3 Questions You Need To Ask Yourself When Employing Your Business

11 February 2019
 Categories: Law, Blog

When it comes to hiring employees for your business, there are a few different things that you must take into consideration before moving forward with this part of the business. To begin, as the owner of the business, you need focus on the hiring, wages, benefits, conflict resolution, and even termination. To help get you started on the right track, here are three questions you will want to ask yourself.

Are You Looking For Employees or Independent Contractors?

If you have never owned a business, you may not realize that there is a different between employees and independent contractors. However, there is a big difference, and if you don't understand the difference, it can get you in trouble when it comes to workers' compensation, insurance, and taxes.

It is very important that you properly classify your workers, or you may find yourself being penalized by the IRS. An employee is someone that has specific job duties, health and unemployment benefits, and even a work contract. An independent contractor will choose his or her hours and has no contract (as a general rule). With independent contractors, you don't have to worry about offering them benefits or withholding federal taxes like you do with employees.

What Should You Put in Your Employment Contracts?

While you may not think that you will get sued by an employee, you never know what circumstances may arise in the future. Therefore, it is important that you take the time to draft extensive employment contracts. These contracts should contain important information that relates to each employee's employment such as compensation, term of employment, benefits, sick days and vacation time, and terminations, in addition to social media policies and dispute resolution. It is also important to address issues that may arise in the event that the employee is terminates like non-compete and nondisclosure.

How Should You Investigate, Discipline, and/or Terminate Employees?

Apart from having employment contracts, you also need to draft employee handbooks that will be given to each employee upon hire. Inside these handbooks, a variety of things should be addressed such as how employees will be investigated, disciplined, and fired. You never know when an employee-employer relationship will turn upside down, but you must plan for it in advance, which can help prevent unnecessary lawsuits.

The aforementioned are just a few questions that should be address prior to getting your business off the ground. For more legal advice, reach out to a business attorney in your area.