What Responsibilities Does a Business Have Toward Its Employees? (2024)

When your small business adds employees, then the business and you as the owner inherit some responsibilities to those employees according to the mandate of both the federal government and your state government. These responsibilities exist on a broad spectrum and include a variety of things, including the payment of those employees as well as ensuring that their work environment is as safe as possible. If you neglect these responsibilities, the legal costs could be high, and could include the loss of your permits and business licenses.

Employee Payments and Taxes

As a business owner and employer, it is your responsibility to pay your employees. You should ensure they receive at least the minimum wage per hour for the state in which your business operates. You should pay each employee the money you owe them or working in a given minimum pay period. That payment should include any overtime that the employee has worked, any sick leave that they have taken, and any vacation wages that they are entitled to.

You should ensure that your employees receive their paychecks on time and should strive to never delay those paychecks so that your employees are also able to meet their own financial obligations in a timely manner.

The IRS and Government

The state government, as well as the IRS, have requirements when it comes to such things as federal and state taxes, Social Security, and Medicare. You should make these payments out of the wages paid to each employee who is employed at your business.

Depending on the state in which your business operates, there may be stricter rules for how you are to pay your employees. It is important that you check with the labor department of your state to learn more about the labor laws in your state.

Employer Reporting to Employees

You shouldn't just pay your employees. You should also make sure you report to them about their earnings. This is one of the most important responsibilities of management to its employees. Each paycheck should include a statement that shows their gross pay, the withholdings, and deductions that have been made, and their net pay for the pay period in particular and the year to date in general.

For each year the employees should receive an annual statement that shows their gross earnings during that period, their deductions, and any withholding that have been made. These statements should come before the end of January of the year after the reporting year.

Maintaining Safety Standards

It is a requirement of the federal government that you maintain a work environment that is safe for your employees. The level of safety should be in accordance with the specific standards set by the Occupational Safety and Health Administration (OSHA) for the industry in which your small business operates.

It is also imperative that you inform your employees of any areas in your business where they will be at a high risk of injury so that they are aware. You are also required to train them in the correct safety procedures so that the risk of incurring an injury can be kept at a minimum.

Maintaining Proper Equipment and Tools

Make sure that each of your employees uses the correct equipment and tools that are safe for the particular industry that your business operates in. That is another responsibility that rests on you as the business owner.

You should also regularly inspect the facilities at your business' place of operations and also test the safety knowledge of your employees. By doing these regularly, you ensure that your workplace is always as safe as it possibly can be under any given circ*mstances.

Obtaining and Maintaining Insurance

While the above section was all about the measures you can take as a business owner to ensure that your workplace is as safe as it can possibly be, the fact is that you can never fully cover your bases. There will always be a risk that accidents will happen.

When your employees suffer injuries in the course of work through no fault of their own, you are entirely responsible as their employer for filing a claim with the workers' compensation insurance provider you had signed up with.

Workers' Compensation Insurance

Workers' compensation insurance is a special kind of insurance that covers the medical care expenses of restoring the worker to health, as well as the payment of their wages during the period that they are recovering. This is known as wage replacement.

Throughout the process, you must always treat your worker with the respect that he deserves. You should never delay the filing process or attempt to delay it or try to stop the employee themselves from filing a claim. It is illegal, and you could end up not only facing serious legal fines but also potential jail time, if it is found that you have failed to honor your end of the bargain, as an employer and business owner.

The Business Climate

Now, to be entirely fair, it is not your responsibility to make sure your employees are always in a happy mood. However, it is the social responsibility of a business towards employees to prevent harassment in the workplace. You shouldn't harass your workers in any way and neither should you allow your employees to harass each other in any way.

As a business owner, you have a responsibility to engineer the right kind of work environment for your employees. It should be one where they all feel respected and treated fairly regardless of their religion, abilities or disabilities, countries of origin, ethnicity, gender, race or age.

There may be times when your employees come to you and complain about harassment in the workplace. You should never ignore your employees about these issues. You should confront these issues directly and immediately. Doing so will not only make your employees feel taken care of, which could lead to increased productivity, it will also help you avoid high legal costs in the form of lawsuits for allowing harassment to occur in your workplace.

Responsibility of Employees to Employers

While it is important to know about the social responsibility of the company to the employees, the employees also have various responsibilities to you as their employer. After all, responsibility goes both ways.

Following Rules

Your employees should obey the policies and rules of your organization, as well as the instructions they need to perform the work they are supposed to perform. This is the essence of what it means to be an employee.

Honesty

Your employees are expected to be honest in their dealings with and on behalf of your organization. They should not steal from you or lie to you about business matters. They should also be honest in the way they represent themselves while applying for employment.

Care and Skill

Your employees should employ due care and skill in the job that they have been assigned to do. They should offer the full value for the time for which you are paying them.

Confidentiality

The employee is expected to keep the secrets of the company, and should not disclose confidential company information to unauthorized persons.

Conflict of Interest

The employee is expected to disclose any conflict of interest that may arise. These include relationships that could compromise you as the business owner, including working for a competitor.

Care of Property

The employee should exercise care for the facilities, equipment, and overall property of the employer.

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