As a small business owner, how much thought do you give to human resources (HR) compliance? Probably not a lot and that’s not uncommon if you only have a few employees. There are legitimate reasons why you haven’t felt the need to spend time on HR, but there are even more compelling reasons why you should.
I’ll be the first to admit that the chances are slim to none that someone from the state or federal government will draw your company’s name out of a hat and decide to audit your employment practices. It’s not a big secret that the government is severely understaffed for this type of activity. The people they do have are quite busy with much larger corporations. But does this mean you can just close your eyes to HR compliance and run your business in any manner you choose? The answer depends on how much risk you like to take. Are you willing to risk lawsuits or fines that may seriously damage your business?
For most small business owners, your success depends on your employees. While that may be a scary thought if you haven’t hired good employees, it is a fact. Every person who has started a business comes to the realization that, for continued growth, help is needed at some point. Although a better way to phrase that may be that at some point you realize your time could be better spent on building the business instead of on work that can easily be done by others. Employees are a great resource; they are often your biggest resource. However, as a small business owner, your employees are also one of your biggest legal risks.
The harsh reality is that, particularly in California, employees are more aware of their rights than ever before … and employees are more litigious than ever. What this means to you is that an employee can draw the government’s attention to your company with a simple phone call.
That employee who doesn’t feel they are paid fairly? A call to California’s Department of Labor could easily start an investigation of your pay practices. That employee who laughed with the group over that joke with sexual overtones? You could be faced with accusations of sexual harassment. Employees have easy access to authorities who will can start an investigation. What can you do to protect yourself and your company? Think HR.
I want you to think about HR in a different way than perhaps you have in the past. It really wasn’t designed with the purpose of driving business owners crazy. Personally, I’ve always thought of HR management as a tightrope; keeping the balance between what employees want and what the company can provide. The first step in this process is making sure the employees know the rules. After all, you can’t expect them to do something or act in a particular way if you haven’t told them what it is you expect. Yes, I’m a huge advocate of employee handbooks.
However, not just any employee handbook works. You need one that is personalized for your company. It must have specific language that makes it clear what you want, such as calling in an hour before the shift starts if they will be late or absent. I’ve seen too many handbooks that merely tell the employee to call in as soon as possible. And I’ve known employees who feel that is two days later.
Providing specifics in writing can serve you well in two areas. First, it gives the employee a reminder of your policies in writing so there is no opportunity for misunderstandings. It’s hard to discipline an employee for not behaving in a particular manner if you don’t have any written documentation that they were told it was expected. Having your policies in writing saves everyone a lot of time. Second, it also gives your supervisors information about what legal rights your employees have and how your company handles any issues. You don’t want an unexperienced supervisor doing the wrong thing with an employee. Written policies can help a new supervisor learn the ropes of management and legal compliance.
The bottom line is that an employee can be your best friend and resource … until they feel they aren’t being treated fairly. Then they can be your worse nightmare. This is one of those times where you need to put resources in place that help your business and, ultimately, save you a great deal of time and trouble.
