I recently had the pleasure of presenting a webinar with Kelly Pacatte, Senior Employee Relations Consultant at TriNet and learned about some new HR risks. We learned that ignoring these risks, like other business risks, is catastrophic.
Let’s face it, HR is a department that most startups resist, even more so than legal or accounting advice! But as your company grows and maybe has actual employees, these tips can save you.
First, some staggering statistics: the Equal Employment Opportunity Commission (EEOC) recovered $296 million dollars, representing 88,778 claims, by employees against businesses. Early stage companies cannot afford to pay out for claims!
Instead, we recommend that you heed Kelly’s five tips below:
Tip #1: Train All Your Managers on Basics
As your company grows and you delegate supervisory responsibilities to managers, you need to provide the appropriate education on how they interact with the employees that they are supervising.
Kelly shared an example where a manager commented that an employee should not worry about a mistake as that employee made because they are “young and inexperienced.” That type of comment that includes age can be problematic and open the company up to litigation. There are types of protected classes that include age and gender and your managers need to know the basics.
Tip #2: Seek Professional Help to Classify
When it comes time to decide whether an employee should receive overtime or not or better yet, be an employee or a contract, seek experienced employment law help. IRS rules and labor laws need to be consulted when classifying workers.
It is not your decision or what you think is best for the business. And the penalties for misclassifying can be onerous. More and more state unemployment agencies are going after small businesses who are classifying employees as contractors to avoid paying taxes.
Tip #3: Document Performance Issues
No one likes to discipline employees but it is critical to document any issues in a methodical manner at the time that they occur. Further, just stating the problem is not enough. Make sure that your managers are trained to performance or behavioral issues.
Kelly recommends using a ‘record of counseling’ or ‘corrective action’ notice and be very specific. State the issue or concern; expectations; and then consequences if the corrective action does not take place, even if that is termination. Failure to document these types of meetings will open the company up to risk.
Also, your employees will not be able to improve! Remember the cost to hire a new employee is far more than the cost to train an existing employee to be better.
Tip #4: Create Complete Job Descriptions
This seems a bit archaic but if you do not have an appropriate job description that takes into considerations all functions, including physical requirements (for the America Disabilities Act (ADA)), there is nothing to measure against.
The job description provides the expectations and protects both the employee and the company from unfairness and discrimination.
Kelly also commented that the ADA is not just for what is traditionally seen as “blue” collar work but also for “all collars.” There are online tools that help with job descriptions, including ADA requirements.
Tip #5: Consistent Leave Policies
It’s a popular topic these days with Netflix offering unlimited maternity and paternity leave. However, the key is to make sure that all leave policies are written and shared. Having a process for leave approval and records is also very important.
A participant asked about what documentation should be in the employee file:
- Not an I9 – that goes in a separate file!
- Hiring & compensation information; and
- Performance reviews
If you like webinars, check out Traklight CEO Mary Juetten's webinar with SCORE, "IP 101: Why Care About Intellectual Property", tomorrow at 1 PM EDT/10 AM PDT. You can register here.