Growth Problems to Avoid: HR Nightmares

For many small business owners, hiring, monitoring, managing and evaluating employees can feel like a full time job.

Even seemingly minor mistakes may be expensive and time consuming for employers to resolve. I know, I’ve been fined over $20,000 for dumb HR mistakes.

With some advanced planning, thorough record keeping and the help of your LegalShield provider law firm you may be able avoid some common HR mistakes. If you don’t have LegalShield, contact me RIGHT NOW and ask me about it!!

1. Carefully vet your new hires. Always take the time to review employment history, contact references and interview all new hires. Avoid hiring someone as a favor or simply because they are a friend or family member. Make sure they are qualified for the position and are a good fit for your business. It is also your responsibility to verify that the employee is a United States citizen or is otherwise eligible to work in the U.S. The U.S. Small Business Administration offers details on what to do when hiring your first employee.
2. Properly classify your workers. One of the most common HR mistakes involves the incorrect classification of workers. This is where I screwed up. The first determination to make is whether the worker is an employee or a contractor. Once you have determined that a worker is an employee you must also determine whether or not they are exempt from wage and hour laws established by the Fair Labor Standards Act (FLSA). The FLSA also governs the payment of overtime, which is a frequent point of contention in labor disputes. The DOL offers valuable information on employee classification via their website. Some states have additional wage and employment laws. Contact your LegalShield provider law firm if you need more information on the laws where your business operates.
3. Develop and implement an HR policy handbook. Even if you only have one employee, your business needs an HR handbook. A well-written HR handbook will help protect you from litigation. Your handbook should cover topics such as benefits, time away from work, harassment, non-discrimination policies and workers’ compensation. Provide each employee with a copy of the handbook and have him or her sign a document stating that it was received. Click here to read more about creating an employee handbook that your employees will actually use. If you need assistance reviewing or developing your company’s employee handbook contact your LegalShield provider law firm. Yes, LegalShield even helps you with your employee handbook!
4. Keep employee records accurate and up to date. A lack of documentation can be a nightmare when an HR dispute results in litigation. Maintain a file containing the employee’s original application or resume, I-9 document verifying identity and eligibility to work in the U.S., letters of reference, job description, signed receipt of employee manual, benefit information, performance evaluations and disciplinary actions. In addition, you should carefully track employee hours and wages. Though not every business is required to follow the Fair Labor Standards Act (FLSA) you may want to review the Department of Labor Wage and Hour Division fact sheet on recordkeeping requirements. Contact your LegalShield provider law firm If you are unsure if the FLSA guidelines apply to your business.
5. Follow changes in the law. Wage, hour, workplace safety and the other laws governing you and your employees are subject to change. It is important to follow changes in both local and federal legislation. The U.S. Department of Labor (DOL) Wage and Hour Division website has information specifically targeted to small business owners. It is important to periodically review your policies with employees and document the date and time of the review.
6. Address specific concerns as soon as they arise.  It is vital to discuss matters when they happen instead of putting them off or waiting for a review. Waiting may make the issue seem trivial or catch the employee off guard. It is vital that you document all of these interactions in the employee’s file. Should you need to terminate an employee these records will help protect you from potential claims of discrimination or wrongful termination. If you don’t know how to do this, or where to start, talk to a LegalShield representative
7. Put checks in place to protect against employee theft. No one employee should have total control or oversight of any area of your business. This is particularly important for accounting and merchandising. Develop multi-level checks and balances. Beware of the warning signs of employee theft such as employees that frequently volunteer to work outside of normal business hours and do not take vacation. This may seem like a positive attribute, but it may mean the employee wants to be unsupervised to facilitate theft. Beware of employees who resist procedural changes or avoid oversight of their work. Drug and alcohol abuse, gambling and high levels of consumer debt are also warning signs to monitor. Follow up on your suspicions in a reasonable and professional manner. Contact your LegalShield provider law firm to learn more about legal options for recovering stolen property.
8. Call your provider law firm. Employment regulations can be complex, involving state and federal regulations. Emotions can also run high when dealing with difficult employees. Repairing damage after something has been handled improperly is difficult so it is important to do things the right way from the start. Do not hesitate to call your LegalShield provider law firm and ask questions.

If you do not have LegalShield, you’re open to a lot of troubles down the road. I can help you protect your business, I will show you how LegalShield will work to protect your business!