Running a home-based business is very different from any other type of company. You don’t have an office or a strict workspace – it’s just whatever you can carve out of your home. And while, traditionally, home-based businesses were solo ventures, more people are hiring people to help them out when the work piles up.
While most entrepreneurs know this creates a few extra responsibilities, like having to apply for an Employment Identification Number or withhold payroll taxes, there are a few other possible pitfalls that could trip up a home-based business owner if she isn’t aware they exist.
Violating Zoning Laws.
Zoning laws are already a huge thorn in the side of home-based businesses. Residential areas typically aren’t zoned for business and, if you run one out of your house, your city could come knocking. But even if you’re cleared to run your business, you may still run afoul of zoning once you hire an employee because of what they bring with them. An employee means someone is going to be in and out of your house every day. Further, they have to drive through your neighborhood and park on your street to get there. It might seem odd that, if they were just visiting, it wouldn’t be an issue at all but once they start coming as an employee, that changes everything because their visits are so frequent. Check with your city and, if you have one, homeowner’s association to see just what they have to say, if anything. The last thing you want is to find out your business is now breaking the law because it hired somebody.
Not Clarifying Employee Break Policies.
Some of the biggest issues that come with hiring someone to work for your home-based business is the actual size of your operation. Home-based businesses tend to be confined to garages or home offices, so you don’t even have a separate break area to offer. Not every state requires businesses to provide their employees a break, but a little under half do require an allocated meal time and, if you don’t have a break area, you have to allow your staff the opportunity to eat off-site. Further, if they are expected to continue working through that meal, you have to pay them. Normally this isn’t too much of a problem when it’s just you and someone else working because you naturally become comfortable with each other. However, if your relationship with your employee goes south, you don’t want to find yourself with a wage and hour suit, answering claims you forced them to work through their lunch breaks. Make sure your break policy is crystal clear, though, and you shouldn’t run into any issues.
Forgetting OSHA Standards.
Nearly every private business with employees has to adhere to OSHA rules and regulations. While your home-based business may be exempt from some record-keeping and injury reporting requirements because it has under ten employees, your business still cannot violate OSHA standards. That isn’t too much of a problem for most home-based businesses since the house is usually up to code as far as fire, safety, and sanitation go. However, a lot of home-based businesses do fail one, big requirement – providing access to a bathroom. There are quite a few home-based business owners uncomfortable with the idea of allowing an employee use the same restroom as their family, which is understandable if you didn’t know the person before you hired them. I recommend – along with setting aside a part of your home specifically for the business – you designate a “business bathroom” near it. That way your home is still your home, and you don’t run afoul of OSHA.
Hiring your first employee is an exciting milestone for any small business owner. Not only does it mean you’re growing, but it helps you to start delegating some of the busy work so you can focus on what you do best – running your business. The trouble is that home businesses face such a unique set of challenges that the rules made for other companies just don’t fit the model of a home-based business. Regardless, you still have to follow the law, so just make sure you have all of the facilities, policies, and paperwork in place before hiring that new employee. That way you’ll be able to relax knowing all your obligations as a new employer are met.
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Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best. Follow her on Google+ and Twitter @mycorporation.