Beware of Contracts: 5 Employment Law Tips Your Startup Needs to Know

Beware of Contracts: 5 Employment Law Tips Your Startup Needs to Know

No company is immune from employment law. Whether you’re a startup of a few or a corporation of a few thousand, every business needs to be well equipped to handle the law.

In recent years, employment law, especially in the province of Ontario, has slanted towards the employee’s favour. It can be extremely difficult for a company to successfully fight accusations or complaints that a business has violated a particular labour code.

When you’re a startup, however, it can be a tad harder to combat the government. You have finite resources and a smaller budget than a much larger company.

To avoid litigation in the future, you need to have an arsenal of information and possibly the help of an employment lawyer. This information can help you stay within the confines of the law as well as ensure you can operate your business without having to make considerable sacrifices.

Here are five employment law tips your startup needs to know:

1. Know the Basics of Employment Law in Your Region

Employment law will differ across the country. Although there are nationwide standards in place by the federal government, there are other things that are dealt with at the provincial level.

Indeed, Alberta will have different labour standards than Ontario, while British Columbia will have various laws that Quebec doesn’t have. In other words, know your province’s labour codes.

2. Maintain a Transparent & Consistent Workplace Policy

Once your startup moves beyond just you, your co-founder and senior engineer, you will need to establish a workplace policy, and it must be transparent and enforced consistently. Simply put: if two staff members violate office conduct, then they both must be punished equally.

Should you begin playing favourites or avoid certain aspects of your corporate policies, then you will be slapped with a lawsuit down the line or be paid a visit by a bureaucrat.

3. Be Careful of How You Turn Down Applicants

You have likely heard about a company who turned down an applicant, only having that same applicant make something up on social media, which went viral of course.

Well, no matter what, it is imperative to be careful how you turn down applicants. This means that you should refrain from explaining why you’re not hiring them. Yes, honesty is the best policy, but not in this case and in today’s environment. To quote Nancy Reagan, just say no.

4. Differentiate Between Employee & Independent Contractor

A growing number of companies are taking on independent contractors more than hiring full-time salaried employees – this is the unintended consequence of hefty employment laws.

If you’re tapping the human capital of an independent contractor, it is crucial to understand the difference between an employee and a contractor. The former will be given directions by the company, using the business’s equipment during business hours. The latter will perform specific services for your company with their own tools and supplies in their own capacities.

Suffice to say, an independent contractor is a small business owner whom you hired to perform a specific job. An employee is someone you hired to work eight hours a day, fulfilling several tasks, being paid an hourly wage or an annual salary.

5. Record & Document Meetings with Employees

Whether you’re just having a sitdown meeting with an employee or you’re giving an employee a warning about their work, you should record and document every single meeting. This is key.

Why? Because if they file a complaint that is a total fib then you have the paperwork to prove otherwise. It would be even better if you have them sign these records as well.


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