The legal implications of running a small business can be daunting. With overwhelming jargon and constant changes to the law, it can be confusing to navigate. Especially when you’re trying to juggle the day-to-day running of a company. Despite the government trying to simplify the legal side of things, if you’re not confident in the procedures, it can soon lead to sticky situations. This can not only cost you financially, but can also see your company’s reputation tarnished.
But not to worry. Whilst there are plenty of legal hurdles that can make you feel you’re pulling hairs, there are ways to get clued up and manage risk as best you can. Here are some of the top legal fears that plague small business owners, and what you can do to avoid them.
Between now and 2018, up to 11 million workers not currently on workplace pensions will be automatically enrolled in a government savings scheme.
For many small businesses, there has been deep concern that the costs incurred by this new procedure will dramatically affect the financial state of their company. A reported 21% of those employing 1-5 staff believe it will put them out of business.
Preparation is key:
It’s essential you’re able to cope with the administrative aspect of auto-enrolment, as well as the financial burden it brings on. Even though employees can opt out of the scheme within a month auto-enrolment is a legal obligation. You, as a business owner, will be required to provide.
Before you start panicking about your bottom line, you should know exactly what is required of you. The government has already set minimum requirements of what is expected from staff a company auto-enrols. However, there are also detailed specifications about who exactly you need to enrol. When you will need to begin the auto-enrolment process depends on your size and tax status. If you don’t feel confident setting this up yourself, it’s a good idea to seek professional counsel.
2. Flexible working
‘Flexible working’ is a way of working that suits employee needs. This includes fluid start and finish times, or working from home. The introduction of this has raised many concerns raised for small businesses. They fear it could lead to increased costs, and a disjointed team who are unable to communicate effectively on projects.
The traditional way of working is becoming dated:
The Department of Work and Pensions reported that 65% of employers saw improved recruitment and retention levels from introducing flexible working policies. This is a significant amount if you’re looking to grow your business.
You may be under the illusion that flexible working is difficult and costly to implement. However, you can create frameworks that work in favour of your business. For example, offering flexibility on re-assessing working hours to avoid any commute times. Implementing cloud-based technology systems to keep track of employees working from home or remotely is also popular.
If you work with larger B2B companies that owe you money, you may feel that the cost of going to court is intimidating, but a recent survey showed that fear of litigation actually costs SMEs a whopping average of £172,000 per company. That works out to be £250 billion across the UK.
Admittedly, pursuing a legal case is something that a small business should never have to deal with, but rather than fearing the expense, as well as the time and the uncertainty over winning the case, business owners should take comfort in the knowledge that there are plenty of legal processes out there designed to help them.
You can now pursue litigation at little or no risk:
Whether you insure your case or not, so that you don’t need to pay your opponent’s costs if you lose. You can also get a lawyer to defer some of their fees when working on your case. These are just a few of the revolutionary ways of managing your case, without the fear it will cost you your business.
As a small business, it’s understandable that you’d rather keep intimidating legal practice out of sight, and out of mine, but failing to take control of these procedures and confronting them ‘head on’ can be detrimental to the success of your business.
4. Employing international talent
Depending on your type of business or where you are located, having a supply of international candidates can help you to fulfil a specific, or specialised job role, and encourage talent growth on an international scale. However, since the immigration employment law has had so many drastic changes in recent years you may feel put off from hiring employees who have come from outside of the UK.
You can now be fined up to £20,000 per person for employing workers outside legal requirements. This can include those with expired visas, students working more hours than they’re allowed to, or people who are on visitor visas only.
Immigration employment for small businesses:
The law may feel confusing about the rights around immigrant employment. The system has been simplified to ensure that small businesses are not breaking the law, and can harness the diversity that immigration allows. As an employer, you need to ensure all your staff members have the right to work in the UK.
Basic rules on how to check this include ensuring the documents handed in upon employment are original. They cannot be duplicated or amended in any way. You can also check the proof of identity. The home office is aware that small businesses can be often at risk. If you actively co-operate with them you can be supported throughout the process.
5. Maternity leave
In a report carried out last year, 40% of managers admitted to avoiding hiring younger women to get around maternity leave, with 44% saying the financial costs to their business are a significant concern.
Fearing the cost of recruitment, or general financial effects of maternity leave is an outdated idea. The government has strongly urged businesses to re-think this. Thanks to the changes made this year, women will now be able to share their leave with their partner. This means we may see more of an even spread of employees leaving, and returning to work.
Maternity leave is a statutory right:
There is no excuse for discriminating against pregnant employees, or being afraid of the effects of them going on leave. There are processes and initiatives available that the government have put in place to support you as an employer. You only need plan well and ask professional advice where you need to.
Whether it’s about the types of business ownership out there, all about franchises or public limited companies, there’s plenty to learn about the legal side of starting up a business in our Help Centre.
Rebecca Bridges is an employment solicitor and specialist in fields of employment and immigration law for Taylor Rose.