Surprising Ways Business Owners Break the Law

Picture: unsplash Adeolu Eletu

Most business owners never set out to break the law, especially when they pride themselves on their ethics and morals. However, through a lack of knowledge or misinformation, it can sometimes be much easier than you think to be on the wrong side of the law without even realizing it. Out of curiosity or to ensure you’re not doing anything that might be considered illegal, take note of the following common mistakes business owners make.

Not Complying With Federal Hour and Wage Laws

Talk to New York lawyers specializing in employment and business law, and they’ll likely say they’ve worked with several business owners who haven’t been complying with federal wage and hour laws. It’s easy to make several mistakes, such as not paying overtime because your employee is on a salary, only to learn their duties makes them non-exempt. You might even break the law by hiring employees without tax ID numbers or valid Social Security numbers.

If you don’t believe you’re aware of all your legal obligations as a business owner with staff, now might be the right time to consult expert business lawyers for help. The more you learn, the easier it might be to stay on the right side of the law.

Spending Investor Funds Improperly

Many investors believe so fiercely in the potential of businesses that they’re willing to put their hard-earned money into it to help them get established. They might expect that money to be used on company expenditure to ensure stability and growth in the future. Some business owners can think they have the freedom to spend that money on whatever they please, including personal purchases. While you might own the business, investors typically have a small amount of control over where their money goes.

Accidentally Destroying Documents That Can Be Used As Evidence

If your business is embroiled in a legal case in which someone is accusing you of doing something you shouldn’t be, you might be required to provide anything that might be classed as relevant evidence, such as physical and digital documents, emails, and even text messages.

If you don’t have a documentation policy in place, there’s a genuine risk that valuable evidence that could prove vital in your case might be destroyed. As soon as your business becomes involved in any litigation, advise your staff about the importance of halting file deletion until you’ve given approval.

Selling Recalled Products

When you stock thousands of products across your retail store, keeping on top of recalls can be challenging. You certainly don’t want your customers to be hurt, but that can sometimes be the reality if you aren’t actively checking for recalled products.

While suppliers typically send emails out to businesses to let them know a product they’ve purchased must be sent back, not all do. It then becomes your responsibility to check with the Consumer Product Safety Commission to have sufficient time to remove all affected items from your store and ensure customers have a convenient way to return any defective items they’ve purchased.

The average business doesn’t intentionally break the law, but even unintentional illegal acts can damage a business’s reputation while also being costly. By being aware of some of the most common ways to break the law in business, you might be in a better position to avoid doing some of the same things.


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