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Overlooked Business Laws Your Small Business Needs to Watch Out For

July 11, 2022

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This is a guest post by Claire Fountain, a senior writer and business analyst for Don't Do It Yourself and a Trainual partner helping small businesses find freelancer talent and productivity software.

A lot goes into building your small business, and by the time you open your doors (or launch your website), you’ve already done plenty of research into what applicable laws and regulations you need to create protocols for.

But what many small business owners overlook are laws that are generally (and erroneously) attributed to larger businesses.

Here are some of the more slippery laws that small business owners need to be aware of to ensure their company is compliant.

ADA compliance laws

One of the most commonly overlooked legal regulations for small businesses is ADA compliance.

When many of us think of ADA compliance, the first thing that comes to mind is ramps, accessible parking, and braille on signs. What many online businesses, in particular, fail to recognize is that ADA laws extend to online spaces. And yes, that includes even the smallest and simplest of websites.

To make sure your business’ site is up to snuff, it might be worth investing in a service that can offer site visitors more options for accessibility.

Things like high-contrast text and backgrounds, magnifying features, options for keyboard-only access, and screen reading features are all great ways to make your small online business accessible to all.

Employment laws

A woman in a robe pointing and saying, "I'm gonna go get one of those job things."

If you have any employees working for your company (or hope to one day), you need to be aware of laws that give your employees certain rights and protections.

Aside from just being legally compliant, learning about these employee laws and treating your team well is a good business practice that’ll help you retain loyal (and happy!) staff. Without happy employees, businesses suffer.

The main employment laws that small businesses need to keep in mind can be broken into three larger categories.

1. Anti-Discrimination laws

Legal responsibilities for small businesses and their employees begin during the hiring process.

Title VII of the Civil Rights Act of 1964 lays out requirements for businesses with over 15 employees. Essentially, it states that during the hiring process, employers cannot discriminate based on race, color, religion, sex, or national origin.

This law is in place to mitigate biases that would otherwise impact prejudiced hiring procedures.

Another related law that prevents discrimination in hiring is part of the Americans with Disabilities Act. This portion of the law prohibits employers from discriminating based on the disability status of an employee so long as they can perform necessary job functions with reasonable accommodations.

2. Fair Labor Standards

Applicable to almost all businesses regardless of size, the Fair Labor Standards Act provides minimum requirements for the treatment and pay of employees.

This includes things like the minimum wage requirement per hour (which also varies by state) and the minimum wage for employees that work for tips. (Note: If the employee does not make minimum wage including tips during the workday, the employer must provide up to minimum wage.)

There are also limitations to the types of jobs and hours minors (defined as being under the age of 18) are allowed to work that are pretty extensive.

Some things that are surprisingly not regulated by Federal law (but may still be required by state law) include:

  • Number of hours for employees per day.
  • Number of days per week.
  • Vacation, holiday, severance, or sick pay.
  • Meal or rest periods.
  • Holidays off or premium pay for weekend or holiday work.
  • Pay raises. 
  • A notice, reason for discharge, or immediate payment of final wages to terminated employees.

You also must keep accurate records of employees’ information, which days and how many hours each employee works, wages paid, and pay periods for each employee.

3. Family, medical, and military leave

There are laws that require employers to allow a certain amount of leave for employees who fall ill.

Employers are legally required to allow employees with relevant health complications or certain family circumstances 12 weeks of unpaid leave for things like childbirth, new adoptions, personal health conditions that seriously impact the ability of an employee to work, and caring for a close family member who falls seriously ill.

Businesses are also legally required to provide leave for military deployment, childcare arrangements made due to military deployment, and time off (up to five days) to spend with covered military members on short-term leave during time away from deployment.

Privacy laws and regulations

A girl leaning in and saying, "Could you give us some privacy for, li,

GDPR

The General Data Protection Regulation (GDPR) protects EU residents’ information and data. It went into effect in May 2018.

Though this regulation is intended to protect citizens of EU countries and isn’t technically law in the U.S., it also applies to any businesses that collect data from, or have customer bases in, EU countries. To avoid legal and financial ramifications, it’s important to comply with these regulations.

For U.S. businesses with 250-500 employees, this means providing customers with transparency regarding the collection of user data as well as giving them a say in what’s done with their personal data and information.

If this law applies to your SMB, you must fulfill your company’s duty to protect users/customers’ sensitive information and data as well as manage liabilities that come with any sort of breach in security that results in the misuse of that information.

Businesses with under 250 employees are generally exempt from having to keep a record unless they process data that may jeopardize an individual’s personal rights or freedoms. This includes any information regarding gender, race, sexuality, politics, religion, or philosophical beliefs; union membership; health or genetics; and criminal offenses or convictions.

California Consumer Privacy Act (CCPA)

The California Consumer Privacy Act of 2018 applies to businesses that meet one or more of the following criteria: profits exceeding $25M per year, handles the data of 50K or more consumers per year, or derives at least 50% of its income from selling consumers’ information.

This act requires businesses to inform consumers what data of theirs is being collected and respond to consumers’ requests regarding that information, including requesting deletion of that information or opt-out of sharing.

Email Marketing (CAN-SPAM)

A woman saying, "Today, I got eight e-mails."

No matter how small your business is, if you're using email marketing, you're required by law to be compliant with the CAN-SPAM Act.

The main requirements of this law are:

  • Don’t use deceptive subject lines or false header information.
  • Let recipients know where you’re located.
  • Give the recipient the option to opt out of future communication.
  • Identify the message as an advertisement.
  • Watch what others are doing on your behalf.

Small businesses need to pay close attention to how they conduct email marketing campaigns, as every single email found in violation of this code is subject to a fine (up to $46,517 per email).

Recertification of licenses and permits

Depending on what industry your business is in, there are many licenses and permits that’ll need regular renewal and recertification.

Things like the U.S. Department of Agriculture and U.S. Fish and Wildlife Service certifications, as well as requirements by the Federal Communications Commission, need regular recertification to maintain an active status.

If found not up to date, your business could face significant fines, no matter how small it is.

State business laws and regulations

Finally, it’s important to check in with state and local laws for your business.

Some states require specific licensing for certain industries, and some have incentives or regulations in place for the environmental impact that a company can make. Following your state’s regulations is just as important as following federal law.

Keeping up with the laws and regulations applicable to your business can feel overwhelming, but it’s entirely necessary to avoid costly fines or lawsuits that can derail your business.

Building these legal stipulations into your business playbook and making them part of your internal processes will help you and your team stay on the right side of the law and continue growing without legal setbacks that can derail your progress.

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Claire
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Article

Overlooked Business Laws Your Small Business Needs to Watch Out For

July 11, 2022

Jump to a section
Share it!
Sign up for our newsletter
Read for free. Unsubscribe anytime.

This is a guest post by Claire Fountain, a senior writer and business analyst for Don't Do It Yourself and a Trainual partner helping small businesses find freelancer talent and productivity software.

A lot goes into building your small business, and by the time you open your doors (or launch your website), you’ve already done plenty of research into what applicable laws and regulations you need to create protocols for.

But what many small business owners overlook are laws that are generally (and erroneously) attributed to larger businesses.

Here are some of the more slippery laws that small business owners need to be aware of to ensure their company is compliant.

ADA compliance laws

One of the most commonly overlooked legal regulations for small businesses is ADA compliance.

When many of us think of ADA compliance, the first thing that comes to mind is ramps, accessible parking, and braille on signs. What many online businesses, in particular, fail to recognize is that ADA laws extend to online spaces. And yes, that includes even the smallest and simplest of websites.

To make sure your business’ site is up to snuff, it might be worth investing in a service that can offer site visitors more options for accessibility.

Things like high-contrast text and backgrounds, magnifying features, options for keyboard-only access, and screen reading features are all great ways to make your small online business accessible to all.

Employment laws

A woman in a robe pointing and saying, "I'm gonna go get one of those job things."

If you have any employees working for your company (or hope to one day), you need to be aware of laws that give your employees certain rights and protections.

Aside from just being legally compliant, learning about these employee laws and treating your team well is a good business practice that’ll help you retain loyal (and happy!) staff. Without happy employees, businesses suffer.

The main employment laws that small businesses need to keep in mind can be broken into three larger categories.

1. Anti-Discrimination laws

Legal responsibilities for small businesses and their employees begin during the hiring process.

Title VII of the Civil Rights Act of 1964 lays out requirements for businesses with over 15 employees. Essentially, it states that during the hiring process, employers cannot discriminate based on race, color, religion, sex, or national origin.

This law is in place to mitigate biases that would otherwise impact prejudiced hiring procedures.

Another related law that prevents discrimination in hiring is part of the Americans with Disabilities Act. This portion of the law prohibits employers from discriminating based on the disability status of an employee so long as they can perform necessary job functions with reasonable accommodations.

2. Fair Labor Standards

Applicable to almost all businesses regardless of size, the Fair Labor Standards Act provides minimum requirements for the treatment and pay of employees.

This includes things like the minimum wage requirement per hour (which also varies by state) and the minimum wage for employees that work for tips. (Note: If the employee does not make minimum wage including tips during the workday, the employer must provide up to minimum wage.)

There are also limitations to the types of jobs and hours minors (defined as being under the age of 18) are allowed to work that are pretty extensive.

Some things that are surprisingly not regulated by Federal law (but may still be required by state law) include:

  • Number of hours for employees per day.
  • Number of days per week.
  • Vacation, holiday, severance, or sick pay.
  • Meal or rest periods.
  • Holidays off or premium pay for weekend or holiday work.
  • Pay raises. 
  • A notice, reason for discharge, or immediate payment of final wages to terminated employees.

You also must keep accurate records of employees’ information, which days and how many hours each employee works, wages paid, and pay periods for each employee.

3. Family, medical, and military leave

There are laws that require employers to allow a certain amount of leave for employees who fall ill.

Employers are legally required to allow employees with relevant health complications or certain family circumstances 12 weeks of unpaid leave for things like childbirth, new adoptions, personal health conditions that seriously impact the ability of an employee to work, and caring for a close family member who falls seriously ill.

Businesses are also legally required to provide leave for military deployment, childcare arrangements made due to military deployment, and time off (up to five days) to spend with covered military members on short-term leave during time away from deployment.

Privacy laws and regulations

A girl leaning in and saying, "Could you give us some privacy for, li,

GDPR

The General Data Protection Regulation (GDPR) protects EU residents’ information and data. It went into effect in May 2018.

Though this regulation is intended to protect citizens of EU countries and isn’t technically law in the U.S., it also applies to any businesses that collect data from, or have customer bases in, EU countries. To avoid legal and financial ramifications, it’s important to comply with these regulations.

For U.S. businesses with 250-500 employees, this means providing customers with transparency regarding the collection of user data as well as giving them a say in what’s done with their personal data and information.

If this law applies to your SMB, you must fulfill your company’s duty to protect users/customers’ sensitive information and data as well as manage liabilities that come with any sort of breach in security that results in the misuse of that information.

Businesses with under 250 employees are generally exempt from having to keep a record unless they process data that may jeopardize an individual’s personal rights or freedoms. This includes any information regarding gender, race, sexuality, politics, religion, or philosophical beliefs; union membership; health or genetics; and criminal offenses or convictions.

California Consumer Privacy Act (CCPA)

The California Consumer Privacy Act of 2018 applies to businesses that meet one or more of the following criteria: profits exceeding $25M per year, handles the data of 50K or more consumers per year, or derives at least 50% of its income from selling consumers’ information.

This act requires businesses to inform consumers what data of theirs is being collected and respond to consumers’ requests regarding that information, including requesting deletion of that information or opt-out of sharing.

Email Marketing (CAN-SPAM)

A woman saying, "Today, I got eight e-mails."

No matter how small your business is, if you're using email marketing, you're required by law to be compliant with the CAN-SPAM Act.

The main requirements of this law are:

  • Don’t use deceptive subject lines or false header information.
  • Let recipients know where you’re located.
  • Give the recipient the option to opt out of future communication.
  • Identify the message as an advertisement.
  • Watch what others are doing on your behalf.

Small businesses need to pay close attention to how they conduct email marketing campaigns, as every single email found in violation of this code is subject to a fine (up to $46,517 per email).

Recertification of licenses and permits

Depending on what industry your business is in, there are many licenses and permits that’ll need regular renewal and recertification.

Things like the U.S. Department of Agriculture and U.S. Fish and Wildlife Service certifications, as well as requirements by the Federal Communications Commission, need regular recertification to maintain an active status.

If found not up to date, your business could face significant fines, no matter how small it is.

State business laws and regulations

Finally, it’s important to check in with state and local laws for your business.

Some states require specific licensing for certain industries, and some have incentives or regulations in place for the environmental impact that a company can make. Following your state’s regulations is just as important as following federal law.

Keeping up with the laws and regulations applicable to your business can feel overwhelming, but it’s entirely necessary to avoid costly fines or lawsuits that can derail your business.

Building these legal stipulations into your business playbook and making them part of your internal processes will help you and your team stay on the right side of the law and continue growing without legal setbacks that can derail your progress.

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Overlooked Business Laws Your Small Business Needs to Watch Out For

July 11, 2022

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