.

4. Allow employees to work through breaks and leave early.

5. Hire “independent contractors.” Most workers do not qualify as independent contractors and various taxing authorities are watching this closely.

6. Loan money to employees and then deduct whatever is still owing from final paychecks.

7. Have a “use it or lose it” vacation policy.

8. Fail to document your employees’ hours worked.

9. Ignore complaints that an employee is being “bothered.” Red flag. This is code for sexual harassment.

10. Fail to have an employee handbook. All employers should have one, even small employers.

While these may be my “top 10,” unfortunately there are many more ways that employers—especially small employers—can run afoul of the labor laws, sometimes with catastrophic results. Your best strategy is to be pro-active and get solid policies and procedures in place with the help of a knowledgeable professional. As the only employment law specialist in East Contra Costa County, I can help: Rhonda@alvisfrantzlaw.com or (925) 516-1617.

By: Rhonda Shelton Kraeber, Esq.

Disclaimer: The information provided is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to your particular issue or problem. Use of this information or any related information does not create an attorney-client relationship. The opinions expressed at or through this site are the opinions of the individual authors and does not reflect the opinions of any firm or attorney.

WHEN DO ENTREPRENEURS NEED A LAWYER?

by Barbara A. Frantz, Attorney at Law

Some entrepreneurs wait until they have a legal problem before consulting an attorney. Others make an attorney part of their business team, just like their accountant, banker and marketing and sales force. Analyzing the legal costs over a five year period for companies who use attorneys preventively, shows a dramatic savings. The faster your business grows, the more likely you will need legal counsel to protect the wealth that you are building through your business.

Here are some guidelines for when you should hire an attorney:

• A regulatory agency (such as the Health Department) contacts you.

• You are going to sign your first big contract.

• You buy or lease your first office space.

• Someone wants to invest in your company.

• You're not sure about your insurance needs.

• You want to standardize your contracts.

• You are sued or are thinking of suing someone.

• You want to patent, trademark or copyright something.

• You're designing your employee policies and procedures manual.

• You plan to export products or set up offices outside your home state.

• New legislation is adopted that you think might have an effect on your business.

Look for an attorney that you feel comfortable with who emphasizes "business transactional law" or who calls him or herself a business and corporate lawyer. Some attorneys who call themselves corporate lawyers only specialize in "securities" (stock investments in corporations). For the most part, you will be paying an unnecessary premium for their expertise on your simple business matters. Do not be afraid to have several attorneys for different needs.

Whether you make an attorney part of your team or wait until you have a specific legal problem, you must set aside money for legal fees from every item you sell, or service you provide. That money may ultimately be used for your company's expansion, or to pay a small claims court judgment instead of lawyers' fees, but it should be budgeted. The type of business that you have and where you are located (Large city attorneys charge more than in suburban or rural areas) determines how much you set aside. A good rule of thumb is 1-1.5% of the retail price or hourly rate that you charge.

Finally, if you develop a relationship with an attorney before you need one, you will have the opportunity to share your business goals, your philosophy, and some company information that will allow them to do a better job for you.

So, when you are faced with a situation that fits the need for an attorney call  Barbara A. Frantz of Alvis Frantz and Associates PLC

(925) 516-1617 email: info@alvisfrantzlaw.com or for more information visit:  http://www.alvisfrantzlaw.com/

Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.