Small Business Advisor Alert
Setting Up Shop to Avoid HR Nightmares
Setting up a small business carries a number of risks. Will the product or service be well received by the public? Will you be able to meet overhead? How about a business plan? What marketing choices will you make to ensure the widest views and responses? Will the venture be profitable? And let’s not forget, what will you do with your staff and how will you ensure you have the correct HR policies and procedures in place so as not to run afoul of the increasingly complex labor and employment laws as you build your business. With that in mind, here are some tips for keeping your start up business out of HR trouble:
- Train, Train, Train! There is nothing more important than making sure those in charge, (Managers or Supervisors) are well trained in understanding and responding to situations that involve harassment and/or discrimination issues. Through proactive training, start ups can ensure that unnecessary litigation or claims of discrimination can be avoided at all costs. The time, energy, and money involved in these types of claims makes training a bargain at any cost.
- Handbooks are Essential: All employers, no matter what size, should create and maintain an employee handbook so that employees are aware of the company’s values, policies, procedures and expectations. A well crafted handbook not only lays out expectations and company guidelines, but, in many instances, can serve to comply with various legal and regulatory requirements by communicating certain information to employees.
- Ensure an Open Door Policy and Complaint Procedure: A complaint policy acts as a mechanism to ensure incidents of harassment, discrimination, mistreatment or unequal treatment have a venue for resolution. All actions should be well documented following a complete and thorough investigation. By having such a complaint mechanism in place, an employer can work to head off a complaint before it blossoms into a formal regulatory Charge or lawsuit. Additionally, having an open door policy can work to avoid union interference if employees believe their concerns are not falling on deaf ears.
- Classify and Pay Employees Correctly: There is nothing worse than misclassifying an employee (“exempt” v. “non-exempt”) and then failing to pay the correct wages. Merely placing someone on a “salary” is not determinative of whether they should really be paid hourly and thus entitled to overtime for hours worked over 40 in a single work week. While certain positions may be considered “exempt” from the overtime laws, there are very narrow exemptions that must be strictly adhered to. A wage and hour claim is one of the most costly mistakes a business can make. Similarly, misclassifying an individual as an independent contractor as opposed to an employee can have disastrous consequences for unemployment issues and certain tax issues as well.
- Document, Document, and Document Some More! There is an adage in the employment world that “if it isn’t written down, it didn’t happen!” Employers must document all employment decisions (those related to hiring, firing, promotions, wage increases, discipline etc.). This documentation must occur as close in time to the actions as possible to avoid claims of “creating a paper trail” to cover things up. A well documented actions can also serve to blunt claims of discrimination by showing a legitimate, non-discriminatory reason the action was taken. Documentation can also serve the purpose of placing an employee on notice as to a particular performance issue and allow the employee the opportunity to correct the behavior. There is nothing worse than “ambush management” where something is sprung on an employee for the first time in writing when the problem has existed repeatedly in the past with no warnings.
Most business owners are concerned, and rightfully so, with growing their fledgling business. Pursuit of success is paramount. However, by taking the time to engage qualified legal counsel at the outset to help set up those very important HR systems, an employer can rest easier and focus on building the business rather than worrying about HR nightmares. We have developed a comprehensive Employment Practices Audit© which we offer to all our business clients for just this purpose.
With over 33 years’ experience in advising employers and employees on workplace issues, let Boznos Law work with you to ensure you are ready to meet the challenges posed by the changes to the employment laws. Call Bill Boznos today at (630) 375-1958 or contact us at www.boznoslawoffice.com/contact-us through our website.