7 Ways Employment Law Impacts Businesses

Employment law can be a complex and confusing subject for small business owners in Michigan. It is essential for small business owners to understand how employment laws impact their business and their employees, as noncompliance can lead to costly legal disputes and financial penalties. Today, we'll cover some of the key employment laws that small businesses need to be aware of and how they can protect themselves and their employees and effectively manage risk within their organizations

One of the most fundamental employment laws that small businesses need to be aware of is the minimum wage. The federal minimum wage is currently $7.25 per hour, but many states have their own minimum wage laws that may be higher. Michigan's minimum wage, beginning in 2022, will be $10.10/hour. 

It is the employer's responsibility to ensure that all employees are paid at least the minimum wage for all hours worked. In addition to minimum wage laws, small businesses must also comply with overtime laws. Non-exempt employees who work more than 40 hours in a workweek are entitled to overtime pay, which is time and a half their regular hourly wage. It is important for small businesses to accurately track their employees' hours and pay them correctly to avoid potential legal disputes.

Small businesses are also subject to equal employment opportunity laws, which prohibit discrimination on the basis of race, color, religion, national origin, sex, age, and disability. This means that small businesses cannot discriminate against employees or job applicants based on these characteristics and must make reasonable accommodations for employees with disabilities.

The Family and Medical Leave Act (FMLA) is a federal law that requires covered employers to provide employees with up to 12 weeks of unpaid, job-protected leave for certain family and medical reasons. These reasons include the birth or adoption of a child, the care of a family member with a serious health condition, or the employee's own serious health condition. Small businesses with 50 or more employees are required to comply with the FMLA.

Small businesses must also comply with a variety of health and safety laws to ensure the safety and well-being of their employees. This includes providing a safe and healthy work environment, training employees on safety procedures, and promptly addressing any safety concerns.

Employee benefits laws outline the types of benefits that employers must provide to their employees. These may include vacation and sick leave, health insurance, and retirement plans. Small businesses are not required to offer these benefits, but if they do, they must follow the relevant laws and regulations.

Small businesses should also consider having written employment contracts and policies in place. Employment contracts outline the terms and conditions of employment, including the duties and responsibilities of the employee and the employer. Policies, such as a handbook, outline the rules and expectations for employees and can help to prevent misunderstandings and disputes.

Finally, small businesses need to be aware of their obligations when it comes to terminating employees and providing severance. In most cases, employees are considered "at-will," which means that they can be terminated at any time, for any reason (with some exceptions). However, small businesses must still follow the law when it comes to termination and must not discriminate or retaliate against employees. If an employee is terminated, the employer may also be required to provide severance pay or benefits, depending on the terms of the employment contract or company policies.

Small businesses face a variety of employment law requirements that can be complex and confusing. If you want to truly achieve compliance piece-of-mind, consider partnering with a full-service HR provider like Axios HR. Our goal is to help growing businesses make their HR more efficient so businesses can focus on attracting and retaining the best employees in their industry. 

Our team is filled with compliance experts who can guide you through employment law issues every step of the way, as well as manage benefits administration, payroll, and general HR. All for a single, consolidated cost!

If you're interested in how Axios HR can help elevate your HR function, check out feel free to explore the site, or give us a call at 844.44.AXIOS.