Experienced Attorney Dedicated To Protecting Client's Interests

Photo of Baker & Associates', office building
  1. Home
  2.  » 
  3. business litigation
  4.  » How should small business owners handle wage issues?

How should small business owners handle wage issues?

On Behalf of | Nov 28, 2022 | business litigation, employment law

Concerns about inflation are leading to financial stress for nearly everyone across the country – including small business owners. It can already be difficult to strike a balance between running a business and efficiently managing finances, and the current circumstances are weighing heavily on business owners.

Financial stress can escalate quickly. This is especially true considering that claims of unpaid wages are some of the most common lawsuits small business owners face. So, what must small business owners consider in these cases?


As a small business owner, because payroll should be a top priority, it is important to be aware of how to handle employee claims.

  1. Make sure employees report to you: It is likely that your employees will speak to you first if they encounter a wage issue. However, you can help to ensure this by establishing a clear complaint process in your company policies or employee handbook. That way, you remain aware of any issues within your business – and can resolve them quickly. Then, you should also have a plan in place for how you will handle any complaints.
  2. Know the process: It is also important to understand the process your employees might engage in if they file a claim or lawsuit to recover unpaid wages. This knowledge allows you to prepare and protect yourself before a claim is filed.
  3. Know the law: You should also take time to understand federal and state wage laws as you first establish your business, and be aware of California’s penalties for unpaid wages and employees’ waiting time.
  1. Speak to an attorney: The moment you are notified of a claim or lawsuit, you should contact your attorney, or an employment attorney to counsel you on your next move. The more you delay, the harder it will be to defend your position.

As we have stated in previous blog posts, being proactive is highly beneficial. Even if you do not face a wage dispute, you can take steps now to prevent issues in the future.


If you face financial stress, it might be necessary to reevaluate your business operations and expenses – at least temporarily – to manage current wage issues or avoid future ones. Current events may create challenges for small business owners, but being prepared and actively addressing these concerns can help you effectively handle disputes and litigation that may arise.