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8 HR Basics you need to know!

Your business is moving fast, and there never seems to be enough time to get everything done.  Sales, marketing, operations, service delivery, and financial obligations are all critical to your business.  However, most of these activities are not possible without employees to perform tasks and responsibilities to support your success.  Whether you are a business owner or an HR Professional, we recognize in our client engagements and through our professional associates in industry that all too often a company forgets the basic HR activities.  This month we refocus our readers on the critical nature of basic HR practices to improve your workforce and risk management practices to achieve compliance, minimize liability, and improve ROI.

  1. Federal and Local Laws – Your business must adhere to a variety of federal regulations that are often directly related to the number of employees in your workforce. Becoming a constantly moving target are the state and local regulations that impact a plethora of employment practices from leave management and minimum wage to overtime requirements and recruitment practices.  Staying current and compliant is an ongoing challenge, and ignorance is not an effective defense when litigation reaches your inbox.
  2. Payroll – From the moment you hire that first employee your business has new obligations related to compensation practices. With this new excitement of having employees come the risks associated with improper pay practices, failed tax filings, missed withholdings, and more.  It is highly recommended to allow subject matter experts support your business by outsourcing your payroll.  This approach allows experts with the technology and compliant practices manage your payroll and tax filings while you focus on your business.  When selecting a vendor, choose wisely or get help in your selection process because not all payroll vendors are created equally.  While many providers will be the appropriate solution, others will become costlier and offer or provide you far more than you desire or need, increasing your costs far beyond what they should be.
  3. Employee Handbook – They may not be organized in an employee handbook; however, every organization has policies and procedures that surround everything that happens in your workforce. Unfortunately, failing to appropriately document all your human resource policies and procedures can expose your business to significant risk and liability.  An employee handbook is a proactive strategic document that establishes what the employer expects from the employee, and what the employee can expect from the employer.  This document is also the communication and training tool used with all new and existing employees on employee rights, mandatory notices, and appropriate procedures for addressing workplace issues.  If you don’t have a set of policies or you have not updated them in years, it will serve you well to ensure you have the right protections in place to protect your business and manage your workforce.
  4. Personnel Records – It is one thing to believe you are doing everything appropriately. It is another to be able to properly defend and prove your employment practices were an enforcement agency audit your company.  Establishing legally compliant personnel records is just as important and necessary as the employment practices themselves.  Protecting employee data, medical records, and personal information are critical responsibilities of the employer.  It is easy to allow such a simple aspect of workforce management to go ignored, however when the time comes to defend your personnel activities you will wish you set up your personnel records and record retention schedules long ago.
  5. Workers’ Compensation Insurance – This insurance is a requirement in just about every state in the United States, and the requirements and obligations differ from state to state. The obligations range from number of employees to the employer’s industry.  Beyond just having the insurance in place, it is equally important to understand what the coverage provides, the types of claims available (Report Only, Medical Only, Lost Wages), what your third-party administrator needs when a claim is filed, and what internal procedures should be performed to properly document or defend a claim.  If you haven’t documented, communicated, and trained your workforce on how to handle a workplace injury or illness, you are exposing the business to unnecessary risk and liability.
  6. Recruitment – Obviously you don’t need to worry about a workforce until you hire your first employee. However, we you do perform hiring activities are you confident the practices are compliant?  There is a myriad of risks inherent in the recruitment process, from the posting and employment application to the interviews, offer and hiring activities.  If you are fortunate enough to hire a qualified applicant, you then have responsibilities when the employee starts to include work authorization verification, new hire reporting, orientation, and ultimately onboarding and training.  To avoid compliance risks ensure you have the entire process documented and maintain your records appropriately to defend your actions.
  7. Benefits Program – The best companies master developing a comprehensive benefits program that is both economical for the business and the employee. You want to design a rich benefit offering that is easy to administer and manage, and even easier for the workforce to understand.  Engage the workforce periodically to see if there are different benefit options that would be valued over others in place.  Ensure your benefits broker is proactive, provides the highest level of customer services, and is available to respond to and resolve workforce inquiries.  Ask your current broker about employer sponsored plans and employee paid voluntary offerings that can improve talent acquisition and employee retention.
  8. Risk Management of your Employment Practices – Everything you do with the workforce must be executed in a fair and consistent manner.  Documentation is a key contributing factor to defending your actions.  However, without establishing consistent policies or procedures you won’t create the necessary documentation to support or defend any of your personal activity.  The most common phrase small business owners share is “I haven’t gotten sued or audited yet so why should I care about any of this?  I will take the risk!”  This is certainly a factual statement for many small employers.  The problem with this approach is it establishes a reactive business model to protect the company.  If you compare this practice to how you manage every other aspect of your business strategically and proactively to achieve your goals and success, you might decide to reconsider.  If nothing else, recognize the disparate approach to such a critical factor of your business success.