Human Resources (HR) is much more than writing policies and ensuring that everyone is following them.  HR is all about the personnel of a business. Whether it’s hiring or firing personnel, taking on administrative tasks, training, improving company moral, creating a culture, classifying or investigating, HR does it all. Some of these tasks may seem easy and others not so easy, but regardless, HR has a lot of weight on their shoulders. With the forever changing rules and regulations that govern employees, HR has proven to be complex and difficult. And for those small businesses that haven’t reached a point where a HR Manager or even a HR generalist is in the budget, the business owners have to ensure that they stay abreast of the evolving employment laws and the other complexities of HR.

Regardless if a company has a HR department or the owner does it all, HR can be a nightmare. Due to the numerous HR laws, many companies are unfortunately faced with legal issues. So not only does knowing the intricate details of what a company is able and not able to do as it relates to HR cause a headache, but the repercussions of not knowing these details can cause an even bigger headache. Some common HR mistakes are as follows:

Misclassifying workers. Some companies, small businesses especially, try to save money on payroll taxes by contracting independent contractors when they should really be W-2 employees. This is a huge red flag to Uncle Sam and could cost a business a ton of money. Not if, but when the IRS finds out, the company will not only have to pay the taxes that they didn’t have to pay for having the employee a contractor but they will also have to pay penalties. Sometimes the combination of the two is so much that it makes it nearly impossible for the business to recuperate.

Firing mishaps. It is crucial for employers to have a procedure that is followed when it comes to firing employees. If not, the company can end up paying a lot of money for unemployment and can even be sued.

Problems with paying overtime. Employers have to be careful because laws regulating overtime vary from state to state.  For example, in most states, like Maryland, employers pay overtime based upon a weekly basis. This can get tricky though because some employers don’t have pay cycles that go Monday – Sunday. Let’s say an employer has a pay cycle that runs Wednesday through Tuesday. Regardless of the pay cycle, overtime is payed on a weekly basis.  So if a full-time employee misses Thursday and tries to make it up the following Tuesday, they will most likely have an overtime problem. When an employee works overtime, it is absolutely necessary that the employer pays them for time worked. The government mandates that overtime is payed at one and one half times the employees regular pay. Some employers, such as government, are able to pay overtime by using compensation time instead. Now in some states, overtime is paid by day. So if an employee works more than 8 hours a day, they get payed overtime for that day.

Break-time issues. If an employee is working on their break, they must get paid for it. In the past, I worked for a restaurant that would make the employees clock out for their lunch break even if they were still performing their job duties. This is simply against the law. No matter how close someone may be to overtime or how much they are trying to keep down labor hours, an employee can absolutely not work while clocked out. It could be something as simple as answering a customer question while on break.  Don’t let it happen!

Being reactive to harassment or discrimination. Every employer is vulnerable to harassment and discrimination cases. The problem is they wait until a complaint is filed to do anything oppose to being proactive. An employer can be proactive by understanding the laws that govern each class of employee.  They can also be proactive by retaining a HR professional just in case a serious one occurs. This way, they can do the proper investigation and are aware of the requirements of the state.

I’m sure by now, your head is spinning and you have realized that maybe you don’t know all there is to know about HR. Don’t worry though, you can get help! Staffing agencies can help you alleviate all of these headaches. By use of a staffing agency, you are not responsible for any HR related matters as long as the employee is on the payroll of the staffing agency. This is one of the many benefits of using a staffing agency. (To see more advantages, read our blog 8 reasons to use a staffing firm). The staffing firm is legally responsible for the employees. Can you imagine how much stress would be relieved if you didn’t have to worry about what may happen in the case of a complaint being filed against you? Don’t wonder any more, click below for a FREE consultation to see the other ways a staffing firm can you help your business.