Top legal concerns for small businesses

Written By: Ambrianna Freeze

Running a small business is a challenging endeavor. Aside from paying the bills, managing the store and making sure the accounting is taken care of, small business owners also have to be aware of the laws regarding employees and marketing. These laws protect employees and consumers and must be heeded. Without paying special attention to state and federal regulations, a small business can easily find itself in trouble with the law. Even accidentally breaking these regulations can result in fines and misdemeanor charges at the very least. The top two legal concerns for small businesses include employment and labor laws and advertising and marketing laws.

Employment and Labor Laws

Regardless of the size of the company, federal and state laws maintain that employees have certain rights within their place of work. These rights include a safe working environment, non-discrimination of employees and fair compensation. Many small business owners run into trouble simply by being uninformed of particular parts of the law. Each employee hired by a company is entitled to different benefits, depending on their status: independent contractors, for example, are not paid for sick days, while h
ourly and salaried employees generally are. Recognizing exempt versus non-exempt employees also becomes an issue for small business owners. Exempt employees, who are paid a salary instead of an hourly wage, are not required to be provided with as many daily benefits as hourly employees.
This is a good option, of course, as things like meal and rest breaks do not have to be worked out for salaried employees, but if an employee is improperly classified as exempt when they are, in fact, non-exempt, a small business owner can be sued for failing to prov
ide them with their rights under the law. To avoid this and other legal issues, small business owners should carefully evaluate the status of each employee, as well as make sure that proper safety regulations are in place to protect employees.

Advertising and Marketing Laws

Complying with advertising and marketing laws is something that should be of great concern to small business owners. The laws are detailed and extensive, but breaking them can land a small business owner in hot water. One of the largest concerns are truthful advertisements. The Federal Trade Commission requires that all advertisements be truthful and non-deceptive, have evidence to back up their claims and be fair. Misleading or deceptive advertisements can lead to fines and misdemeanor charges at minimum. Advertising is an excellent tool for any business, but false marketing is a dangerous way to improve the sales rate of a business. In order to comply with the laws, be informed about state and federal regulations, and take care to review marketing and advertising endeavors before they become available to the public.


At times, employee and marketing laws may seem excessive and overwhelming. Without the proper care and attention to laws regarding employees and marketing, small business owners can find themselves hurting in the worst way. The penalties for the mistreatment of employees or false advertising, even accidentally, are harsh and strong. These laws may seem like a nuisance, but keeping employees safe, healthy and happy and providing the public with fair advertisments and marketing strategies will help ensure a business succeeds in the long run.