In a recent case that highlights the importance of fair employment practices, DoorDash agreed to pay $17 million to New York State after being accused of using workers’ tips to offset their base pay rather than passing those earnings directly to the workers. This settlement serves as a wake-up call for businesses of all sizes—especially small business owners—about the importance of HR compliance, employment laws, and the ethical treatment of employees.

Beyond simply following the law, successful businesses recognize that investing in employees, fostering a positive workplace culture, and treating staff fairly leads to stronger performance, better customer service, and long-term profitability.

HR and Employment Laws: The Foundation of a Strong Business

Running a small business comes with numerous challenges, but one area that cannot be overlooked is human resources and employment law compliance. Ignoring these responsibilities can result in lawsuits, fines, and damage to your reputation—issues that can sink a small business far faster than a corporate giant like DoorDash.

Key areas where small business owners need to stay compliant include:

• Fair Wages & Overtime – Employees and contractors must be paid fairly according to state and federal laws. The Fair Labor Standards Act (FLSA) outlines minimum wage and overtime pay rules that employers must follow.
• Independent Contractors vs. Employees – Misclassifying workers can lead to legal trouble. Just because you call someone a contractor doesn’t mean the law sees them that way—factors such as job control, hours worked, and pay structure determine classification.
• Payroll & Taxes – Businesses must correctly withhold and report taxes, including Social Security, Medicare, and unemployment insurance. Failure to do so can lead to hefty IRS penalties.
• Anti-Discrimination & Harassment Laws – The workplace must be free from discrimination and harassment. Employers must comply with Title VII, the Americans with Disabilities Act (ADA), and other equal employment laws.
• Transparent Policies – Employees should have clear policies about how they are paid, when they are paid, how time off works, and where to report workplace concerns. A well-written employee handbook can protect both the business and its workers.

Legal compliance isn’t just for big companies—it’s for EVERY business. Even one mistake can cost thousands (or millions) in legal battles and penalties.

Getting Legal Help: A Smart Business Decision

Many small business owners think they can’t afford legal help—but the reality is, you can’t afford NOT to have it. A single employment lawsuit can cost tens of thousands of dollars, if not more.

Consider these ways to protect your business with legal expertise:

• Hire an HR Consultant – If you can’t afford a full-time HR manager, hire a consultant to help set up policies and train your team.
• Work With an Employment Lawyer – Even if you don’t need one regularly, having a legal expert review your employment contracts, policies, and wage structure can prevent costly mistakes.
• Use Payroll & HR Software – Platforms like Gusto, ADP, or Paychex help automate compliance, making sure employees are paid correctly and legally.
• Stay Educated – Employment laws change! Make it a priority to attend HR webinars, read industry updates, and subscribe to legal newsletters to stay informed.

Protecting your business legally isn’t an expense—it’s an investment in your company’s long-term survival.

Beyond the Law: Why Good Culture Beats Compliance Alone

Legal compliance is just the starting point. The best small businesses go beyond what’s legally required and prioritize people over profits.

Building a strong corporate culture isn’t just about avoiding lawsuits—it’s about:

• Retaining Great Talent – Employees who feel valued stay longer and contribute more.
• Boosting Productivity – Happy employees work harder and serve customers better.
• Enhancing Reputation – Businesses known for ethical treatment attract more customers and better employees.
• Reducing Turnover Costs – Constantly replacing staff is expensive. Investing in employees saves money in the long run.

How to Build a Business That Treats Employees Well

🔹 Pay Fair Wages – Ensure your team earns livable wages, not just the minimum required by law.

🔹 Respect Work-Life Balance – Avoid burnout. Encourage reasonable hours, breaks, and time off.

🔹 Recognize & Reward Effort – Small gestures like bonuses, recognition programs, or even a simple “thank you” go a long way.

🔹 Provide Growth Opportunities – Offer training, mentorship, and promotions so employees see a future with your business.

🔹 Foster Open Communication – Employees should feel safe voicing concerns without fear of retaliation.

🔹 Create an Inclusive Workplace – A diverse and welcoming team leads to more creativity, innovation, and success.

When employees feel valued, respected, and fairly treated, they become your biggest brand ambassadors.

Lessons From DoorDash: A Cautionary Tale for Small Businesses

DoorDash’s $17 million penalty is more than just a legal issue—it’s a lesson in why businesses must treat workers fairly.

Takeaway for small business owners:

• Cutting corners on wages, tips, or worker protections may seem like a short-term gain, but it can lead to long-term disaster.
• Even if a loophole makes something legal, that doesn’t mean it’s ethical—and public backlash can destroy a company’s reputation.
• Employees are the backbone of your business. Treat them well, and they will help your business thrive.

Final Thoughts: Your Business, Your People, Your Responsibility

At the end of the day, small business success isn’t just about sales and profits—it’s about people. Whether you have one employee or one hundred, how you treat your team determines your reputation, your customer experience, and ultimately your business’s future.

Your next steps:

• Review your payroll and employment policies
• Consult an HR expert or employment lawyer
• Invest in a strong workplace culture
• Go beyond compliance and treat employees fairly

Because in business, people always come before profits. And when you prioritize people, profits will follow.