Whether we like it or not, government regulations and policies impact how small businesses operate. These policies are constantly shifting in tandem with the country’s political issues, and it can be difficult for businesses to keep up. Issues arise when businesses fail to recognize the importance of these regulations, resulting in non-compliance and crippling consequences. Here are four policies that manage to slip under the radar time and time again, leaving small businesses in compromising situations:
Businesses are required to have ADA (American Disabilities Act) compliant signage and access to their physical locations. Cashiers, restrooms, and entryways should be accessible to handicapped individuals, or you could have a serious lawsuit on your hands. There have been countless business owners who have gone out of business or lost dozens of thousands of dollars settling for non-compliance. One San Francisco resident made it a habit to tread the Bay Area in search for businesses who weren’t compliant and hit his own personal goldmine. That one handicapped individual alone managed to sued over 30 local businesses. Business owners should read up on compliant signage rules to ensure they’re in good standing.
If your business processes credit card transactions, you absolutely need to be PCI compliant. The self assessment questionnaire required by credit card processes lays out the ground rules and helps you understand the requirements. For example, if you store credit card information in any way to keep your customer’s card on file for future transactions, they need to be stored safely. Keeping them in an open field within your point-of-sale system, on a file on your computer, or anywhere that isn’t safeguarded goes against PCI compliance rules.
Cloud solutions like Payware Connect integrate with POS and use a tokenization process to protect credit card numbers. Fortunately for businesses with limited budgets, Payware Connect pricing is structured with small business owners in mind. There are several best practices for PCI compliance, and properly storing critical data is a major one.
Internships & The Fair Labor Standards Act
Small businesses, especially startups with limited funding, can get substantial help from unpaid interns seeking to learn more about the industry and gain real-world experience. The problem is that there are several legalities when bringing unpaid staff members into the workforce, and you could potentially be facing immense legal complications if you don’t take it seriously. The most important rule for unpaid interns under the Fair Standards Labor Act (FLSA) is that they do not perform the same work as regular employees. There must also be educational aspects incorporated into an internship, and they shouldn’t be used as trial periods for the intern.
If the business does not follow the rules outlined in the FLSA, they could face serious consequences, as demonstrated by a series of national lawsuits. Interns who worked on Fox’s movie, Black Swans, settled a class action lawsuit against the company after performing the the same hard labor work as others working on set. In 2015, Conde Nast also settled a $5.8 million class action lawsuit in favor of interns who worked unfair hours and performed strenuous duties at the company’s high-end magazines. Small businesses are not exempt from these lawsuits. In fact, a lawsuit against a small business could actually result in the company going out of business. Policies and procedures aren’t fun, but it’s better to prepare for the worst situation by adhering to the law.
The FLSA explicitly states that businesses are required to pay overtime wages to any employee who works over 40 hours in a single week and makes under $47,476 — even if they’re salaried. While the Department of Labor aimed to have a positive impact on the work/life balance in America, the rule, which went into effect in December 2016, would grant millions of employees overtime pay, affecting over 30 million small business in the country.
Officials from 21 states have issued a lawsuit against the rule, but in the meantime, there’s no going against it. In 2011, the number of lawsuits against employers for unpaid overtime rose 32%. Therefore, the price of going to court for illegally managing employee hours could be much higher than doing it right the first time. And with the new rule in place, analysts expect an 8% increase in lawsuits this year, compared to last.