…And yes, even kind, well-meaning leaders fall into these traps.
Let’s have a little truth moment.
You care about your team. You want to run your business the right way. You’re not cutting corners. You’re not trying to cheat anyone.
But even the most thoughtful, people-first leaders can find themselves out of compliance — simply because labor laws are layered, complex, and constantly evolving.
In my HR consulting work, I’ve seen it happen more times than I can count. So today, I’m walking you through three of the most commonly broken labor laws that could be putting your business at risk — without you even knowing it.
1️⃣ Misclassifying Employees: Salary Doesn’t Automatically Mean Exempt
This one catches so many leaders off guard.
Just because you put someone on salary doesn’t mean they’re not entitled to overtime. Under the Fair Labor Standards Act (FLSA), to be classified as exempt, an employee must meet specific duties tests — not just a job title and salary threshold.
Here’s a real example:
A client once told me (and this is a direct quote), “One of the reasons I hired you is because I hired my friend and made him exempt. I thought I was helping him — but then the Department of Labor came knocking.”
Turns out, his friend didn’t supervise two or more full-time employees — a required condition for the Executive exemption. The DOL found the misclassification and required the business to pay over $10,000 in back wages.
Lesson? Being generous without understanding the law can still lead to costly outcomes. Good intentions don’t protect you from federal investigations.
2️⃣ Asking the Wrong Questions During Interviews
“Do you have kids?”
“What year did you graduate?”
“Where are you from?”
Innocent chit-chat? Maybe. But to the EEOC, these could signal discrimination based on age, family status, national origin — or worse.
I’ve seen cases where an offhand question in an interview turned into a full-blown complaint. You might be trying to connect. But unless your hiring managers are trained on what not to ask, you’re leaving the door wide open.
Pro tip: Be warm. Be authentic. But be trained. Protect your candidates, your brand, and your bottom line.
3️⃣ Delaying Final Paychecks — Even for Good Reasons
A client once called me in a panic:
“Vanessa, our employee just quit without notice. They still have keys to the building. Can I hold their final paycheck until they return them?”
I understood her frustration. I really did.
But the law doesn’t allow for that.
In Michigan (and many other states), an employer must pay all wages due regardless of whether the employee still has keys, a uniform, a laptop, or anything else.
You can request the return of company property — but you cannot withhold final wages as leverage. It’s considered wage theft in many states and can trigger penalties, legal complaints, or interest owed on delayed payments.
Even if you’re mad. Even if they ghosted you. The law still applies.
What’s the Fix?
You can’t fix what you don’t know is broken — and that’s why I always recommend a simple HR Compliance Checkup or Audit.
It’s not about shame or blame.
It’s about making sure your company is safe, your policies are clean, and your people (and pay practices) are fully aligned with the law.
It’s peace of mind. And let me tell you — peace of mind is worth everything.
✨ Want to Sleep Easier at Night?
Let’s schedule a free 10-minute consultation next week.
We’ll talk about where you might be vulnerable — and how to shore it up before a complaint or agency shows up.
Click the “Contact” tab to grab your slot.
