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How to prevent wage and hour lawssuits

As a small business owner, you need as many things as possible to go your way in order to be as successful and profitable as possible. One area you should not overlook is your legal protection. If employees bring wage and hour complaints against you, it can slow down your business. 

Even baseless allegations can take time and funds away from growing your business. Here are some tips for preventing wage and hour complaints from becoming a problem.  

Maintain detailed and accurate records

The best way to stop problems from happening and disprove false allegations is by keeping proper paperwork. Maintain records regarding worker names, workweeks, pay rates, hours worked and overtime hours. This is in addition to payroll records. There are plenty of time and attendance tools you can utilize to help you and your workers verify this information. If you do not have substantial records, a worker may have an easier time succeeding with a baseless claim. 

Properly classify your workers

Misclassification lawsuits can significantly impact your business. Avoid misclassifying any of your workers as independent contractors. You may assume you can get away with it to avoid labor and employment laws, but it will only come back to haunt you. If your company has control over what the worker does, provides supplies and tools for the job and oversees payment, you generally must classify this worker as an employee.  

Issue payments promptly and accurately

Payroll errors can lead to big problems. It is sometimes easy to be late and make mistakes due to cash flow problems and taxes. But you must make sure you pay wages once they are due. Additionally, do not underpay your employees in any way. This includes withholding overtime pay with a promise to make it up during the next pay period. 

The best way to deal with legal problems is by preventing them from occurring in the first place.

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