Three HR Tips That Can Save Your Business

As entrepreneurs, we focus on growing our businesses and making sure the bottom line is positive. However, paying attention to some important HR rules can also help you save your business. In the years I have been involved in HR, it has broken my heart to see businesses be unfairly sued or closed down for simple, preventable issues.
Whether you have 2 employees, 20 or 200, HR is the necessary evil that is essential for ensuring that employment lawsuits are avoided or that you are equipped to protect yourself, because as the business owner, we are ultimately responsible and accountable for managing our people.

Over the years of servicing our clients in all industry types, we see the same HR issues surface. Here are three tips that will limit your employment-related liabilities.

Know the employment laws based on your company size.
What we don’t know CAN hurt us. There are 16 different federal labor laws that apply to companies who have 1-14 employees. Add another 7 once you get to 50 employees. Depending on the state which you’re in, there may be additional state-required labor laws that must be followed. If you have employees in different states, the laws may be different.

HR compliance is the area most commonly ignored area by small businesses because it is complicated and boring to most. However, if it goes unaddressed, there might be some serious consequences. Employers may be subject to fines, penalties, attorney fees, loss of reputation, negative publicity, and ultimately, loss of the business.
For more info on this topic, check out some of the resources on our website.

Hire legal employees and be ready to prove it.
The Immigration Reform & Control Act requires employers who have at least one employee to collect information regarding an employee’s identity and employment eligibility and document that information on Form I-9.
There are specific requirements for completing the form and documents that are required. Employers who do not have I-9’s on file or who have not completed the form correctly as requested, are subject to fines and penalties from the Department of Homeland Security (DHS). In most cases, DHS can show up at your place of business and present an Inspection Letter which requests employers to provide all active employee I-9 forms, as well as forms for terminated employees. Fines for not having the I-9 forms, having technical errors or for willfully hiring employees without the proper documents range from $1,100 per form to freezing of company assets and imprisonment of ownership.

Set clear expectations for your staff.
When you are ready to hire employees, clarity is essential to attracting and retaining top talent. Employees that are A players, want to work for an organization that is well-run and clear about its mission, vision AND expectations, regardless of size. Below are some recommendations:

Have an Employee Handbook
Once you reach 5 employees or more, it’s important to make sure you have policies and procedures in place.
An Employee Handbook is actually the most important legal document after your company’s business plan. It can save you thousands of dollars in attorney fees by simply communicating the policies and procedures of your company. It also needs to be developed based on the number of employees you have and as your team grows, policies and procedures need to be added or revised. Be sure that the policies and procedures you implement are those that you plan to follow and will hold your employees accountable to.

Communicating simple policies such as the orientation period, hours of work, absenteeism, disciplinary process, workplace harassment, ways of communicating and to whom, paid time off benefits, and compensation practices are just a few examples of policies that if done right, can protect you from employee issues.
There are some great online resources to help you get started with your handbook. However, it is important to make sure you have one specifically tailored to your business that applies to your corporate culture, goals, and overall vision.

Conduct an Orientation for all new employees
Don’t underestimate the power of a new employee’s orientation period, which is usually conducted within the first month of employment. This will reduce stress (on the employee and you), anxiety and confusion when that new person is trying to learn all of the facets of your business, including the rules and available resources. A proper orientation will allow them to get a jump start on getting the job done right while also making them feel welcomed and a part of something bigger.

Communicate effectively
The majority of all HR issues within companies is COMMUNICATION. We don’t do enough of it and it gets us in trouble, every single time. Be clear about your company’s goals, philosophies, rules, language, culture, and expectations. Don’t assume your employees know what you want from them. Not only should we be communicating verbally on a consistent basis, but we should also communicate in writing as well.

When problems arise, speak to your employees. If they don’t change their behavior, put it in writing. This will usually get their attention and resolve most issues (this process should also be identified in your Employee Handbook, by the way). By having properly written documentation, you have the tools to protect yourself should you ever be involved in a labor-related claim.

You can also use written communication to praise them – perhaps send them a note with kudos and copy their immediate supervisor. Seeing your praise in writing can go a long way to motivate your team.
Trust me. I understand that HR can be quite complicated, takes a lot of time to do it right, and for most of you, it’s not fun. However, by following these simple tips, you can have a stronger workforce that is motivated and ready to help you grow your business.