HR is a morass of laws, regulations and requirements. It's easy to get twisted up and dumped into a black hole of time and money. But for most small businesses (fewer than 50 employees) there are three basic requirements for a sensible, practical HR program.
These basic requirements are:
Without question, there is a lot more to HR than the three items listed above. But with regard to compliance with HR rules and regulations, this is where owners of a small business need to start.
There are three separate employee files that need to be a part of every HR program. They are:
The law requires that you have a completed I-9 on file for each of your employees. These forms must be available for inspection by authorized U.S. Government officials. It's best to keep all I-9s in a single file.
You should create and maintain a separate file for each of your employees. This file is where you keep most of the information you collect on employees, such as:
It's best to assume all this information is confidential, so keep these files in a secure location. Only people with a compelling business reason should have access to these files.
IMPORTANT NOTE: Files related to an employee's health or medical information must be kept in a separate and secure file.
You should create and maintain a separate medical file for each of your employees. This file is where you keep any information related to health or medical issues, such as:
Again, the employee medical file must be separate from the employee file. Keep this file secured in a locked cabinet. For small businesses, there is usually no reason for anyone (other than the owner) to have access to this file.
An employee handbook is the centerpiece of an effective HR program. The employee handbook explains your company's policies and procedures, and communicates your expectations to employees. A good handbook also helps to protect your company in the event of a dispute.
As with many issues surrounding HR, the policies you include in your handbook can be comprehensive to the point of being ridiculous. For most small companies, an employee handbook with the following policies makes sense:
IMPORTANT NOTE: Creating your employee handbook is a crucial first step. But it's also critical that your employees read the handbook and agree to your policies as a condition of their employment. The best practice is to ask employees to acknowledge their acceptance and to store that acknowledgement in case it's needed in the future.
Creating an employee handbook with the all the necessary policies seems like a daunting task. But there are resources available to help you get it done. A number of companies offer "Policies in a Box" software. Like everything else, these offerings vary in price, quality and time to implement.
It's almost impossible for a small business to keep up with the rules and regulations for required notices at the federal and state level. Happily, there are companies that can solve this problem quickly and inexpensively. For around $25.00 you can get a combined state and federal poster that keeps you in compliance with posting regulations.