Often times, small business owners might overlook the one basic business foundation that can actually get them into serious trouble if not done right—human resources compliance.
Maybe you don’t have enough resources available or maybe you’re trying to save money by having an administrative staff member take care of it as a secondary job. Even just the term human resources compliances could be enough to overwhelm you and cause you to ignore it altogether.
Preparing yourself and educating yourself for these challenges proves to be essential in running a smooth business (and keeping money in your pocket).
Consider the following to be a general small business checklist for human resources compliance:
This bans the discrimination in all phases of employment by employers on the basis of race, religion, color, sex or national origin. (This applies to employers with 15 or more employees.) Title VII also prohibits employment decisions based on stereotypes and assumptions about abilities, traits or the performance of individuals of certain racial groups.
Title VII prohibits the harassment of employees. As an employer, you are required to take appropriate steps to prevent this and your employees should know the appropriate procedures for reporting such issues.
Bottom line: Your company should provide adequate training and strong written communication regarding these practices.
2. Other HR Policies Not Being Followed
The above mentioned act is just one of a plethora of policies that all employers must follow. For example, do you know the regulations of the Family Medical Leave Act for your state? Or how about the Occupational Health and Safety Administration? Chances are, if you don’t have an expert in the human resources field on your staff, these laws could get overlooked.
Without proper guidance on these regulations, your small business could see significant consequences. This blog post here provides all the guidelines for businesses with 1-14 employees.
3. Data Entry Errors
Accuracy is key when it comes to doing any job effectively—especially when it comes to human resources. With every new hire comes new paperwork and with new paperwork comes the need for data entry.
As a small business, you might not have access to online services and you have to deal with hard copies of I-9 forms, W-4s, 401(k) enrollment and other benefit-related bookkeeping. These documents are transferred to different departments, and are entered by humans, thus putting them at risk for administrative error.
Two weeks into their employment and your new hire is being deducted the wrong amount for taxes...it's no surprise that this will cause headaches for you and the employee.
4. Misclassifying Your Employees
It is pertinent that you know the difference between contract workers, full-time and part-time employees. Familiarize yourself with the classifications and stay in accordance with the U.S. Department of Labor’s guidelines as well as the IRS.
By enforcing these clear job definitions, you will not only be in compliance with the law, but each employee should better understand what they are accountable for. One other important note-don’t classify employees as contract workers just to save on benefits!
Legislation is constantly evolving which constitutes more pressure for your business to stay on top of the law. Do not be afraid to ask for help. Outsourcing your HR to a proven expert, like PrimePay is the easiest way to dodge these potential catastrophes.
Please note that this is not all inclusive. Our guidance is designed only to give general information on the issues actually covered. It is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion. Consult your own legal advisor regarding specific application of the information to your own plan.