Advertising, Employment Law, Growth, Healthcare Law, Legal, Regulatory Compliance

The Not-So-Fun Part of Starting Your Business; Laws and Regulations

Legal issues are the last thing on an entrepreneur’s mind when they’ve come up with the “next big idea”. Who can blame them? This is hardly the part that of launching a business that gives you goosebumps. Below, I’ve highlighted a few of the most important business laws of which every new business owner in South Carolina should be aware. Non-compliance with these laws could mean huge fines or even worse. This is not an exhaustive list of every law and regulation but is a good starting point for your research. If I can help in any way, please let me know.

  • Environmental Regulations

Your business may be required to obtain permits or licenses before opening, which could take months in some cases.  This is something to begin exploring the minute you think of an idea because there could be enormous regulatory roadblocks you had not anticipated. Environmental regulations can be some of the toughest, but are not the only ones out there to be aware of, so do your homework or reach out to someone who has been through the same processes or someone who specializes in regulatory compliance.

Environmental regulations are governed by the U.S. Environmental Protection Agency and in South Carolina the Department of Health and Environmental Control (DHEC) and various “Bureaus” (See SC Environmental Permitting Guide).

There are many business activities that are subject to environmental regulation, for example; abrasive blasting, auto body shops, cabinetry/millwork, chemical manufacturers, concrete batch plants, cotton gins, crematories, drycleaners, fiberglass product manufacturing, foundries, furniture manufacturing, grain elevators, silos, incinerators, industrial furnaces/ovens, paint manufacturers and applicators, plating operations, surface coating/painting, and wood processing.

You can find assistance with these regulations through the South Carolina Small Business Environmental Assistance Program (S.C. SBEAP), which is a free, nonregulatory service from DHEC. They will help you at no charge to determine if your business needs permitting.  Call the SBEAP toll free helpline at 1-800-819-9001 or email at if you do not find answers at their web page on the DHEC website.

  • Online Advertising and Marketing Laws

Most of the laws affecting online advertising and marketing activity are enforced by the Federal Trade Commission (FTC).  The FTC protects consumers against deceptive and unfair advertising, no matter the medium.  All advertising must be truthful and not mislead consumers. The FTC features many different downloadable guides for businesses including “Advertising and Marketing on the Internet”, “.com Disclosures; How to Make Effective Disclosures in Digital Advertising” and “Marketing Your Mobile App”.

  • Online Consumer Privacy and Data Security

The FTC also covers many aspects of online consumer privacy such as protecting digital and physical data (see FTC guide “Protecting Personal Information; A Guide for Business”). The FTC is also charged with enforcing the Health Breach Notification Rule which applies to businesses that allow people to maintain medical information online.  Under this Rule, if your business experiences a security breach, you must a) notify everyone whose information was breached, b) notify the FTC, and in many cases c) notify the media. If you are building anything to be connected to the internet, you should take a look at the FTC guide, “Careful Connections: Building Security in the Internet of Things”.

Healthcare Information Privacy – The Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules govern medical providers and health plans. The Department of Health and Human Services, Office for Civil Rights (“OCR”) has responsibility for implementing and enforcing the HIPAA Rules with respect to voluntary compliance activities and civil money penalties.

Industry-Specific Laws and Regulations – Depending on the type of business you start, you will likely find there are additional laws and regulations to contend with. There are a handful of industries that are much more closely regulated; energy, transportation, utilities, medical, healthcare-related, etc.  You will need to do your research in the business planning stage to insure you know what you might face in a particular business.  The more regulation, the more expensive it will be to start and maintain, so be prepared.

  • Federal Employment Laws

There are numerous federal employment laws administered by several federal agencies that may affect your business. Two federal agencies, however, administer the majority; the U.S. Department of Labor (DOL) and the Equal Employment Opportunity Commission (EEOC).

The DOL administers and enforces over 180 federal laws, a handful of which you will have at least heard of; the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), the Occupational Safety and Health Act (OSHA), and the Employee Retirement Income Security Act (ERISA).  On the DOL’s website you’ll find the “First Step Employment Law Advisor” which walks you through the applicable laws, recordkeeping, reporting requirements and posters for your business.

The EEOC enforces federal anti-discrimination laws and regulations.  The EEOC’s Small Business Requirements Page helps you determine which federal anti-discrimination laws apply to your business according to your number of employees. For example:

If you employ at least one person – You are covered by the law that requires employers to provide equal pay for equal work to male and female employees.

In addition to the above, If you employ 15 to 19 people – You are covered by the laws that prohibit discrimination based on race, color, religion, sex (including pregnancy, sexual orientation, or gender identity), national origin, disability and genetic information (including family medical history).

In addition to the above, if you employ 20 or more people – You are covered by the laws that prohibit discrimination based on age (40 or older).

  • South Carolina Employment Laws

Below are brief summaries of just a few of the SC employment laws you should be aware of.  Please check with your attorney or HR professional to determine all applicable laws for your business:

 Employment at Will – a lot of people seem to confuse this term with “right-to-work” and it is not remotely the same. Employment at will simply means that if an employee is not contracted to work for a specific length of time, the employee or the employer may terminate the employment at any time, for any reason, or for no reason at all, as long as the reason is not against the law (as in the federal laws cited above).

Right-to-Work – South Carolina is a “right-to-work” state, which simply means that employees in SC cannot be required to join or pay dues to a Union. Specifically, an employer cannot require employees to join a union or pay union dues in order to obtain employment or to remain employed.

Job References – In SC, the law is different for references from former employers depending on whether they are given orally or in writing. The law gives immunity from defamation to former employers if these rules are followed, as long as they do not knowingly or recklessly give out information that defames the employee. If given orally, a former employer may only tell when the employee was employed, pay level and wage history. If a prospective employer requests a reference in writing and the reference is given in writing, the former employer may disclose 4 things (of which the employee must also be given access):

written employee evaluations;

official personnel notices that formally record the reasons for separation;

whether the employee was terminated voluntarily or involuntarily and the reason for the termination; and

information about job performance.

Wages and Hours – SC’s wage and hour provisions apply to all employers, except those who are only employing domestic help in private homes and those who’ve had fewer than 5 employees during the entire previous 12 months. Below are a few of the laws many employers seem to be less aware of:

You can only withhold from an employee’s wages deductions required or allowed by law or which you have given written notice to the employee of the amount and terms (in other words, if the employee purchases something from you and owes the business money, you can’t just decide to deduct it from their pay) C. Code §41-10-40

When an employee is “separated from the payroll for any reason” (could be a lay-off or termination, you must pay them their wages due within 48 hours of separation “or the next regular payday which may not exceed thirty days”. C. Code §41-10-50

When an employee is terminated, payment of “wages” includes vacation/holiday and sick leave payments due under the employment policies or employment contract (be careful what you put in Offer Letters as well)

SC goes by federal minimum wage (and actually has a law that prohibits the state from increasing the state minimum wage above federal)

Discrimination – SC mirrors federal law and adds an interesting protection for employees; “Smoker’s Rights” C. Code §41-1-85, which states that an employer cannot cite the use of tobacco outside the workplace as a basis for any personnel action such as hiring, firing, demotion or promotion.

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