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Study: Business landscape presents legal challenges for employers

A recent report found that, for the first time in decades, many areas across the country are seeing more businesses close than open. The article, which can be read in full here, specifies that metro areas have been hit the hardest by this troubling trend. It also notes that this phenomenon isn’t confined to just one type of business or industry.

From a legal perspective, California business owners will want to keep in mind some important factors in light of this difficult environment.

  • Fewer business openings mean fewer jobs, which can lead to some questionable – and sometimes unlawful – wage decisions. Established employers might be tempted to cut wages or benefits, confident that their employees don’t have many other job offers. These decisions can damage a company’s reputation and potentially be a violation of employee rights.
  • Employers who are dissolving a business may be exposed to disputes related to unfulfilled contracts, unpaid wages and debts, and leasing problems.
  • Business owners hoping to start a company may need more preparation than they expected, based on where they plan to open their business.
  • It will be especially critical for new businesses to have in place measures to prevent and resolve disputes in a timely and cost-effective manner.

These factors reflect some significant shifts in priorities and challenges for current, former and potential business owners. Instead of prioritizing growth opportunities, a business owner may instead need to focus on completing contracts, paying employees and minimizing costly disputes and penalties.

With all this in mind, we encourage readers to recognize the fact that these decisions are not to be made lightly. Whether you are currently operating, opening or closing a business, there are likely a number of legal elements that must be addressed. Failure to take these seriously and speak with an attorney could prove to be a costly mistake.

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