In this episode, Rich Sierra, President of the Florida Small Business Legal Center, breaks down one of the most serious — and costly — mistakes business owners make: misclassifying employees and failing to pay wages properly.

Rich explains how treating workers as “independent contractors” when they are actually employees can trigger IRS audits, back wage claims, and even personal liability under the Fair Labor Standards Act (FLSA) and Florida law. He also provides actionable steps business owners can take to stay compliant and protect their company from lawsuits.

🧩 Key Topics Covered

1. Employee vs. Independent Contractor

Legal definitions under the IRS control test and economic realities test.

Common misclassification red flags — supervision, tools, schedules, and payment structure.

Why intent doesn’t matter: how courts look at actual working relationships.

2. The Cost of Misclassification

Financial penalties, back pay, and lost tax deductions.

Double exposure — both federal (IRS & DOL) and state (Florida Department of Revenue) audits.

The impact on employee morale and your company’s reputation.

3. Unpaid Wage Claims

Under FLSA, owners and managers can be personally liable for unpaid wages.

Florida’s wage claim process allows recovery of attorney’s fees and double damages.

The importance of accurate timekeeping and compliance with overtime rules.

4. How to Stay Compliant

Conduct classification audits.

Use written contractor agreements aligned with legal standards.

Maintain separate 1099 and payroll documentation.

Review exemptions and overtime eligibility regularly.

Consider Employment Practices Liability Insurance (EPLI) for coverage.

💬 Takeaway Quote

“When in doubt — classify them as employees. It’s safer, and it protects your business from devastating financial exposure.”
— Rich Sierra, Esq.

🔗 Resources Mentioned

Fair Labor Standards Act (FLSA): https://www.dol.gov/agencies/whd/flsa

Florida Department of Revenue: https://floridarevenue.com/

📞 How to Contact Rich Sierra

📧 Email: Rich@RichSierra.com

🌐 Website: FloridaSmallBusinessLegalCenter.com

📱 Facebook: @FSBLEGAL

📺 YouTube: @RichardSierra

🐦 Twitter/X: @Rich_Sierra

📸 Instagram: @FSBLEGAL

💼 Digital Business Card: https://poplme.co/hash/Qd9D1azj/1/s

📘 Business SOS! Eight Common Legal Mistakes Business Owners Make and How to Avoid Them
Available now on Amazon, Barnes & Noble, or ask for it at your local bookstore.

Franchises can be a great opportunity—but they can also drain your savings if you don’t know what to look for. In this episode of the Business SOS! podcast, attorney Rich Sierra continues the franchise series with the last 11 disclosures (Items 13–23) in the Franchise Disclosure Document (FDD).

You’ll learn:
✅ How trademarks, patents, and intellectual property factor into franchise rights
✅ Why Item 19 (earnings claims) is one of the most critical sections—and how to spot misleading promises
✅ The importance of reviewing outlet data (turnover rates of franchisees)
✅ What to watch for in franchise contracts, including personal guarantees and dispute resolution clauses
✅ Smart strategies to evaluate a franchise before you invest

📌 Resource: FTC Franchise Rule Compliance Guide

How to Contact Rich Sierra:
📧 Email: Rich@RichSierra.com

🌐 Website: https://www.FloridaSmallBusinessLegalCenter.com

📱 Facebook: @FSBLEGAL
📺 YouTube: @RichardSierra
🐦 Twitter/X: @Rich_Sierra
📸 Instagram: @FSBLEGAL
💼 Digital Business Card: https://poplme.co/hash/Qd9D1azj/1/s

📘 Business SOS! Eight Common Legal Mistakes Business Owners Make and How to Avoid Them is available on Amazon, Barnes & Noble, or your local bookstore.

Thinking about buying a franchise? Before you sign anything, you need to understand how franchises work and what legal risks come with them. In this episode of the Business SOS! podcast, attorney Rich Sierra breaks down the basics of franchising and the first 12 required disclosures in the Franchise Disclosure Document (FDD) under the FTC Franchise Rule.

You’ll learn:
✅ What makes a business a “franchise” under the law
✅ The three elements of a franchise (trademark, control/assistance, and required payment)
✅ The first 12 disclosures every franchisor must provide, including management experience, litigation history, initial fees, estimated investment, and territory rights
✅ Red flags to look out for before you invest

📌 Resource: FTC Franchise Rule Compliance Guide

How to Contact Rich Sierra:
📧 Email: Rich@RichSierra.com

🌐 Website: https://www.FloridaSmallBusinessLegalCenter.com

📱 Facebook: @FSBLEGAL
📺 YouTube: @RichardSierra
🐦 Twitter/X: @Rich_Sierra
📸 Instagram: @FSBLEGAL
💼 Digital Business Card: https://poplme.co/hash/Qd9D1azj/1/s

📘 Business SOS! Eight Common Legal Mistakes Business Owners Make and How to Avoid Them is available on Amazon, Barnes & Noble, or your local bookstore.