Rhys: Rhys: Bernadette Jones is a freelance HR consultant, she is certified as a senior professional in Human Resources one of only 43,000 SPHR’s in California. She has first-hand experience in small business developing in HR department while growing from two to ten and then as many as fifteen employees. What are the first things that people really need to address, the important minimum standards that they need to meet for HR that won’t get them in trouble?
Bernadette: Well, I think that the most important thing for a small business, when you have an employee, even one employee. It is to have your payroll done. And, my suggestion is to use a payroll company. To do that, it really keeps you compliant. You don’t miss anything. It helps you to understand when you need to pay overtime, what the minimum wages are. All those kind of things, it’s very helpful, and it doesn’t cost a lot.
Rhys: Okay, so what would be, other than payroll, what’s like the next thing that we can consider?
Bernadette: Well, when you first hire your first employee. You have to comply with the FLSA which is a Federal Labor Standards Act, and that governs pay for overtime, minimum wage and then child labor laws. So you want to be very familiar with that. When do you have to pay overtime, what’s the minimum wage? You want to become familiar with what is an exempt and a non-exempt employee, independent contractor versus an employee.
Rhys: And we will go into independent employee later.
Bernadette: Yes, because those are very important. Because that can get you into a lot of trouble, so you want to become conscious of those laws. And also, the immigrations standard act, which makes you responsible for verifying that every employee is legal and available and able to work in the United States. So that means, verifying id, and you know, everybody’s familiar now, when you come for a job you bring your social security card, a passport, a driver’s license. Or some of those items that really identify that you’re able to work in the United States. So, you want to be conscious that you’re doing that, and then just make sure that when you do payroll, whether you use a bookkeeper, you do it yourself or a payroll company. Everything that, all the deductions are on the employees paycheck stub. So, lot of small businesses will write a personal check, or they’ll write a business check.
Bernadette: And that doesn’t account for the deductions. You don’t see the deductions, you want to make sure that you make those deductions. So, those are the first things that are most important when you hire an employee. . You want to have an employee handbook, which there may be times when the payroll company will assist you in putting together an employee handbook.
Rhys: Even if there’s only one employee?
Bernadette: Even for one employee.
Rhys: See, I never even thought about doing that. Till I had more,
Rhys: Till I had, you know a more of a group of people.
Bernadette: It eliminates a lot of issues, and so, if the basic things are set out in an employee handbook. Like you’re at-will employer, okay? So, you want to make sure, things like that are in the employee handbook. What are the benefits if any, how are holidays are handled. So all of those things, with one employee can be, it is very important. Because, one employee can cause you a lot of money if you don’t do it right.
Rhys: Right. Yeah, that is a burden. I know, first, so long we would just sort of holidays, would come up and we’d just look around and say, “Hey, are we taking this holiday? Or are we working?” You know, it’s very, very, very informal. But you know, I guess, I’ve been lucky?
Bernadette: Yes. Yes. And, you know, some of the statistics say; that because with a small business you typically have a higher turnover than a larger business. And, the department of labor says that fifty percent of the employees leave within the first six months. So, the more turnover you have. The more increased liabilities you have for a wrongful termination, lawsuit, discrimination in hiring, and wrongful termination lawsuit can cause you upwards of $85,000 just to be represented.
Rhys: Not even if you’ll lose the case.
Bernadette: Right, that’s just right or wrong. Okay? But if you lose a case, the average settlement is $500,000.
Rhys: Wow, well that would put a lot of small businesses, right out of business.
Bernadette: A lot of small businesses out. So, that’s something to be very concerned about. And so, hence the idea of making sure that you have, human resources support even if you don’t have an individual person within the company, who is a human resource professional. Learn as much as you can, and just assign one person to just be as acquainted with human resource law as they can. There’s so much that you can learn on the internet. So, if you just have one person that’s responsible for that. And, I mean you can supplement that with professional help from an HR company, a professional employers’ organization, a payroll company that’s…
Rhys: Or someone like yourself.
Bernadette: Or someone like myself, an independent consultant that is the best thing you want to do. Start it off, so you don’t have a huge expense but, at the same time you’re protecting yourself.
Rhys: Okay, a particular website should be very valuable for a…
Bernadette: Let’s see, the Department of Labor, the DFEH or the Department of Fair Employment and Housing, which would have a lot of laws that you have to comply with. So, those are good places to start.