In California, everyone knows at least one person who works for a startup company. Of course, we hear about the perks of working at these trendy companies: stock options, a celebrity chef on staff, nap pods, meetings on trampolines, and a chauffeur service. What we hear less of are the growing pains that come with these young, optimistic businesses.
Specifically, just because a startup has big ideas, a CEO featured in Wired magazine, and a giant nest egg of venture capital funding does not always mean that the company is operating lawfully.
In fact, whether born from ignorance, a desire to “do things differently”, or an effort to save money, startups can sometimes make significant mistakes at their employees’ expense:
- Employee misclassification. It is not uncommon to hear that a startup has classified its workers as independent contractors instead of as employees. In addition, startup companies may classify an employees as “exempt” when they do not actually meet the criteria. Companies do this because they believe that it saves them money, skirts wage and overtime laws, and protects them from liability. This is wrong and can open the company to significant penalties and damages.
- Wage and overtime violations. Non-exempt employees are entitled to significant federal and state protections regarding minimum wage, overtime pay, and rest breaks. Startups that play fast and loose with these laws are inviting lawsuits.
- The lack of an adequate policy handbook. There are numerous employee protections that require employers to notify employees of their legal rights and to establish protocol for making and investigating complaints. Employee handbooks serve these legal mandates. An inadequate handbook, or a lack of one entirely, can create confusion and open the startup to legal liability.
- Lack of proper human resources. The desire to reinvent the wheel or run a different kind of business is the wrong approach when it comes to establishing a human resources department. This also goes hand in hand with poor record-keeping of information that has to be included in an employee’s personnel file.
- Age discrimination. This is a big one for startup companies. Age is a protected class under state and federal laws. This means that discrimination based on a person’s age is unlawful. Unfortunately, many startups find it desirable to exclusively recruit and hire young employees, regardless of older applicants’ experience and qualifications.
Moss Bollinger Stands Up For Employees
If you work for a startup company, we urge you to be vigilant and remain aware of your legal rights. If you believe that your employer has violated your legal rights, consult with an attorney. The Moss Bollinger law firm fights for employees against employers who fail to respect their employee’s legal rights. We work on a contingency basis and do not get paid unless you do. Call Moss Bollinger today at (866) 535-2994 for a free consultation or use our online form.