Updated: Feb 17
Entrepreneurs are brave visionaries investing in themselves and their ideas to create something from nothing. To honor those individuals, November was declared National Entrepreneurs Month and the third Tuesday, Entrepreneurs Day. As I was thinking about my blog post for November, this special day was staring me right in the face, providing a wonderful opportunity to share some of my tips for making the complicated task of running your own business run smoother.
Following is a list of items that business owners should ensure they have implemented at their companies. To view 5 more checklist items visit here to download your own copy! This list is just the beginning to be sure companies reduce the risk of having employees.
Many variables come into play when deciding which policies, procedures, forms, and HR staff to include in your company. This list will help get you started and could also be used as a plan to move forward as your company grows.
1. Who is your designated “HR” person? This should be someone the company and employees trust and has a general knowledge of the human resource function. In a smaller company this is often the bookkeeper, accountant or operations manager. After the company gets to about 35-50 employees, one person should be designated as the HR manager and function in the role on a full-time basis.
Potential Consequence: Simple employment law requirements can be missed if one person is not designated as the gatekeeper of the employment documents. Fines for missing paperwork can start at $230 for an incomplete or missing Form I-9 and quickly rise to the $1,000’s for multiple mistakes or missing forms. In addition, without one assigned “hr” employee, consistent application of company policy across the organization can be hard to achieve, which opens you up to discrimination or wrongful termination lawsuits.
2. Do you have employment or HR policies or an employee handbook? A small company does not need a 50-page employee handbook. No company, for that matter, needs a 50-page employee handbook. But all companies need to have some basic policies and procedures developed and outlined. There are two key factors. First, ensure compliance with all laws and regulations (local, state and federal). Second, answer some of the employees’ questions before they get asked. For example, outline a PTO policy before hiring your employees. If you don’t you can end up with 10 different employees with 10 different PTO plans. At some point, when you develop your own company’s plan, you will make some employees happy and upset others.
If you do have an employee handbook, when was the last time you updated it? If it has been more than 12-18 months, it is probably out of date and may not be in compliance with the ever-changing employment laws.
Potential Consequence: Lack of an employee handbook can lead to inconsistent application of practices in the company. In addition, not having an employee handbook may make it harder to hire an employee into a new company. The employee handbook can show that the company has organization and stability. Finally – an out of date handbook can become a liability if it is inconsistent with current employment law or company practices.
3. Do you have accurate job descriptions and are you paying your employees overtime when required? The number one reason for employment-related lawsuits is wage and hour issues. Proper job descriptions can be the first step in accurately identifying what employees are actually doing on the job. Keep in mind however that how you pay an employee is based on what they do rather than what their job description says they do.
Potential Consequence: Nearly 80% of the employment-related lawsuits filed in recent years have been wage and hour related. Companies that don’t review their compensation practices put themselves at greater risk to costly audits and lawsuits. Currently, 40% of the wage and hour cases filed nationally have originated in Florida.
4. Do you know what questions to ask in an interview? Too often untrained supervisors will ask both ineffective and illegal questions in a job interview. Not only can this run your company into legal hot water, but it may result in hiring the wrong employee for the job.
Potential Consequence: Asking ineffective questions in an interview can lead to increased turnover and greater expense for the company as they try to find the right person for the job through trial and error. Asking inappropriate or illegal questions can find the company defending themselves against a discrimination lawsuit or responding to an EEOC investigation.
5. Do you have a documented Family Medical Leave Act Policy in place and have your supervisors been trained on the policy? If you have 50 or more employees in your company, you may be required to adhere to FMLA. A key responsibility of an FMLA policy is the understanding of supervisors to recognize when an employee may be eligible for covered leave.
Potential Consequence: Not only can a company be sued, but a supervisor can be personally sued for violating an employee’s FMLA rights. In addition, a company that is too flexible or liberal with their policy can get into trouble when they finally decide to tighten the reins.
With the ever-changing political and employment environment, regular changes to employment law should be expected. In addition, enhanced and focused enforcement is becoming the norm for companies of all sizes. The continued increase in investigations will result in more workplace audits of employment practices and policies. Do you want your first audit to come from the government?