Small Business Toolbox

A library of business management info


Legal Links From the NFIB Small Business Legal Center

SBLCLOGO180.jpgLearn about many legal topics in this series of columns developed by the NFIB Small Business Legal Center. Of course, check with your own attorney before acting.

  • Preventing Violence with Workplace Weapons Policies
    01/18/2008
    Most employers are committed to providing a safe and healthy work environment for their employees. In keeping with the spirit and intent of this goal, many employers prohibit anyone—employees, contractors, vendors and visitors—from bringing firearms or other weapons onto company premises. The reason for these bans? Workplace safety and liability. If an employee is threatened or assaulted on the job, liability for injuries could fall on the employer. In fact, some insurance companies require workplace weapons policies before issuing coverage for employment claims.
  • New Form I-9 in Effect Dec. 26, 2007
    12/21/2007
    The U.S. Citizenship and Immigration Services issued a new Form I-9 to verify employees' eligibility for employment. Employers must begin using the new form by Dec. 26. Previous versions of Form I-9, in English or Spanish, are no longer valid after Dec. 26, 2007. Employers who are still using the old forms after this date will be subject to applicable penalties and fines.
  • New Form I-9 Reduces Documentation Required for Employment Eligibility
    11/26/2007
    On Nov. 7, 2007, the U.S. Citizenship and Immigration Services issued a new Form I-9—the document all employers must complete to verify employees' employment eligibility. Employers should download the new form, note the form's changes (also discussed below) and begin using the new form immediately.
  • Show of Support
    11/09/2007
    November 11 took on storied meaning when the armistice ending World War I went into effect on the 11th hour of the 11th day of the 11th month of 1918. In the words of President Wilson, November 11 has since been a day to reflect "with solemn pride on the heroism of those who died in the country's service and with gratitude for the victory, both because of the thing from which it has freed us and because of the opportunity it has given America to show her sympathy with peace and justice in the councils of nations …"
  • NFIB Legal Foundation Offers Useful Legal Guides for Members
    10/26/2007
    With more than 75,000 pages of rules to keep track of, it's not surprising that many small-business owners don't know or understand the laws that apply to them. In its role as educator, the NFIB Legal Foundation continues to develop useful legal guides to help small-business owners navigate the increasingly complicated maze of federal laws and regulations. Additional information on the legal guides is found below; each of these guides is available as a benefit of membership for NFIB members.
  • Promoting a Drug-Free Workplace
    10/19/2007
    National Drug-Free Work Week 2007 was held Oct. 14-20, and employers and workers across the nation were encouraged to participate. The purpose of Drug-Free Work Week is to highlight the fact that being drug free is key to protecting workplace safety and encouraging workers with alcohol and drug problems to seek help.
  • LLC: The Right Entity for Your Business?
    09/21/2007
    Choosing a legal business entity is one of the most important decisions a small-business owner will have to make. The ability to easily form a business in a way that shields personal assets while reducing the tax burden is an important, evolving area of law. A limited liability company (LLC) provides many small-business owners with the flexibility and personal asset protection they need to focus on what they do best-- providing their employees with rewarding jobs and their customers with the highest quality products and services.
  • New Immigration Rules Announced
    08/13/2007
    Tough new rules announced on Aug. 10 by the U.S. Department of Homeland Security will give employers 30 days to respond to a notice of a discrepancy regarding an employee's legal working status, or "no-match letter." The new rules are an attempt to crack down on businesses that employ undocumented workers. Penalties for failure to comply with the new rules are stiff -- up to $10,000 per violation.
  • How to Survive a Labor Union Organizing Campaign
    08/10/2007
    A labor union organizing campaign can mean a lot of stress and headaches for small-business owners. Owners, managers and supervisors are all under special obligations not to unduly interfere with an organizing effort. Failure to follow these rules could mean legal trouble with the National Labor Relations Board. Faced with these restrictions, it might seem like there's little you can do to fight a campaign. Not so. Employers can communicate to their employees the disadvantages of union membership, including the financial costs and potential for work-related loss from strikes or picket lines.
  • Small Business at the Court: A Review of the 2006-2007 Supreme Court Term
    07/20/2007
    The Supreme Court concluded its 2006-2007 term on a divisive note with a number of 5-4 decisions on issues related to free speech, abortion and affirmative action. Less polarizing for the justices was many of the Court's rulings on business issues. The Court upheld important restrictions on employment discrimination claims, punitive damages and union dues. Its rulings in the business arena represented important wins for NFIB, which offered support in three critical cases.
  • Finding the Best Summer Help
    06/15/2007
    Almost every industry has peak periods when some extra help around the office would be welcome. Fortunately, if that time of year is during the summer months, you may be able to forge a mutually beneficial relationship with some temporary help through either summer interns or teenage employees.
  • ADA Tax Breaks Help Small Businesses Stay Accessible
    05/18/2007
    You may have heard about the Americans With Disabilities Act and wondered how it might affect your business. Perhaps you've heard about predatory plaintiffs using the ADA to extort small businesses in "drive-by" lawsuits. Even if you haven't heard of the ADA, the reality is that you have obligations to make your small business accessible for the disabled. Instead of waiting for a lawsuit to hit you, why not take care of some accessibility issues ahead of time? Fortunately, Uncle Sam offers a variety of incentives to help you become ADA compliant, taking a proactive approach that won't break the bank.
  • Protecting Employees' Social Security Numbers
    04/20/2007
    Identity theft is an ever-present danger to Americans across the country, since we all live in an increasingly digital world. This nightmare scenario requires, at the least, canceling accounts and repairing credit reports. Common sense counsels you to protect yourself by shredding bills and other documents before you throw anything away, but if you're a small-business owner, you must be equally as careful with employees' confidential information. Your employees' Social Security numbers are the penultimate example of information that must be kept under lock and key.
  • Medical Leave: Reconciling FMLA Leave With the ADA
    03/15/2007
    Many small-business owners have less than 50 employees, and therefore, are not subject to the federal Family Medical Leave Act. Nevertheless, there may be other laws besides the FMLA to be considered, such as the Americans with Disabilities Act, before deciding to grant or deny requests for medical leave. To better understand the nuts and bolts of federal law, employers must break down the demands that arise from the intersection of the FMLA and the ADA, since both require a covered employee to be granted medical leave in certain circumstances.
  • Pre-Employment Tests
    02/15/2007
    Many employers use pre-employment tests to weed out unsuitable applicants. These tests may include skills tests, aptitude tests, psychological tests, personality tests, honesty tests, medical tests and drug tests. Both state and federal law impose numerous restrictions on what sort of testing is permitted. These restrictions are often vague and open to contradictory interpretations. As a result, you should only use tests that are absolutely necessary and, unless the test is as basic as a typing test, you should consider consulting with a lawyer before administering it.
  • Employee Rest Breaks: What's Required?
    01/19/2007
    It may come as a surprise, but the federal government does not have a law requiring business owners to give adult employees either rest periods or meal breaks during the workday. In fact, only 19 states specifically require rest or meal breaks for adults, while only seven states specifically require adult employees to be allowed a rest break and a meal break.
  • Providing References for Former Employees, Both Friends and Foes
    12/15/2006
    Employers today find themselves in the position of saying too little for fear of saying too much when it comes to providing references for former employees. Should you tell the truth and nothing but the truth whether good, bad or neutral? It may be surprising, but there is no right answer. As a former employer, you can generally say as much or as little as you like, as long as you do not knowingly provide false information. By definition, a reference allows you to disclose a significant amount of information about a former employee--but as with any business dealing, it pays to think before you speak.
  • Gift Cards and Gift Certificates: Watch the Fine Print
    12/11/2006
    One of the hottest trends this holiday season is the sale of gift cards and gift certificates. Gift cards are prepaid cards containing a specific amount of future purchasing value, designed to be bought by one consumer (purchaser) and presented as a gift to a second consumer (recipient). Gift certificates are, similarly, prepaid certificates that entitle the owner to a specific amount of purchasing value. Rather than making an agonizing selection, consumers enjoy the convenience of buying an item someone else can use to obtain exactly what he or she wants. Generally, the laws regarding gift cards and gift certificates are essentially the same. However, there are a few things small businesses need to consider before offering these choice items to their holiday shoppers.
  • Don't Delete Yet––New Federal Court Rules Require E-mail and Electronic Document Retention
    12/08/2006
    Under new federal court rules that went into effect on December 1, businesses should ensure that they have policies in place to manage and maintain electronic documents and information, including e-mail communications. The reason: Court rules now require that businesses provide plaintiffs access to electronic documents that might be used in litigation even before a request for the documents has been made.
  • Ensuring Safe Holiday Office Cheer
    12/06/2006
    As the year draws to a close, and the holiday season fast approaches, employers can chase away any holiday fears and ensure a business full of happy holiday cheer by avoiding a few common legal pitfalls. By taking some simple precautions, employers can ring in the New Year without worrying about any post-holiday headaches (or lawsuits).
  • E-mail Use and Abuse
    11/17/2006
    Communication in the workplace has changed dramatically in the past 10 years. Electronic communications like e-mail now exceed traditional communication media, such as phones, memos and meetings. While electronic communication provides many benefits, it has brought many headaches to business owners and managers. But protections are available for companies.
  • Time Off to Vote
    11/01/2006
    As good employers, you want your employees to be active in the community, and part of that activism involves voting. Activating employees as members of the small-business community can mean taking simple steps like making sure they are all registered to vote, encouraging them to vote and ensuring that they understand which candidates support your business and industry.
  • Pre-paid Legal Plans: Worth the Cost?
    10/20/2006
    Are you unsure whether you can fire an employee? Unclear about what details to include in a contract with a business partner? Business owners contemplate these legal questions routinely, yet often businesses shun legal consultation to avoid high legal costs. Small businesses wary of the cost of an attorney might want to consider enrolling in a pre-paid legal plan to handle their legal issues.
  • So You've Been Sued––What Now?
    09/15/2006
    Someone enters your business, asks for you and hands you a sealed envelope stating, "You are served." Unfortunately, lawsuits are a part of doing business. After being served with a lawsuit, what should a small-business owner do? Don't panic. There are several acts that can bring advantageous results in responding to a lawsuit.
  • Dressing Employees for Success: Implementing a Non-Discriminatory Dress Code
    09/08/2006
    An employee's appearance can often make or break a customer decision. You naturally want to create appearances that shine a positive light on your business. But what about your employees' rights? Can an employee drag you into court for making her cover up a tattoo? Or, what about beards and body piercings? To establish a dress code that steers clear of discrimination remember three things: Be reasonable, communicate openly and think about your bottom line.
  • English-Only Workplace Policies: Tread Cautiously to Avoid Discrimination
    07/21/2006
    Although English has long-held supremacy in our national conscious, the truth is at this time there is no official language of the United States. So you may be in for a rude awakening in the form of a civil-rights lawsuit if you have an English-only workplace. On the flip side, with a little understanding and some planning, you might find that an English-only policy is acceptable for your business.
  • Credit-Card Fraud: Five Steps to Protect Your Business
    06/16/2006
    The media, consumer groups and even banks offer a wealth of information about how individuals can protect themselves from fraud. But how can business owners guard themselves against credit card thieves who place orders over the internet or by phone?
  • Do You Need an Employee Handbook?
    05/19/2006
    Are you unsure about how to handle problem employees? Have you written more than one internal policy memo this past year? Do your employees constantly ask about sick leave, dress codes or promotions? If you answer yes to any of these questions, it may be time to create an employee handbook.
  • Overtime: Who Gets It?
    04/21/2006
    It’s been more than a year since the U.S. Department of Labor announced major revisions to the Fair Labor Standards Act (FLSA). The changes aimed to clarify which employees qualify for overtime pay as well as update dated terminology and job descriptions. Even with the new regulations, there is no denying that confusion still exists amongst employers and employees. And as employees’ job responsibilities are often subject to change, it’s a good idea to periodically review their job descriptions, and make sure that they are appropriately classified under the FLSA.
  • 10 Reasons to Implement a Drug-Free Workplace Policy
    03/17/2006
    Most drug users are employed, and when they arrive for work, they don’t leave their problems at the door. Some costs—increased absences, accidents and errors—are obvious. Others, such as low morale and high illness rates, are less so, but their effects may be equally harmful.
  • When Disaster Strikes: Navigating the Claims Process
    02/17/2006
    Hurricane Katrina is on track to be the most costly natural catastrophe in U.S. history. Estimates of insured losses range from $9 billion to $26 billion. When a disaster strikes your city, you will at first be overwhelmed with concern about the welfare of your family, the future of your business and the seemingly mounting debt. Inevitably, however, the devastation caused by a disaster like Hurricane Katrina will raise a number of insurance coverage issues that you will need to address. Consider the following when it comes time to file and resolve your claim:
  • USERRA: New Rules Protect Military Service Members
    01/06/2006
    The U.S. Department of Labor has announced new regulations under the Uniformed Services Employment and Reemployment Rights Act of 1994, the federal law that governs military service members' workplace rights. The new regulations are intended to protect the rights of those who leave their civilian jobs voluntarily or involuntarily to serve in the military, including the military reserves and the National Guard.
  • Beware of the Office Holiday Party: Tips for Guarding Against Harassment and Other Hanky Panky
    12/16/2005
    It’s that time of year when alcohol, mistletoe and holiday cheer combine to create a legal minefield for employers. Too often the holiday office party becomes a breeding ground for sexual harassment claims. You can, however, protect your employees and your organization from legal turmoil by taking practicable steps to prevent harassment from occurring within your business and at the office holiday party.
  • Performance Reviews: Tips for Effective Appraisals
    11/18/2005
    Performance reviews often seem like a mandatory exercise that provides little value to the employee or employer. However, a well-conducted performance review benefits both by improving communications and the employee’s effectiveness. If you need to fire an employee, performance reviews can provide important protection if the employee challenges the termination.
  • Don't Fax So Fast: Complying With the Junk Fax Prevention Act
    09/28/2005
    Consumers rushed to embrace the Federal Trade Commission’s "do-not-call" list, but the Federal Communications Commission’s "do-not-fax" rule did not receive the same reception. After receiving over 500 complaints from the business community the FCC delayed implementation of the rule earlier this year and in July 2005 Congress pulled the plug on the rule when they passed the Junk Fax Prevention Act. The act does not leave businesses tired of junk faxes without any recourse, however, and businesses that use faxes to communicate with customers ought to be aware of the act’s new requirements.
  • Insurance 101
    09/16/2005
    The word “insurance” often makes business owners cringe and, for good reason, insurance can be confusing and expensive. When starting a business it is difficult to know what type and how much insurance you need. The financial status and size of a business often dictates what type and amount of insurance a business needs. But different businesses have different insurance needs.
  • Small Claims Court: FAQ
    08/19/2005
    Your customer refuses to pay. A supplier delivers substandard products. Someone broke or damaged your property. Are you out of luck? Maybe not. Relief might be available in small claims courts, which were established in many states to handle these sorts of disputes.
  • Understanding FMLA Requirements
    07/15/2005
    Many employers are required by federal law to allow their employees 12 weeks of unpaid leave under the Family and Medical Leave Act. Although the FMLA has now been in effect for almost 12 years, many questions and legal disputes still arise over the FMLA's requirements. It's a good idea to make sure your company’s policy complies with the law’s technical requirements.
  • Terminating Employment: Six Steps to Help in the Process
    06/17/2005
    The decision to terminate an employee is never easy and is usually a last-resort measure. But unfortunately, termination may be inevitable. To avoid legal problems down the road, you should establish a set approach to employee management that includes procedures for firing an employee. The following six steps can help you effectively handle terminations.
  • Performance Problems: Don't Let an Employee's Poor Performance Affect Your Business' Performance
    05/20/2005
    Most employers recognize that on occasion the work performance of some employees falls below the acceptable level that they've come to expect. As an employer it's important for you to take action when you notice than an employee's performance has deteriorated.
  • Complying With the Americans with Disabilities Act Accessibility Guidelines
    04/15/2005
    But what if your business is a liability, a lawsuit waiting to happen? Well, that's exactly what it could be if your are not in compliance with the public accommodation requirements of the ADA. It is therefore worth some time to make sure your business is not an ADA liability.
  • Age Discrimination Lawsuits
    04/08/2005
    Last week the Supreme Court issued an important decision regarding the Age Discrimination in Employment Act of 1967. In Smith v. City of Jackson, Miss., the Court ruled that persons who sue for age discrimination do not need to prove that an employer intentionally discriminated based on age.
  • Document Retention Policies
    03/18/2005
    Have you ever wondered how long you should keep a contract, banking statements and employee records? Or are you keeping every single bill, tax return, insurance invoice and even the parking ticket that you received 10 years ago? If you answered "yes," you are not alone. Many business owners are unsure as to how long they should retain business documents and records.
  • Hiring a Lawyer: Remember to Do Your Homework
    02/18/2005
    Although no one likes to think about it, in the course of your business, there probably will come a time when you will need the assistance of a lawyer. Whether it is for a complex contract or a real estate deal, hiring a lawyer can be a complicated process that leads to many questions.
  • What Not to Ask and Other Tips for Conducting an Effective Interview
    12/17/2004
    Conducting an effective interview could be the most important step you take when it comes to picking the best applicant. In order to make an informed decision about a candidate's qualifications for a job, it is important to gather as much information as possible during an interview. However, you want to make sure that you do not ask inappropriate questions that could be the basis for an employment discrimination complaint.
  • Is Your Business Prepared for New Consumer Protection Requirements?
    11/19/2004
    Does your business print credit or debit card receipts for your customers? Starting in January, a federal consumer protection law changes the way you do business.
  • Federal Labor and Employment Laws – A Summary of the Basics
    10/15/2004
    There is a wide range of federal labor and employment laws that might affect your business and your relationship with your employees. Below is a brief summary of the most significant federal labor and employment laws for which employers are most frequently named in lawsuits.
  • Is Your Business Ready for the New FLSA Overtime Rules?
    08/31/2004
    Steps you should take to ensure your business is in compliance with the new regulations.