Labor Law • Records and Accounting • Taxes
After you move from dreaming about a business to actually planning and building one, there are still many things to be done. You need to find workers; set up a system for record-keeping; figure out which taxes you have to pay; and, even more urgently, which taxes you need to collect. It’s time to start managing.
Things to Consider Before You Hire Staff
Unless you plan to operate as a sole proprietor with no employees, you will need to hire staff. But before you hang a “help wanted” sign in the window or post a notice of positions available online, you should become acquainted with federal and state labor laws and learn how they apply directly to you and your business.
Federal Labor Laws
Employment Eligibility Verification Within three days of being hired, each new employee must complete Form I-9 from the Department of Homeland Security, U.S. Citizenship and Immigration Services, to verify his/her identity and eligibility to work in the United States. Go to www.uscis.gov for a downloadable form, instructions and a list of acceptable documents.
Fair Labor Standards This law applies to nearly all businesses in the U.S. and requires companies to pay at least the federal minimum wage of $7.25 per hour, and overtime pay of not less than one-and-one-half times the regular pay rate after 40 hours of work; restricts employment of children under age 16; and forbids employers from hiring children under age 18 for certain dangerous jobs. Check with the U.S. Department of Labor (www.dol.gov) for more information.
Occupational Safety and Health These laws require businesses to provide a safe workplace and, in many cases, to maintain records of job-related injuries and illnesses. Employers with 10 or fewer employees are exempt from most requirements, as are industries classified as low-hazard. Fines and penalties may be levied for non-compliance. Details are available from the U.S. Department of Labor at www.dol.gov.
The Americans with Disabilities Act prohibits employment discrimination against qualified individuals with disabilities and requires that public accommodations and commercial facilities be designed to comply with specified accessibility standards. All businesses offering access to customers and/or employing 15 or more workers must abide by ADA rules. Visit www.ada.gov for details and to get a copy of the “ADA Guide for Small Businesses.”
Family and Medical Leave Businesses employing 50 or more must give certain employees up to 12 weeks of unpaid, job-protected leave per year while preserving their health benefits during the period. Employees may take leave for the birth of a child; if they adopt a child or provide foster care; to care for a seriously ill spouse, child or parent; or if they personally suffer a serious health condition.
The U.S. Equal Employment Opportunity Commission enforces federal employment discrimination laws that protect civil rights and prohibit age discrimination.
Equal Pay This law applies to virtually all employers and prohibits wage discrimination between men and women performing substantially equal work within the same workplace.
Health Insurance Although the Affordable Care Act does not require businesses to provide health insurance, it does offer tax credits for eligible small businesses that choose to do so for the first time, or maintain the coverage they already have. Learn how this law affects your business and the qualifications for a small business health care credit at www.healthcare.gov or www.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-for-Small-Employers.