As a Human Resources consultant you get to see many clients, get to know them and get to know the issues they are facing. In my experience, these small business owners, entrepreneurs, are hardworking people trying to do the right thing. However, none of them are experts in the HR field; thus, they do not know much about labor law or how to apply these laws in their business. What are some of the bad practices I have seen? Let’s start with the most recent ones:
- Some small business owners do not keep important records required by law, as soon as the employee leaves employment they put the whole employee file through the paper shredder! You need to keep payroll records for at least three years and you need to keep time cards and piece work tickets, work and time schedules, and records of additions to or deductions from wages for two years. Remember, these records must be open for inspection by the Labor Commission if the show up at your doorstep!
- In my experience, small business owners and employees talk a lot about salary! On the one hand, employees want more money and they do not really mind working more than forty hours a week at their regular rate of pay. On the other hand, small business owners need consistency, know the employee is a very hard working person and do not want the hassle of recruiting and hiring someone else; so, they talk and jointly decide is a good idea to work more than forty hours a week without overtime compensation! Remember after forty hours a week you need to pay overtime!
- I get many calls asking what to do with a bad employee. When I ask the small business owner if he/she has disciplined or address the issue with the employee most of the times the answer is: “No, because…” Remember to document, document, document! If the worker is arriving late, not showing up, or simply not performing at the level you need them to perform, you need to let them know and put in writing!
These are some of the issues I have seen recently! Some of them I have seen over and over again in different small business. There is no better policy that complying with the law to avoid problems later and “I did not know” or “everybody else does it” are not good excuses! Remember, ignorance of the law excuses no one!