7 Ways to Steer Clear of HR Problems

Over the years, The HR Matrix team has advised businesses on a variety of employment related matters. In recognition of our 7 years in business, we compiled our seven most common areas of concern. If your organization needs assistance in these areas, we’re here to help.

1. Have accurate and current policies in place. “We never updated our handbook.” “We borrowed someone else’s handbook.” “We’ve never enforced it but now we have a problem…” We hear these types of statements frequently. Having a set of current policies that are applied evenly across the organization is the best practice. Some companies offer policy and handbook templates that can be a good foundation but usually need adjustment for California requirements and company practices. If your handbook or policies are out of date, now’s the time to have them reviewed.

2. Administer and pay employees correctly – avoiding overtime pay by placing lower level employees on salary is the classic mistake. There are other ways that employers open themselves up to wage claims – or worse – lawsuits. For non-exempt employees: not providing breaks, comp’ing time off for overtime worked, and letting employees work through lunch. For exempt employees: having 50% or more of their duties fall below exempt level work. This erodes their exemption and they become overtime eligible –retroactively. Employment regulations under the FLSA are based on job duties, not titles, hours or preferences. If you have doubts about how your employees are classified (exempt or non-exempt) or how they are supposed to be paid under Federal and State law, it pays to get the facts.

3. “If it looks and acts like and employee…it’s probably an employee.” We see many employers who want to take on workers as independent contractors because they don’t want the headaches associated with hiring and paying employees, or they honestly believe the person qualifies as an independent. Either way, it can be very problematic. The IRS considers a person an employee based on a set of factors. If you set the rate of pay and the person’s work is part of the normal business of the organization, they are probably considered an employee. Penalties for unpaid payroll taxes and willful violation of this law are high –minimum $5000 for each misclassification. Other problems can arise with workers comp and claims for overtime/benefits. Bottom line: get clarification and hire employees legally from the beginning. Click here to access the IRS site for more details on employees versus independent contractors.

4. Hourly employees must be paid for all time worked. We frequently hear of employers whose non-exempt employees work off the clock – phone calls, texts, emails after hours, etc. We’re all getting used to working “on demand” with all the communication technology available. The problem is, that time can be compensable for an hourly “non-exempt” worker. Ensure your non-exempt employees know not to work off the clock without authorization and how to document all their time properly.

5. Screen thoroughly, hire properly. We ask these questions frequently in response to client concerns: “Did you get an employment application?” “Did they sign an offer letter?” “Did you interview thoroughly?” “Did you run a background check?” “Did you check references?” If the answers are all yes, this is a good sign. Many employee related problems occur because new hires weren’t screened thoroughly, or the terms and conditions of employment weren’t clear and agreed upon at the start. Smart hiring includes effective interviews, reference checks, employment applications and offer letters as well as paperwork pertaining to your policies and as required in California. In most cases, it is highly recommended you conduct background checks.

6. Educate supervisors. Do your supervisors know what to do if an employee is not performing well or complains of harassment? Many supervisors are promoted from line staff with little or no management skills or training. This can be a real disadvantage, especially over time. At a minimum, supervisors need to know how to coach, discipline, document and motivate. In addition, providing harassment training to supervisors is a legal requirement for employers with over 50 employees. There is a host of other aspects that a supervisor should have familiarity with, including workers comp, ADA, discrimination, and when to seek help from HR. It pays to invest in your supervisors’ training – they’re your first line of defense against problems, claims and lawsuits, and the key to your success with employees.

7. Get educated on how to complete I-9’s correctly. The odds of being audited for I-9 compliance are low but the penalties for incorrect documentation are high. Pretty much every I-9 audit we do reveals a lack of understanding about the employer’s responsibility with this form, though the updated form (available May 2013) is helping. It’s easy to complete I-9’s correctly if you know how to do it. We can help you how or you can start with a great free resource, the USCIS I-9 handbook.

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