In September of 2012, it was estimated that there were 27.9 million small businesses in the United States. If you are one of these millions of business owners, you likely have quite a few responsibilities on your shoulders.
Not only do you have to make sure your business runs smoothly and that you earn a profit, but you also have to make sure you don’t break any laws.
The good news there are some laws that are clear, such as not selling lottery tickets or alcohol to individuals under a certain age. In fact, there are even certain tools, such as the one seen at MinorDecliner.com, to help with this.
Unfortunately, there are other laws that may not be as clear. In fact, there are some common laws that many business owners unknowingly break. Breaking these laws can be devastating to small businesses, so it’s best you learn what they are, so you can avoid breaking them.
Here, you can learn about some of the most common laws that businesses unknowingly break.
- Mistakenly Selling a Product That’s been Recalled
If you want to avoid this high-liability scenario, it’s a good idea to check on the Consumer Product Safety Commission’s website. Here you can find an updated list of products that have been recalled.
The frequency at which you should check it depends on the type of product you offer. For example, if you sell items for babies or children, you may need to check the list more often than companies that sell other products.
- Not Classifying Employees Properly
If you misclassify your employees, then you are at risk of being taken to court. If you improperly classify your employees as an independent contractor, you may be reprimanded by the Department of Labor for non-compliance.
According to the DOL, employers that have assent, control and benefit over their workers must classify these employees as a W-2 worker. Some businesses try to avoid this requirement by hiring a large number of independent contractors. If you do this, you are at risk of having to pay large penalties and you may face significant tax consequences.
- Not Properly Marking Patented Products
This is a way to ensure that other companies in your network don’t break the law and it is a way to protect your intellectual assets. If you hold a patent and want to assert your patent rights against a third party or want recourse for any willful damages if infringement occurs, you need to mark your items with a patent number. At the very least, you need to ensure you indicate you are currently undergoing the patent process.
- Not Charging, Collecting or Reporting Sales Tax
In the past, this has been a huge issue for the convenience store industry, where the underreporting of sales was an all-too-common business practice. This is also present in other industries, for example, landscaping, where no sales tax is charged. This is done by many smaller companies who want to try and leverage a cost advantage when they are pricing the services offered. Even though this can help them save about eight percent on their price structure, it may cost thousands of dollars more in litigation.
If you want to avoid breaking the law, then you have to know some of the most common laws that are broken by businesses. Being informed and aware of the laws that are often broken, will help you keep your business safe from penalties, fines and other, more severe consequences.