7 Employment Law Mistakes all New Business Owners Make


Starting a new business is an exciting time. There are so many things to think about and so many things to do. But one of the most important things you need to do is make sure you’re compliant with employment law. Unfortunately, many new business owners make mistakes when it comes to employment law. This can lead to costly penalties and even lawsuits.

1. Not having an attorney

There are a few reasons why you might be tempted to not hire an attorney when starting your business. Perhaps you’re on a tight budget, or maybe you think you can handle everything yourself. But employment law is complex, and making mistakes can be costly.

Without an attorney, you may not know all the laws that apply to your business. You also may not have someone to help you navigate the complex legal system. An experienced attorney can help you avoid costly mistakes and ensure that your business is in compliance with the law.

2. Not having clear policies and procedures in place

Without clear policies and procedures, your employees may not know what is expected of them and what they can expect from you. This can lead to confusion and conflict, and may even result in legal problems down the road.

If you don’t document employee performance, it will be difficult to take disciplinary action when necessary or terminate an employee for cause. Additionally, if an employee sues you for wrongful termination, a lack of documentation will make it harder to defend yourself.

3. Not updated the employee handbook

After all, you might not have any employees yet! But even if you only have a few employees, it’s still important to have an up-to-date handbook.

An employee handbook is a document that outlines your company’s policies and procedures. It can be used to communicate expectations to employees, and it can also protect your business in the event of an employment dispute.

If you don’t have an up-to-date employee handbook, you could be making some serious mistakes. Here are a few things that should be included in your handbook:

– A clear explanation of your company’s policies and procedures.

– A description of your company’s benefit offerings.

– A section on anti-discrimination and harassment policies.

– Instructions on how to report violations of company policy.

Don’t wait until you have dozens of employees to update your employee handbook. Make sure it’s a priority from day one!

4. Failing to stay up-to-date on changes in employment law

When you’re not staying up-to-date on changes in employment law, you could be putting your business at risk. Not only can failing to comply with the law lead to costly penalties and damages, but it can also damage your company’s reputation.

To avoid making mistakes, keep abreast of changes in employment law and make sure your policies and procedures are up-to-date. You can do this by subscribing to newsletters and alerts from legal organizations, attending seminars and webinars, or hiring a consultant like Levitt LLP.

If you have any questions about how a particular change might impact your business, don’t hesitate to reach out to an experienced attorney for guidance.

5. Not providing proper training to managers and supervisors


If you don’t provide proper training to your managers and supervisors, they may not know how to handle various situations that come up with employees. This could lead to legal problems down the road if someone files a complaint or lawsuit. Make sure your managers and supervisors are up-to-date on all employment laws and have received proper training on how to handle various situations.

6. Not addressing complaints in a timely fashion

Not addressing complaints can create a hostile work environment and lead to discrimination claims.

When an employee comes to you with a complaint, it’s important to take action right away. Address the issue head-on and come up with a resolution that is fair for both parties. If you don’t take action, the employee may feel like they have no other recourse but to take legal action against you or your company.

Discrimination claims are often based on an employer’s failure to address complaints in a timely and effective manner. If you don’t address complaints, you could be opening yourself up to a discrimination claim. By taking action right away, you can avoid these types of claims.

Hostile work environments can also be created when employers fail to address complaints in a timely manner. If employees feel like their concerns are being ignored, they may start to feel resentful and angry. This can lead to a drop in morale and productivity, as well as an increase in turnover.

Address complaints as soon as they arise to avoid any potential legal action or negative consequences for your business.

7. Failing to have proper documentation

There’s a lot to keep track of – and employment law is one area you can’t afford to ignore. One mistake that many new business owners make is failing to have proper documentation in place.

Without the proper documents in place, you could find yourself in hot water if an employee decides to file a claim against you. Make sure you have an up-to-date employee handbook that outlines your policies and procedures and is sure to have all new employees sign an acknowledgment that they’ve received and read the handbook.

In addition, make sure you keep accurate records of all employee communications, performance reviews, and disciplinary actions. Having these things on hand will help you defend yourself if an employee ever decides to take legal action against you.


New business owners have a lot on their plates, and employment law is often one of the last things on their minds. However, neglecting this important area of the law can lead to some costly mistakes. To avoid making these mistakes, new business owners should educate themselves on the basics of employment law and make sure they are in compliance with all applicable laws. By doing so, they can avoid potential legal problems down the road and focus on growing their businesses.