As a business owner, you have many responsibilities. From managing employees and finances to overseeing daily operations, there are specific skills and knowledge that owners must have to build a successful business. This includes having a basic understanding of laws that directly impact business operations. The ENLawyers have provided the following information to help small business owners understand some of these intricate laws.
When you own a business, it is important to know the difference between an employee and an independent contractor. While hiring independent contractors can reduce costs, wrongfully classifying an employee as a contractor can have costly legal consequences.
The United States Department of Labor provided guidance in 2015 to help employers properly classify their labor. This guidance specified that an independent contractor is a person who is performing service for the business and is potentially employed in an occupation or other company distinct from your business. Their skills may be specialized, and they are responsible for providing their own resources and equipment necessary to their work. An independent contractor is able to complete work during hours and in locations that suits their needs.
Conversely, employees are individuals who are required to complete work within the business-owned facility, unless otherwise specified. The business provides the equipment or tools necessary to complete work, and maintains control over how and when work is conducted. An employee is paid by the hour, or by a metric determined by the company, and not by the amount of work completed. It is important to know the difference between the two classifications because businesses are required to comply with federal and state wage, hour and insurance requirements.
Similarly, business owners must have an understanding of how to classify exempt and non-exempt employees. Classifying employees as exempt or non-exempt affects their ability to collect overtime compensation in compliance with state and federal wage and hour laws. If you do not compensate employees for overtime hours when they are considered non-exempt, you risk costly litigation and penalties for violating these laws.
Intellectual Property Law
Information and processes that you have used to construct your business may be considered a trade secret, and in turn, may be eligible for protection under United States intellectual property law. Furthermore, it is important that you obtain a trademark for your business name or slogan and that you know how to apply for copyrights and patents if the nature of your business elicits this needf.
Intellectual property plays a vital role in many businesses today. If you produce a product or service, patents, trademarks and copyrights provide the protection that you may need to keep your business growing while preventing copycats or imposters. Additionally, having employees sign confidentiality agreements is an important protection to implement, in the event that they deal with private and valuable information.
ENLawyers Bottom Line
Business owners should have a basic knowledge of employment and intellectual property laws that affect their business. At times, these areas can be overlooked when forming a business, causing costly legal problems at a later time. An experienced business advisory attorney can assist you in structuring procedures, policies and contracts that protect your business.
At the Law Offices of Eldridge and Nachtman, we pride ourselves on the value that we deliver to our small business clients. We provide a variety of business advisory and legal services including, but not limited to, reviewing business plans; drafting and reviewing contracts and legal agreements; and providing legal counsel to businesses. In addition to our vast knowledge of the legal intricacies of owning a business, we have practical experience in business management and operations. We will work with you to ensure that you have the resources and tools necessary to run a successful business. Contact ENLawyers today to schedule a consultation.