Great employees can be some of your business’s strongest assets. Although many business owners attempt to go it alone at the beginning, at some point you simply will not be able to do it all, and you’ll need to hire help. This is a great thing, because it probably means your business is growing!
While you should not hesitate to hire well-qualified, reliable people when the time is right, you should be aware of how your employees’ acts can affect your business’s liability. Generally speaking, employers are liable for the wrongful acts of employees that are committed within the scope of their employment. The scope of employment is determined by looking at such factors as whether the employee was “on the clock” and whether he was performing the types of duties within his job description.
For example, a delivery driver who causes a car accident driving from one delivery to the next will probably have been acting within the scope of his employment, resulting in liability for his employer. On the other hand, when the same driver uses the company van to pick his child up from school after all of his deliveries are finished, he is probably acting outside the scope of his employment.
Although hiring employees can be a bit scary because it introduces the risk of increased liability, there are ways that you can manage this risk. Forming a limited liability entity and maintaining adequate insurance are just some of the ways that you can manage employee-related risk. If you are considering adding employees to your business, consult an employment attorney to guide you through the process and get the full benefit of the great help you deserve.