Ignorance is Not a Defense

“I’m doing the best I can in running my company and managing my employees. I hear about laws or rules I think I should probably be following but, on the other hand, I figure I’m too small to have to worry about getting in trouble. At what size should I be concerned?”

Your HR Survival Tip

You should start worrying about compliance the moment you hire your first employee. California is a particularly tough state with a lot more employment laws than most other states. It’s also very easy for employees to generate complaints and claims so it really pays to be as compliant with those laws as you can. There are a few things we’ve noticed when working with some new clients:

• You need to have a state identification number for payroll processing, a payroll company, and a paycheck timeline to ensure employees are paid within the legal deadlines. If any employees are in other states, you must obtain a state ID number from each so the payroll taxes are submitted to the correct state and agency.


• You must have a workers’ compensation policy effective no later than the employee’s first day of employment and that includes all locations where you have employees.


• You need the required new hire forms and brochures. The required I-9 Form employee identification documents have only a 3-day grace period.


• You must set up paid sick leave, whether you choose an accrual or front-loaded method. Check the state and locale of each employee because the laws vary.


• You need to be prepared to process and track legally available unpaid leaves of absence, such as CFRA (California Family Rights Act) leaves, Pregnancy Disability Leaves, etc. The paperwork can be very important so don’t just provide the time off.


• If you copied your Employee Handbook from another company or online, make sure it includes information that actually applies to your practices and your company’s size.


• If you are paying all your employees a salary because it’s easier than maintaining timecards, stop. This is a hot button.


• If you are just using independent contractors now because you’re not ready to be an employer, stop. This is another hot button that’s gone through a lot of legal battles in the past few years. Either you are in business and ready to do it right or you’re not. You don’t get to choose to do trial runs with your workers.

It’s really not that difficult to become compliant with the basics and the non-compliance penalties can be harsh. Don’t set yourself up for a big penalty when you have a choice. The courts have never allowed ignorance of the law to be used as a defense.