Running a small business is full of fresh challenges every day, some of which you don’t even see coming. Whether it’s financial, managerial, or some new surprise that comes from an unforeseen corner of the business world, it seems that entrepreneurs can never know enough things to prepare themselves in advance. Of course, one of the trickiest aspects of a business to manage is all of the laws and regulations.

Some countries have laws meant to protect employees from unfair labor practices. In the United States, there are laws around what a fair minimum wage is on a federal level, as well as on a state level. Because of this, it’s crucial that employers know what all of the major labor laws are in both the country they work in and the state.

It’s important to note that running a fair business, while simply a good thing to do in general, is also the best way to protect yourself as a business owner. You should know the laws, regulations, and tax requirements for your business based on the type of business it is, where it is, and how many employees you have. Otherwise, you could run the risk of getting sued or audited, both of which are an expensive and shameful endeavor for anyone to overcome.

What You Need To Know: Overtime Laws

Every business owner knows that some weeks you have to work more than the 40 hours you may have planned for. It’s okay to enlist some employees to help you during these busy times, but it’s crucial they are compensated fairly for those extra hours. This compensation, called overtime, is established under the Fair Labor Standards Act of 1938, which lays out the standards that employers are held to when it comes to overtime.

If a single employee works any amount over 40 hours in one work week, they must be compensated for that time at overtime pay. Overtime pay is generally one and one-half times their hourly wage. There is no limit to the number of overtime hours an employee may work in a week provided they are being compensated fairly and their health and wellness are not placed at risk.

Now, not every employee in your business will be entitled to overtime pay — there are some exemptions. The exemptions can be broken into several categories, like executive employees, or people who work in outside sales. However, the uniting element of each exempt employee is that they are compensated at a minimum of $455 a week on a basis of fee or salary.

What You Need to Know: Discrimination Laws

The United States Equal Employment Opportunity Commission prohibits the discrimination of employment based on age, sex, race, religion, or ability. Essentially, this means that no one is allowed to refuse to hire someone on the basis of extraneous characteristics that don’t immediately pertain to the job. This also pertains to people who live with certain disabilities.

As an employer, it’s crucial that you understand the laws surrounding hiring practices in the United States and what you are required to submit when defending your choice to hire or not hire an employee. Additionally, you should understand your responsibilities in protecting someone on your staff from being discriminated against in the workplace after hiring. While you as the business owner may not discriminate against an employee, you have to be sure you have protocols in place to protect employees from discriminating against one another.

This is because the US EEOC also protects against harassment in the workplace based on race, sex, or religion. You will need your employees to understand that they can come directly to you with complaints of any harassment and that they will be safe in doing so. Otherwise, you could be sued as being directly responsible for someone’s harassment at work.

How These Laws Affect Your Small Business

Once you understand the different rules and regulations governing your business by state and federal law, you will want to understand how they affect you. First, you should look at the broad stroke consequences. Essentially, if you don’t follow the law, you will either be audited or sued.

For example, if you don’t do your accounting correctly — paying overtime and logging it appropriately — then you run the risk of being audited by the government when you do your taxes.

If you don’t properly protect your employees from harassment, then you could be sued as not creating a safe and stable work environment. Both of these consequences are costly to your business financially, as well as to your reputation.

When it comes down to it, you should remember that you got into business because you wanted to create a good product or a good experience for other people. That desire to do good shouldn’t only extend to your customers, it should extend to your employees as well. Do the best you can for the world around you, and you won’t have to worry about paying any fines.