Why Do I as a Small Business Need to Worry About Employment Laws?
by Michael MacLean, MacLean & Company

I have a client who spends a fortune on lawyers and legal advice. I've never contacted a lawyer about my business. Does she know something I don't know?

Many independent entrepreneurs and small business owners have invested an enormous amount of time, energy, money and expertise in order to make their businesses successful. They have also invested heavily in another important resource - their "employees." From the time they hire employees to the time they fire them, there are a myriad of employment related issues they encounter daily that can have a profound effect on the operation of their businesses.

Throughout this employment relationship, small and medium size employers expose themselves to a significant level of risk because they lack the experience, resources, or focus needed to manoeuvre through today's complex minefield of employment laws and regulations. Some their employment decisions result from ignorance of the law, mistakes in judgement, or are intentionally harmful. Whether intentionally or unintentionally, they frequently violate the law and get themselves and their companies into deep trouble

Many mistakes are made early in the employment relationship because employers are unaware of their own rights and obligations. Nor are they aware of the employees' rights and obligations. Carelessness when hiring new employees could result in hiring "a mistake" and significant long term legal exposure. For example, if an employer makes false promises or bases the relationship on misinformation, the issue could end up in court and result in unnecessary pain and expense. Employers can easily get themselves involved with potential Human Rights complaints based on discrimination. This situation can be avoided by determining in advance what questions should or should not be asked on job applications and during the interview process. This will clearly demonstrate that all candidates and employees are treated fairly, reasonably and consistently.

Managing the ongoing employment relationship requires the employer to understand and comply with current laws and statutes related to employment standards, occupational health and safety, workers compensation, harassment and discrimination. To further complicate matters, employers need to stay abreast of newly introduced legislation.

- On January 1, 2004, the Personal Information Protection & Electronic Documents Act will extend to every organization that collects, uses or discloses personal information in the course of a commercial activity within a province, whether or not the organization is a federally-regulated business or not. Most small businesses are unaware of the requirements and impact of this new legislation. Non compliance will carry significant penalties.

Sometimes the volume and complexity of legal issues seems too much for a non-lawyer to grasp.There are many areas where small to medium size businesses would benefit from HR support before involving a lawyer. Most small to medium size businesses would benefit by applying more effective and strategic approaches to their human resource issues. Outsourcing the HR function is an idea that is gaining momentum for small businesses since most cannot afford a full time presence. Increasingly, employers are using HR specialists and consultants to create and develop a practical source of policies, reference material, procedures and checklists in order to manage all aspects of the employment relationship. Providing hands-on consultation, HR tools and training helps employers to contend with complex employment laws and regulations, thereby increasing overall productivity and avoiding costly legal fees.

If you are interested in finding out more about Michael MacLean and how he can help your company, please check out his website.

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