Business Adviser Magazine September 2013 | Page 38
Top Ten
By: Marco Garza
Foundational Risks
Today’s Companies Face
When it comes to operating at peak performance, today’s entrepreneurs face a variety of obstacles that can prevent them from meeting their business goals. There are a myriad of systemic pitfalls that can expose a company to risk and distract entrepreneurs, managers, and employees from what should be their primary focus -- Growing their business.
T
he price is high for ignoring foundational risks. Evidently, the risk of financial losses
Recommendation: Establish a consistent hiring practice. Follow uniform processes, conduct proper background checks, use trained interviewers, and create offer letters that provide mutual understanding.
laws mandate, among other things, that certain employees receive overtime pay for overtime worked. Incorrectly classifying employees as exempt from these protections, when they should be non-exempt, can result in awards of back wages, fines, and penalties against the company. Additionally, incorrectly classifying a worker as an independent contractor can result in similar risks and penalties. Recommendation: Seek legal counsel with experience in employment law for guidance on FLSA and independent contractor classifications. Federal and state laws regarding classification of employees are tricky, and employee classification issues should therefore be referred to experienced outside counsel. The IRS and many other state and federal agencies use very specific tests for determining what constitutes an independent contractor, so contractor/employee issues should also be referred to experienced outside counsel.
due to fines for non-compliance is on most top entrepreneurs’ minds. However, additional outcomes such as negative publicity and reduced customer confidence can also have a detrimental impact. This article identifies ten foundational risks that can distract the business owners from achieving their business’ goals and also offers recommendations for minimizing to eliminating those risks altogether.
Risk #3:
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