Employment Law for Small Businesses

Things can get pretty overwhelming for small business owners– there’s just so much that you have to do in order to keep things operating smoothly.

Employment law, in particular, can be an overwhelming topic, because it can get so complex! However, fully understanding and complying with employment law is critical to protect your business and ensure that your employees are kept safe and treated fairly.

Don’t panic– we’ve compiled the basics of employment law for small businesses to help you stay compliant

Minimum wage & overtime

Currently, the minimum wage in the state of Arkansas is $11.00 per hour. Federally, the minimum wage is $7.25 per hour. Be sure to check with your state’s guidelines to fully understand your state’s minimum wage in order to ensure that employees are paid fairly– and that you stay compliant with local labor laws.

Employees who work more than 40 hours a week are required to receive overtime at a rate of 1.5x their normal hourly rate. In the state of Arkansas, employees working overtime must receive $16.50 for the hours they work past 40 hours per week.

Workers’ compensation

If an employee is ever injured on the job, they’re entitled to receive worker’s compensation benefits. In order to make sure that your employees are able to receive these benefits, your business should carry workers’ compensation insurance.

Workplace safety

In order to avoid employee injury on the job that would necessitate workers’ compensation, it’s very important to provide a safe working environment for all employees. This includes being familiar with, and complying with, OSHA regulations, in addition to paying for training and protective equipment for your employees to use as necessary.


Discriminatory hiring practices are illegal. This includes discrimination on the basis of race, color, national origin, sex, religion, age, disability, or genetic information. We’d highly advise doing some research on how to ensure that your hiring practices do not discriminate against any protected group.

Family and Medical Leave Act (FMLA)

If your business has 50 or more employees, you’re required to provide up to 12 weeks of unpaid leave per year for certain family or medical reasons. These reasons might include the birth or adoption of a child, or treatment of a serious health condition.

Complying with employment law

It’s always good to keep a paper trail, whether it’s for employee relations, inventory, sales, or taxes– it never hurts to be able to provide receipts.

In the case of employment law, you should keep accurate records for all employment-related activities, like hiring, firing, and disciplinary actions. Having these records on hand can be a big help in the event of a lawsuit or an audit.

These records should include job applications and resumes, employee handbooks and policies, employment contracts and agreements, time and attendance records, payroll records, performance evaluations, disciplinary actions and grievances, and termination notices and exit interviews.

Plus, you should always make sure that your managers and employees are fully educated on employment law in relation to your company’s policies and procedures. This can help keep everyone on the same page, avoiding misunderstandings and miscommunications.

It’s beneficial to train employees on subjects like discrimination and harassment, wage and hourly work laws, benefits and leave policies, workplace safety, discipline and termination procedures, and performance evaluations and feedback.

Why is employment law important?

Employment law is a crucial aspect of running a small business. Having a good understanding of employment law means that you’re less likely to run into a situation that can end in a lawsuit. It also means that you can make sure your employees are fairly treated and adequately trained– which always benefits workplace morale!

If there are some aspects of employment law that you need to familiarize yourself with, or if you’re facing a lawsuit from an employee, it’s time to get in touch with an experienced attorney. At Davidson Law Firm, we’re experts on employment law, and are here to answer your questions and– if necessary– defend you and your business in court.