Classifying employees properly is imperative to avoid liability. Ensuring employees are classified and thus paid properly should be of chief importance when starting any business. American Homes 4 Rent, a company that owns and rents out 37,000 single family homes across the U.S., learned this lesson when it was slammed with having to pay over $400,000 due to misclassification of their employees, the LA Times reports. The U.S. Labor Department held that American Homes misclassified employees by changing their titles in order to avoid having to pay said employees overtime.

If you are building your business and are planning to take on employees or if you are already running a business with employees, it is advised that you contact a lawyer to ensure that you are properly classifying and paying those employees. The attorneys at The Rad Firm, APC can make sure your employment relationships run smoothly, in accordance with both state and federal laws. Contact us at (310) 461-3766 to determine whether you are properly classifying and paying your employees.