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The 5 Biggest HR Mistakes Made By Small Businesses

 Dec 23rd 2014       Human Resources Articles

Common HR Mistakes Made By Small Businesses

If you thought running a small business was easy, think again. In this day and age, there are so many laws to keep up with and follow, that it puts a tremendous amount of pressure on small business owners handling it all themselves.

One particular pressure plaguing these business owners is managing their own human resources. If your employees aren’t regularly receiving their paychecks, problems aren’t being addressed appropriately, or employees don’t have the proper training to complete their jobs efficiently, your company is less likely to succeed.

The best way to ensure HR success is to keep these common mistakes in mind – and to avoid them completely.

1. The Employee Handbook Isn’t Complete

Most companies have an employee handbook, but they are often infamous for being incomplete and outdated. The handbook should be considered the corporate guide, and if all of the chapters aren’t written accurately, standards will be hard to uphold and follow.

2. Blowing Off Your Tax Obligations

Taxes are a common source of stress for everyone, especially small businesses. Although the paperwork can be monotonous, it’s important that you make sure you’re classifying employees correctly. Improperly registering them with the IRS could end in paying additional taxes at the end of the tax year. Keep copies of all W-4 and I-9 forms with social security numbers, names and address in your records. This ensures that if you get audited, you’ll have most of the documents needed already compiled.

3. I Fought The Law…And The Law Won

Small business owners often forget that their business must operate legally on the municipal, state and federal levels.

The Holy Trinity of labor laws includes:

  • Fair Labor Standards Act (F.L.S.A.)
  • Occupational Safety and Health Act (O.S.H.)
  • Equal Employment Opportunity (E.E.O.)

Failing to understand and follow these three concepts can spell disaster for your business. Want more explanation on each of these? Contact us!

4. Overtime or Over It?

If you’re dealing with recurring overtime and considering putting your employees on salary, consider this: The Fair Labor Standards Act directs how people get paid according to overtime regulations.While there are some exemptions, it’s important to know that these laws apply to hourly and salaried workers. Avoid getting stuck with back pay by making sure you and your employees document their work hours correctly.

5. That’s Not My Job Description

You get busy, the business is growing and set job descriptions end up taking a back seat. What now?

Vague job descriptions can be the death of business operations. Employees aren’t really sure what they should be doing, expectations aren’t properly managed and performance is not measured accurately. Sit down and write a clear, succinct job description for each employee so operations will continue smoothly.

Have more questions about running an HR department for a small business? Contact Advantage Personnel Resources!