Top 6 HR Mistakes Companies Make and How to Fix
HR or Human Resources can be technical, time-consuming, and complicated, as companies balance both state and federal rules. In order for the following to be a useful guide, I have tried to outline the top 6 areas where companies can focus their energy to give them the most bang for their buck, in terms of better protecting the company from claims that you didn’t follow the correct rules. Of course, every situation is different, but I hope that the general suggestions are a great resource to get you started. If you’re ready for phase 2, reach out and set up a consult to discuss further.
Area 1: Hiring/Firing Process
Pretty much every company at some point will hire or fire an employee. This is often where lots of dispute arise and are, frankly, easy ways to fix problems or limit exposure. When hiring, depending on the size of your company, you may need to follow the E-Verify rules. All companies need to complete an I-9 for every employee within 3 days of starting the new job.
While you are allowed to inquire as to a candidate’s work authorization, there are certain questions that you should avoid during the interview process in order to avoid complaints. Those areas often include the “personal” questions about marriage, kids, racial background, or any kind of disability.
When you get to the firing process, similarly, you want to avoid basing your decision on the protected classes of age, race, gender, sexual orientation, or disability. While most states permit termination without cause, almost every employer I know feels that they “have” to give a reason. More on this in Area 3 below.
Area 2: Payment of Wages; Employee vs Independent Contractor
The easiest ways to get in trouble with employees is to mess with their payroll. There are technical rules around payroll regarding frequency, when something is late, and what you are permitted to withhold from employee wages. As a general rule, unless you are ordered to withhold things from an employee’s wages (i.e. garnishments) then any withholding must be agreed to by the employee in writing. Some of this can be handled in the employee handbook, which we discuss below, and some of this may be standalone.
The other big area that companies can get in some serious trouble for is regarding how they classify workers. In other words, are they W-2 employees or “independent contractors”. I have defended many companies fighting this distinction. Ultimately, it doesn’t really matter what you call people (employees vs contractors), it matters how you treat them, pay them, train them, and control them. There are a lot of areas that we could discuss here, but suffice it to say that if you try to walk the “independent contractor” line, you need to make sure that someone who has experience in that area reviews this with you carefully to make sure to avoid problems and potentially expensive judgments.
Area 3: Discipline Process
What is your system for giving a “write up”? There are no hard rules here, but it is very important that you document no only the mistakes of your employees, but also the improvement plan for correcting the mistakes. Then, if mistakes continue, you can refer back to the improvement plan and the failure to follow those guidelines. While this may seem a bit overkill, it could become very important if your employee ultimately quits or is fired and then tries to file for unemployment benefits. The best defense against having to pay unemployment benefits is when the employee was terminated for cause. Be clear about write ups. Give a copy to your employee. Keep a copy in their HR file.
Area 4: Leave, Absence, Breaks, and Related Policies
Much of policies surrounding leave, absence, PTO, breaks, lunch, FMLA, disability, sick leave, etc. can or should be outlined in your employee handbook. Some of these rules are driven by state or federal rules (depending on the size of your company), but the vast majority is based on whatever written policy you have in the company. Don’t overthink this. Be simple. Do annual trainings on these policies, including updates. Make sure that employees sign an acknowledgement of these kinds of policies. Not tons of specifics here – just make sure you have a written policy, and make sure that your policy does not conflict with any other state or federal rules.
Area 5: Employee Handbook
As you likely have guessed from the other items in this article, having, maintaining, and updating an employee handbook is one of the most important things you can do for both creating the culture of your company, and protecting the company itself. There are no real “rules” for how long, or what kinds of policies need to be in here, and every company is different. Maybe you have a dress code. Maybe you have a grooming standard. Maybe you have a cell phone use policy, or a company vehicle policy, or a tardiness rule, and on and on. You can create what makes sense for your company.
Keep in mind that no matter what you decide to do for your handbook, make sure to have one. This book should also have a place for employees to sign their “acknowledgment” of having received a copy. This is often the first and best defense when your employee complains about how they feel you terminated them without cause or somehow discriminated against them.
Area 6: Complaints
Lastly, sometimes, despite your best efforts, employees have complaints about how they are being treated, not promoted, feel harassed by co-workers or supervisors, and much more. You need to make sure that you have a clear policy surrounding how complaints are to be reported, and also how they should be investigated. These can be some of the most sensitive things that a company does so don’t cut corners here. If you’ve never done investigations, make sure to have a trained professional available to either consult with on this process or completely handle it themselves. No company will exist without complaints at some time, so take time to think about how to handle these often emotionally charged issues ASAP.
Conclusion
As you likely can see from the few hot button items discussed above, there are a lot of landmines when trying to navigate the HR world. Call us. We’re happy to help you walk through the steps necessary to get this area of your company protected and improved.