Who said starting a small business was easy? In this day and age, there are so many p’s and q’s, dotting the i’s and lower-case j’s and crossing the t’s, that could make your mind explode. Small businesses are no exception and one headache facing business owners is human resources.
Without a doubt, you’re looking at a big undertaking to ensure the human resources for your business are properly managed. Think about it. If your employees aren’t regularly getting their paychecks, or your benefits aren’t received correctly, or your employees don’t have the proper training to do their job, your company isn’t going to last very long.
The key to successfully managing HR is to keep in mind these common mistakes — and do your best to avoid them.
1. Your employee handbook isn’t complete
Most companies have one in some form or another, but employee handbooks are infamous for being incomplete and outdated. This one book can be considered a corporate bible. If your book is not written plainly and does not cover all the policies and procedures you want your employees to follow, then your employees will struggle.
Their struggle will become yours as you try to establish your company culture and manage your employees.
2. You aren’t managing your tax obligations correctly
Who doesn’t stress over dealing with taxes? There’s a reason Benjamin Franklin labeled it next to death.
So as a small business owner, you have to make sure you classify your employees correctly. Improperly registering your employees with the IRS could result in serious consequences for you and your worker. In addition, make sure to keep a copy of every employee’s W-4 and I-9 form with updated social security numbers, names and addresses with your records. It will ensure smooth sailing and reduce the time spent wading around old documents in the event of an audit.
3. Labor laws - they change, they come from everywhere, they are important
Honestly, labor laws can make taxes look like a cakewalk. It’s no surprise that small businesses out there can mismanage the issue of ensuring their business is operating legally – municipally, statewide and federally.
You might have a business where you can hire individuals below the age of 16. Be sure you don’t schedule those kids during school sessions, because federal law prohibits that. That’s just one example of how you need to monitor the laws and ensure that you adhere to them. Specifically, there are three aspects of labor laws you need to keep watch over:
Child Labor Laws
Non-Resident Labor Regulations
Equal Rights and Americans with Disabilities Legislation
These aspects of legal issues for your business can cause you and your company grief. If you have any doubt at all about whether what you are doing is legal - ask a professional.
4. Overtime can be plenty confusing
Even large corporations can have trouble with this. Why? Because even employees may end up not paying attention to just how many hours they work per week. It requires a lot of math. Who here hated math back in school?
Here’s an example of how overtime can be utterly painful. California, specifically, requires time and a half payments for hours worked over 40 as well as hours worked over an 8-hour shift per day. Additionally, double time is allowed for employees working over 12 hours in one day. So, let’s say you have an employee who worked 46.5 hours in one week, working one shift of 10.5 hours, and another on another day for 13 hours.
You do the math.
And to make it more of a headache, this labor law of overtime not only applies to hourly employees —but could also apply to independent contractors. Be sure you know the legal description of independent contractor and that all the parameters are met.
5. “This was not in my job description”
It is, of course, a given that an employer would naturally assume that the job should be done correctly. But how can your employees do their job correctly if they don’t know what their jobs are? Vague job descriptions can heavily penalize business operations. You have everyone stepping on everyone else’s feet, criss-crossing, looking confused. And in the midst of that chaos, nothing in your company is getting done, and before you know it, you fold completely. Remember, if it’s nobody’s job, it doesn’t get done.
Before you get those new job postings up, sit down with your HR team and write succinct, clear and defined roles. Make sure your potential candidates know exactly what it is they’ll be doing in your office so that there’s no confusion whatsoever.
Common details include:
They’re simple; and that’s what makes them so dangerous. Give yourself and your business a boost by staying current with the rules and regulations. Give us a call. We’re happy to help. More importantly, just make sure you dot that ‘i’.
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