It can be tough for startups. Not only do they have to learn about how to go about their trade, but they also need to know about the law. The learning curve can be unforgivingly steep. But it’s a learning curve that all startups have to go through. It’s tough at the time. But the good news is that once you’ve made it out the other side, your business will be stronger for it.

For most startups, the most complicated area of the law is employment law.  Here are two situations when you’ll need to know about employment law.

When employing a contractor

There’s a big difference between employing a contractor and employing an employee. Many small businesses hire contractors because they want to avoid the overhead of hiring regular staff. This way they don’t have to comply with all the regulations and wages laws. But here’s the problem: startups regularly misclassify workers. And this puts them at risk of costly litigation.

Independent contractors are fundamentally different from employees in several respects. For starters, they come from their own, independent businesses. That means that you’re not the only client of a contractor. They’ve completed tasks for other people in the past.

And they will complete tasks for other people in the future. Independent contractors are also people who use their own equipment to complete tasks. They’re not reliant on the capital of your company to make a living. And finally, the skills that they provide should be specific. They can’t just be any old handy person.

Because it’s often hard to tell whether you’re compliant, it’s a good idea to consult specialists, like Ellis Whittam Limited. Employment law experts can save you money in the long run. By knowing the legal status of workers and contractors, you can avoid costly lawsuits.

When dismissing staff

Dismissing a member of staff is never a pleasant experience. But it can be made a lot more unpleasant if you don’t follow the letter of the law. First off, it’s important that you have your own internal disciplinary procedure that conforms to the law. This procedure should set out what actions are against company policy.

And it should provide a clear template of the disciplinary steps that should be taken in case of policy breach. When an employee does something that is against company policy, the correct procedure should be followed.

It’s important to do things by the book for many reasons. But perhaps the most important of those is to avoid the charge of unfair dismissal. Employees can claim unfair dismissal on racial, gender or religious grounds.

And they can challenge dismissal if they feel that the company has blamed them for an action. It’s important, therefore, for startups to remain dispassionate when dismissing a member of staff. Startups should do everything they can to go mechanically through the dismissal process set out in their handbook.

They should not try to apportion blame, even if an employee has stolen from them. That’s the job of the police and the law courts. All they need to do is to show that an employee breached company policy.