Running a business can be complicated and time-consuming, but it’s important to make sure that you’re not breaking any laws in the process.
Even if you hold extensive financial, operational, and marketing knowledge, legal know-how isn’t something you miraculously acquire. It takes years of specialized training to gain comprehensive knowledge about the law.
This is why it’s essential to have a lawyer on your team, or at the very least, consult with one regularly, to make sure that your business practices are in line with the law.
That said, here are some ways your business may unknowingly be breaking the law.
Independent Contractor’s Classification
Small businesses often rely on independent contractors to help with various tasks, from marketing to accounting. While this can save you money on labor costs, you need to be mindful of how you classify these workers.
Some businesses unknowingly make requirements for independent contractors that only an employee can fulfill, such as setting hours they must work or dictating how they complete their tasks. If an independent contractor is treated as an employee in any way, the business could be held liable for breaking labor laws.
As employees are entitled to certain benefits that contractors aren’t, such as vacation pay, healthcare and overtime compensation, this can be seen as an unfair advantage.
To avoid any legal trouble, ensure that workers in your company are correctly assigned duties befitting their title. You could end up owing employees a lot of money in back pay and benefits if this rule isn’t duly followed.
Ex-felon Discrimination
Discrimination in all its forms is strictly prohibited, and that includes discrimination against people with a criminal past. This means that you can’t refuse to hire someone just for having a felony record.
For example, this has been a part of Australian law for over 30 years. If a person is otherwise capable of performing the tasks necessary for the job, they should be evaluated based on their competence, not their criminal history.
The only exception to this rule is if the position in question would put the public at risk if someone with a criminal background were to take over. For example, jobs that involve working with children or handling large sums of money.
If your business’s basis for not hiring a qualified person is solely on their criminal record, you could be breaking anti-discrimination laws. If you’re not sure whether or not your hiring policy is breaking the law, you can consult with an attorney here.
Unpaid Internships
Continuing with a focus on Australia as an example, unpaid internships can be legal if the following conditions are met:
- the person isn’t entitled to receive remuneration
- the position is required for training or education
- the course must be approved by the Australian state or local legislature
If an internship isn’t part of an educational course, or the intern is promised a wage after their training which hasn’t been fulfilled, the business could be in violation of Australian labor laws.
Also, internships should be clearly distinguished from employment, otherwise, they’d be subject to minimum wage rules. Typically, the length of time and primary function of the intern’s role are key indicators of whether they’re classified as an employee or an intern.
In some cases, pro bono or volunteer work for the purpose of skill attainment is legal. One example is community legal centers offering unpaid internship opportunities for prospective law students to enhance their skills.
Overselling Business Abilities
Federal, state and local governments in Australia are some of the largest contractors nationwide, providing thousands of contracts to businesses every year.
To be in contention for one of these contracts, your business must edge out against the competition in one way or another. One way businesses try to increase their chances of being awarded a contract is by overselling their qualifications.
For example, a business might say they can supply X amount of cement in three weeks, whereas they know they’re unable to fulfill that in a month. Or they might tell the government they can lay X amount of cable per kilometer to beat out the competition when this doesn’t reflect reality.
Unlike in private companies where this is merely unethical, overselling your business’s qualifications to get a government contract is illegal. If you’re caught doing this, your company could be prosecuted.
Public Patents
Protecting your intellectual assets is essential for any respectable business. By doing this, you maintain control over how your products or services are used, preventing others from unfairly profiting from your hard work.
Aside from being a sound business practice, failing to adequately publicize your patent can lead other businesses to hot water. You’d have grounds to sue them for copyright infringement. However, if you don’t make it clear that your patent exists, they could argue that you have failed to perform your due diligence of putting your patents in the public domain.
To prevent this scuffle altogether, it’s advisable to publicize your patents as soon as you receive them. This could be done through various channels, such as on your company website.
