Sound advice for small businesses

It's hard enough to keep your business operating profitably without worrying about HR issues and regulations. FrankCrum, a national Professional Employer Organization, offers these tips to help ease the pain and avoid some common HR landmines.

"Often small and midsize business owners and managers don't really know what they don't know and may unwittingly make mistakes in overtime, wage and hour regulations, discipline, and discriminatory practices," says Christine Pahl, human resources client consultant at FrankCrum. "Unfortunately, these mistakes can be costly [and] create distractions that keep the company from performing at its best."

The following are some of the most common errors:

  • Improperly classifying employees as exempt. This may result in nonexempt employees not receiving overtime pay they are entitled to. Paying someone a salary does not automatically mean they are exempt, and a misclassification can violate laws regarding recordkeeping, minimum wage, and overtime. Any of these violations may result in a lawsuit, with employers frequently unable to justify the reasons for their actions, which leaves them without a defense to the lawsuit.
  • FMLA. Many employers are not aware they are a covered employer under the Family Medical Leave Act or what their obligations are to the employees who qualify for protection under this law.
  • Improper hiring practices. Although most employers know not to ask a job applicant's age, other questions to avoid include those about medical history, prior workers' compensation injuries, criminal record, marital status, sexual orientation, and political or religious affiliations.

    It's important to remember that position descriptions and interview questions should focus on necessary position requirements.

  • Discriminatory practices. Review all aspects of employment, including hiring, promotion, pay, discipline, termination, and training opportunities. It's not enough to focus on intentional or obvious discriminatory practices. A proactive review of trends in these areas and the impact on employees may reveal unintentional practices that should be corrected. In addition, employers should post an EEO statement and distribute a written antidiscrimination policy to be signed by employees and management, outlining the policy as well as redress and complaint procedures.
  • Corrective actions. FrankCrum uses the term corrective action rather than progressive discipline, because it keeps the focus on resolving problems and maintaining a successful relationship with the employee.

The earlier that issues are dealt with and documented, the less likely it is that confusion about performance and expectations will lead to a claim.