Warning About Labor Issues

Labor issues are hazardous for small business. Be careful.

These are some common issues to watch:

  1. The "Employer" is you the person, not your business(es). It does not make any difference if you put the other business(es) in your spouse's or child(ren)'s name. EXAMPLE: If you own two or more corporations and one employee worked 20 hours at one and 25 hours at another, that employee worked 45 hours for you and you must pay overtime.--Publication 1318, "Definitions"

  2. "Deductions made from wages for such items as cash or merchandise shortage, employer-required uniforms, and tools that that reduce the wages of employees below the minimum rate required by FLSA [Federal Labor Standards Act]."--Publication 1282 "Basic Wage Standards"

  3. Notice that you can withhold for cash shortages; just be careful of the amount for close-to-minimum-wage employees.

  4. There is a reduced minimum wage for students, but look into it further if you consider it. The student must be under 20 and the reduced rate is good for only 90 days. There are special rules for different age groups.

  5. When an employee drives from one of your locations to another in the same day, you must pay the employee for that time.--Publication 1312, Section 785.38

  6. The Family and Medical Leave Act does not apply to employers who have not employed 50 or more employees for at least 20 weeks this year or last year.--Publication 1421 Remember to count all employees of your several businesses.

  7. Find more information at http://www.dol.gov.

  8. Beating Overtime Expense

  9. You can also contact the U.S. Department of Labor (504) 589-6171 with questions.