10 Reasons Why Small Business Owners Should Have an HR Consultant as Part of the Strategic Team

By Margie Faulk, PHR, SHRM-CP

July 2016

Many CEOs develop critical connections throughout their tenure as business owners. The sign of an effective leader is one that is aware of their strength and limitations. That being said, it is important that business owners identify leaders that can focus on finances, legal issues, marketing and business development giving them the time needed to run their business successfully. Having a knowledgeable HR professional as part of your team can reduce the risk of workplace issues and help your HR team with employee relations issues. Here are other reasons to have an HR consultant as part of your team

Reasons

1. Since 2016, there have been 25 or more changes in workplace laws that impact your business-Having an HR consultant that focuses on new changes in laws can assist you in being proactive instead of reactive for changes that can impact your business. Remember, some of the workplace changes will leave your business open for legal concerns. An HR consultant will target the changes and help you transition to the most updated

 

2. You don’t have a dedicated qualified person in human resources as part of the company-Businesses that have over 20 employees are still required to follow all the workplace laws and regulations. Small businesses usually do not have a dedicated HR professional to handle employee issues. Moreover, the designated person identified to handle these issues is an office manager or someone in the accounting department. An HR professional is usually hired when the business expands their employee base or services. This gap in service can cripple a business. Just one unresolved employee issue can impact the business financially on workplace compliance.

 

3. You do not have policies or procedures written and in place- Employees need to have the business goals and the structure of workplace policies that they can follow. Absent of these policies and procedures, employees can be in limbo on what their expectations are. It is important if not critical that businesses have these in place. If you do not have these in place, employees are not aware of what it takes to be in your business. Policies and procedures are the company’s road map and guidance.

 

4. You do not have an Employee Handbook- It is important that employees have a written handbook that includes updated policies communicated to employees. Although not legally required, an Employee Handbook can reduce some of the perceptions of discrimination by outlining how employees should be treated under specific circumstances.

 

5. You are not following the Department of Homeland Security (DHS) regulations regarding reviewing; confirming or processing the I9 form-There is nothing new about processing new hires and ensuring they have a proper I9 form on the first day of employment. But, did you know that most I9 forms are not completed accurately? In fact, errors that are not corrected can cost between $110 and $1500 per form. If you do not have these completed forms in a separate place away from the employee personnel files, it can cost fines and penalties. Many HR professionals do not know how to properly correct an I9 form. These fines can impact businesses financially.

 

6. You do not have the proper legal workplace posters visible for the number of employees you have-There are workplace posters that must be posted in a location where most of your employees come in for work. Examples of proper locations are the company breakroom, where employees complete applications or new hire paperwork, at construction sites and on company Intranets. Fines and penalties will be levied if the correct and current posters on not posted. Proper posters are OSHA, Family Medical Leave Act (FMLA), Military Leave Act (MLA), Workers Compensation (WC) and Workplace Violence are just a few of the posters that need to be at the workplace. Please check with HR Compliance Solutions if you are not clear what your obligation is.

 

7. Ensuring that you have a safety and accident reporting process for Workers Compensation regulations-In some cases, all accidents must be reported to a supervisor or designated person. Companies are required to have workers comp insurance as part of their insurance coverage. Employees at times do not want to report because they believe they will lose their job and not have coverage. Workers Compensation insurance covers medical and pay (based on type of coverage). A non-retaliation clause covers employees who are involved in WC claims from being intimidated or harassed by management. It is important to check with your broker on the specifics of your coverage.

 

8. According to the Affordable Care Act (ACA), you are required to offer reasonable and affordable medical insurance for your full time employees working 30 or more hours per week- Effective 2015, the ACA required that companies with 50 or more employees working 30 hours or more offer reasonable and affordable medical insurance to their employees and report it to IRS. Prior to 2015, the requirements were communicated to employers and employees. However, effective 2015, the fines and penalties became effective and enforceable. The fines are as high as $2000 per employee. Please check with you insurance broker and/or payroll provider for confirmation of how this regulation impacts your business.

 

9. You have informed your employees not to discuss their pay with other employees-For many years; business owners have had no discussion policy or practice. I even created some of those policies myself in the past. However, according to the National Labor Relations Act (NLRA) which monitors not only union employers but non-union employers, these policies and practices are illegal. That means that you can be in violation of the NLRA by having the policies and practices in place and enforced. Under the NLRA, any discussion between employees regarding their work conditions including the compensation and their feelings about their supervisors cannot be prevented. Conversations about work conditions including discussions about wages is protected by the “concerted activity” protection under the NLRA. For more information about this and other compliance regulations, reach out to HR Compliance Solutions.

 

10. Thinking you are protected by the Employee at Will law-Yes, many businesses are covered under the “Employee at Will” regulation (check to see if your state is covered and if it is included in your Employee Handbook). One CEO was very indignant about following any regulation because he stated that he can terminate any employee for any reason in his company. I agreed with him however, I also informed him that employees are free to sue any business for any reason. In fact, the allegations do not have to be true. Once there is a lawsuit brought on by an employee, the Employer is responsible for disputing the allegations. Moreover, it does not have to get into court since many times companies settle since it is more cost effective. Remember, it is very expensive to prove you are right, does your business have all the workplace regulations and compliance updated? That can be hard to tell since many federal and local agencies like Department of Labor, (DOL), DHS, NLRA, and IRS communicate now between each other.

 

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