Business owners must wear several different hats: While they focus on ensuring that their company turns a profit, they also have to be sure that they are operating within the laws set by government agencies in New Jersey and at the federal level. One law that has to be adhered to is the Employee Retirement Income Security Act.
ERISA establishes legal standards at the federal level to protect employees at private companies. The law governs pension, retirement and profit-sharing plans as well as health insurance coverage. If the minimum standards are violated by the employer, the law allows for penalties and punishment.
Employers are required to outline the plan available to employees as well as set up a grievance system for those who have issues with it. There also have to be fiduciary duties if assets are managed by a plan. If benefits are improperly denied or delayed or there is a breach of fiduciary duty, this is considered a violation. Fines are the most common penalty. When the violation is more severe, it goes from civil to criminal. A criminal violation could result in imprisonment. All grievances and complaints are investigated through an exhaustive administrative process first.
Owners of companies are advised to be well-versed in laws relevant to their business including employment law. The other option is to hire a legal professional on a retainer or as-needed basis. It is important to be abreast of employment law in order to avoid the penalties for violations that are easily preventable. Professionals in employment law keep themselves updated on any changes that occur and, through their experience, get to know common violations. They may be able to help business owners avoid mistakes at their company.
