5 Human Resources Tips For Small Business Owners

hr policies for small business

Therefore, all policies should be reviewed by experienced legal counsel prior to communicating the policy to employees. HR policies in your organization, you must first be aware of any regional laws relating to employee policies. Some may require employers to communicate workplace information to employees in writing.

How much does EAP cost?

The average annual per-employee cost of an EAP ranges from $12 to $40, representing less than one third of 1% of the average employers’ annual per-employee spending on health insurance at the high end of the market, according to reports by the Employee Assistance Society of North America and the Kaiser Family

Describe a specific process you will follow to ensure every employee is treated fairly when it comes to discipline. Have a lawyer review this information before you include it in your employee handbook to make sure all disciplinary action is legal. As your business evolves, you’ll no doubt make changes and additions to your employee handbook. Be sure to date every version when you do so, and to save copies of old versions. This is an added measure of protection against future lawsuits, when you may be required to prove you had certain policies and rules in place at a specific point in time. A broad spectrum of issues can be addressed in human resource policies, depending on the nature of the business in question. Creating compliant policies covering the HR laws applicable to your business is only half the job.

In the absence of specific stipulations such as this one, employers should implement policies that fill in the gaps, such as a policy that communicates company expectations and benefits. These policies address a company’s rules and procedures regarding holidays, vacation, sick, and other types of time off benefits, or leave required by law or company policy. Check your state and local law to ensure all leave requirements are included in your employee handbook. Human resources policies that are properly established and maintained can be advantageous to both the employer and the employee. The Encyclopedia of Small Business defines human resources policies as formal guidelines and regulations that businesses implement to employ, train, evaluate and compensate employees.

Small businesses–and especially business startups–can not afford to fritter away valuable time and resources on drawn-out policy disputes or potentially expensive lawsuits. Having a human resource policy in place from the start can help to avoid this situation. The latter ad hoc style is much more likely to produce inconsistent, uninformed, and legally questionable decisions that may cripple an otherwise prosperous business. Human resource policies are the formal rules and guidelines that businesses put in place to hire, train, assess, and reward the members of their workforce. These policies, when organized and disseminated in an easily used form, can serve to preempt many misunderstandings between employees and employers about their rights and obligations in the business place.

Labor Laws For Favoritism

It is tempting, as a new small business owner, to focus on the concerns of the business at hand, and put off the task of writing up a human resource policy. All business analysts and employment lawyers will advise a new business owner to get a policy down on paper, even if it is a simple one drafted from a boilerplate model. Having policies written is important so that it is clear to all what the policies are and that they are applied consistently and fairly across the organization. Without clearly written policies, the company is at a disadvantage. Although employers are free to create policies according to business needs, the policies must be written in compliance with pertinent employment laws. This can be more complicated for multistate employers because it is critical to ensure that policies do not conflict with more than one set of state employment laws.

If the company has no control over how the worker does their job, the worker is a contractor. If the business doesn’t control the finances of the worker like when they’re paid or if expenses are taken out of their pay, that person is a contractor.

  • It is tempting, as a new small business owner, to focus on the concerns of the business at hand, and put off the task of writing up a human resource policy.
  • Having a human resource policy in place from the start can help to avoid this situation.
  • Human resource policies are the formal rules and guidelines that businesses put in place to hire, train, assess, and reward the members of their workforce.
  • The latter ad hoc style is much more likely to produce inconsistent, uninformed, and legally questionable decisions that may cripple an otherwise prosperous business.
  • Small businesses–and especially business startups–can not afford to fritter away valuable time and resources on drawn-out policy disputes or potentially expensive lawsuits.

If you have any drug-testing procedures in place, such as random testing, for-cause testing or post-accident testing, be sure you define them clearly. Some small businesses will classify workers as contractors when they should be classified as employees. The IRS has targeted small business owners in the past to check on employee records and see if they’ve been mis-classified. Understand what makes a worker an independent contractor versus an employee.

Hr Regulations All Small Businesses Need To Know

Company policies are most often included in employee handbooks. You can also provide updates to company policies through additional documents or via email. Most companies typically have their policies available to employees online as well, usually through the company’s intranet. Unless the policy indicates otherwise, company policies can be legally binding for employees under certain circumstances. For example, an employee could be tried legally for their actions in the workplace, such as committing fraud or sexual harassment.

hr policies for small business

Clearly defined HR policies help prevent misunderstandings about the employer and the employee’s role and rights in the workplace. If a court dispute occurs between the employer and the employee, the employer is at a disadvantage if he doesn’t have a sound human resources policy. It is not uncommon for a small business to lack an established human resources department or personnel. However, small business owners should still educate themselves on the federal and state employment regulations that apply to employers and adopt human resources policies. Human resources policies are intrinsically linked to the labor laws that the federal and state labor boards enforce.

Subjects Covered By Company Hr Policies

For example, if certain chemicals are present in the workplace, a company should have a hazard communication program as part of their health and safety policy. They have a huge effect on the culture and environment in your workplace, setting the tone for how employees communicate, settle disputes, and work with each other. Some small businesses prefer to outsource a large component of human resources, but there is no getting around human resources completely. Although federal and state laws don’t require you to create an employee handbook or put all your policies in writing, doing so makes sound legal sense. An online company policies or employee handbook tool is a smart way to keep your rules and guidelines accessible. The Americans with Disabilities Act , requires companies with 15 or more employees to provide certain accommodations for workers with disabilities to allow them to perform their jobs.

How many employees do you need to have an HR department?

As your business grows in services and in numbers, the need for an HR department will grow concurrently. Generally, industry reports recommend hiring a full-time human resource staff member at around 40 employees.

Some of the most important company policies involve discipline and employee conduct. Before you can hold your employees accountable for their actions, it’s important to record your expectations in terms of performance and behavior in your employee handbook or individual employee contracts. With complete access to the rules and regulations of the workplace, you can then enforce disciplinary action when appropriate while using the employee handbook as a point of reference. An equal opportunity policy prevents companies from discriminating against job applicants or employees if they are a member of a protected class (e.g, race, gender, age, religion, familial status, color). The EOP is essential for any anti-harassment, workplace violence, non-discrimination or diversity policies your company may consider developing. When an organization has clear company policies, both employees and employers benefit.

For example, 56% of these small businesses did not have a formal weapons policy in the workplace, and 47% did not have a social media policy. With great human resources, you will increase your company’s chance at success by creating a workplace environment that keeps your employees coming to work each day, and happily so. In today’s workplace, many employees use their own cell phones, tablets and laptops both on and off the job. While allowing employees to bring their own devices can reduce costs, it also creates potential security and legal compliance concerns. Protect your company with a well-written policy that outlines the boundaries or security features you require, as well as procedures when employment ends. HR for small businesses can be confusing, but have the right employee handbook shared with all new employees.

Make sure your company policy defines disabilities and states your intent to comply with all applicable laws under the ADA. Spell out how requests for accommodations should be made, including what information you require and to whom requests should be submitted. Several federal laws require employers to protect workers from workplace harassment and discrimination. Today, this goes beyond the traditional language that prohibits discrimination based on race, color, national origin or gender, and it may include sexual orientation, gender identity or age as well. Make sure your employees know that discrimination is illegal when you’re hiring, providing job assignments or offering promotions. Clearly define the types of actions that are considered discrimination or harassment and what your policies for infractions are. Include specific provisions for how to report behavior that violates your policies and a statement that ensures reporting such behavior is protected.

hr policies for small business

A drug-free workplace policy should strictly prohibit the sale, possession and use of illegal drugs or alcohol when an employee is on the job. It should specify the types of forbidden substances and conduct as well as the consequences for violating the policy.

Even in states where concealed-carry weapons are legal, employers can prohibit employees from carrying weapons into the workplace premises or making threats against other employees. In fact, under OSHA and various state laws, you are obligated to protect employees from workplace violence. Be specific in your policy and define what actions are restricted — from verbal threats to shoving — as well as the types of weapons not allowed on work premises, such as knives, guns or other firearms. Keep in mind that, in many states, firearms are allowed in locked vehicles in the parking lot, regardless of workplace restrictions. With new laws in many states that legalize marijuana for medicinal or recreational use, your drug use policies may need updating.

Make sure you’re not overly friendly with workers, and know all the HR laws that impact the business. There are requirements for overtime, the amount of wages and standards for workers under a certain age. You’ll have to know all of the laws relevant to your business to make sure you’re staying within the laws and guidelines relating to human resources. Many mistakes are made by small business owners because they don’t know the laws. One of the biggest laws that employers should understand is the Fair Labor Standards Act. A simple step-by-step list of what happens regarding disciplinary action can make it easy for employees to know what to expect if they violate a company policy.

As noted earlier, HR compliance is a combination of policy and practice. These are the three most common issues that hinder a company’s efforts to create a culture of HR compliance. To create HR compliance, you’ll need a human resources process for each of these areas. As your workforce grows, new laws apply, so you may need to adapt your policies over time to stay compliant. These policies describe the safety and emergency procedures of the workplace and require employees to report any work-related injuries immediately. There are several regulations under the Occupational Health and Safety Act that require employers to have specific policies in place if certain workplace hazards exist.