How much ‘HR’ does a business owner REALLY need to know?

Unless you are an HR practitioner, you didn’t get into business because you wanted to become intimately familiar with the ins and outs of the complex and ever-changing employment laws. I AM an HR practitioner and I don’t even always enjoy navigating the plethora of laws that sometimes seem to be intentionally TRYING to drive employers crazy or out of business. Whenever I start with new clients, I always warn them that there is common sense, fair, and then there is employment law and there is not always an intersection. Some of the most challenging situations I encounter involve trying to explain to a business owner why his/her perfectly logical policy, that everyone agrees with and likes and has consented to in writing, is not compliant with current law. As a business owner, how much do you really need to know about HR law? My HR Weasel answer is ‘it depends’…but there are some hard and fasts I’d swear by and here they are:

1)    Make sure you’ve got the basics covered.

  • The employment laws you are subject to vary widely from state to state and depending on how many employees you have. That being said, there are some basics every business should do from employee number one:
  • Make sure you are classifying employees vs independent contractors correctly
  • Make sure you are collecting an I9 for every employee, along with correct documentation
  •  Make sure you are paying exempt and non-exempt employees correctly – especially come December 16th!
  • Make sure you are posting required employment notices
  • Pay your employees on time, every time
  • Figure out the laws that pertain to you based on your employee size, and follow them
  • Make sure you are dealing appropriately with personnel information and records.There are laws on what you must keep, where, and for how long and you don’t need to incur easily avoidable fines by not complying.
  • I also highly recommended that you document your policies for employees.


2)   Become familiar with the resources available to you

Chances are you have access to free resources right now that you aren’t using. Make it a point to get and use all the free ‘stuff’ available to you from other vendors, brokers and advisors. If you are using a payroll service, they most likely have assistance, and the same with workers’ compensation or benefits. Almost all these providers have perfectly good canned HR assistance over the internet that can give you excellent information. Remember, though, that all the free resources in the world won’t help you if you don’t know how what you don’t know. I like to go through some checklists with clients to get a sense of their understanding of basic policies and practices just so we both have an awareness of where they might need help and where they are on solid ground.

3)   Think in terms of systems and processes before you need them

When you’re a one or five-person show, you admittedly don’t need detailed processes but you will need to define your systems sooner than you think. Every business needs to get customers (sales or marketing), actually provide the product or services (operations) and ensure they get paid for their work (accounting) in a legally compliant manner (HR). If you don’t at least know how these work and have a plan for ensuring how they will all happen when you are twice, three times, or five times bigger than now, you will experience ‘growing pains’ that can set you back significantly while you work to create the systems. My advice? Do as much in advance (while you have the time) as you can, and tweak when needed.

4)   About documentation….

Never anyone’s favorite subject, I know, and while it’s not legally required to have a handbook and written policies, it probably should be. Documenting your company’s commitment to following the law, and making expectations clear to employees saves so much trouble down the road. Many companies avoid policies because they feel it sends the wrong message to employees that they aren’t trusted and I understand that. However, an incorrect assumption can cause a lot of trouble down the road.

5)   Take harassment and violence seriously

These issues may not be as prevalent as wage and hour or ICE issues, but when they exist, they can take you down! I strongly recommend an anti-harassment, anti-discrimination and workplace violence policy for every employer to avoid liability and to keep employees safe. It’s just terrible when joking or horseplay goes awry and otherwise good employees need to be let go for crossing the line and it’s even worse when a not-so-good employee threatens the lives or safety of your team. Policies can’t stop bad behavior but they can help you deal with it quickly and firmly so please don’t wait until a problem happens to put these ones down on paper.

There are a thousand different things you may encounter in the course of doing business and this is by no way intended to be an exhaustive list, but starting here will cover the majority of problems you are likely to encounter out of the gate. You can also check out my website for a free best practices checklist designed to help business owners cover the basics For more complex or in depth concerns, you may want to consider enlisting a consultant, attorney or full time HR practitioner as your business grows. Until then, stay out of trouble and enjoy growing your business!

Carrie Maldonado is the founder of Today’s Leadership Solutions, a Seattle-based consulting firm focused on helping organizations, leaders and job seekers to identify workplace solutions that work. As a certified executive coach, organizational development expert and resume writer, Carrie consults with small to medium sized businesses on OD, human resources and recruiting solutions in addition to providing career coaching to managers and executives in transition. Carrie can be reached for consultation at

By Carrie Maldonado

Carrie Maldonado, is an organizational development consultant, author, and speaker. Carrie's eclectic mix of professional interests include writing, speaking, coaching, and consulting on topics ranging from organizational behavior management to spiritual transformation in and out of the workplace. Carrie lives in the beautiful Pacific Northwest with her patient and long-suffering husband and their three children.

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