While HR mistakes, thankfully, usually are not fatal, they can create serious consequences for an franchise owner.
Here are seven common mistakes that are easy to avoid while creating a lawful and more satisfying workplace for your employees:
- Hiring someone as an independent contractor who should really be classified as your employee. Tread carefully when hiring workers because the IRS, US Department of Labor and many states are teaming up and scrutinizing employers more closely than ever. If you control how someone does the work, as opposed to merely the results, the person is likely your employee. If you provide the tools and equipment, the person is likely your employee. If the person is doing work that is intrinsic to your business, the person is likely your employee. If you re-hire someone "as a consultant" to perform the same work they use to do for you as an employee, the person is, once again, your employee.
- Changing or creating a policy but not communicating it properly. What is the point of having a policy if those it affects don't know about it? It sounds silly but sometimes the crucial communication piece gets neglected or is incomplete. The best policies provide clear guidance and information and help employees and managers alike by communicating expectations across the organization. Trying to enforce a policy that an employee didn't know about won't hold up in court. Expecting supervisors to enforce policies they don't fully understand is counter-productive. Train all supervisors and all employees about all of your policies.
- Allowing bad behavior because someone is your star consultant or best salesperson. If you let anyone get away with bad behavior, that behavior will escalate and you'll soon have a morale problem on your hands or the bad behavior may spread among others. Promptly discuss the problem with the person and explain that it must change. Sometimes a person does not realize the effect he or she has on others so pointing it out may be enough to put a stop to it. If not, you'll need to explore stronger measures and consider whether it's really worth the additional problems to keep this person on staff.
- Hoping employee complaints will go away if you ignore them. Employee complaints, whether regarding safety, sexual harassment or assertions of discrimination don't just resolve themselves. Take all complaints seriously, investigate promptly, and take appropriate action, if warranted. Be sure that your efforts to correct any problems do not make working conditions worse for the complainant. That could quickly escalate the problem and subject you to a claim of retaliation.
- Not being honest about employee performance. It can be difficult for supervisors to deliver bad news but letting employees believe they are doing a good job when they aren't is all too common. This lack of honesty denies the person the opportunity to improve and puts the organization in a tenuous legal position should it decide to terminate the employment. Train your supervisors and hold them accountable for giving honest coaching and feedback to employees.
- Classifying a job as exempt based on its title. Small companies often provide lofty titles but whether a position can be considered exempt or non-exempt from Fair Labor Standards Act (FLSA) minimum wage and overtime protections depends upon its duties, never on its title. Be prepared to justify your classification of every exempt position based on one or more of the US Department of Labor's (DOL) Exempt Duties Tests (in addition to meeting minimum salary requirements.)
- Failing to pay non-exempt staff for unauthorized overtime. Pre-authorized or not, any work that you have suffered or permitted must be paid and an overtime premium applies to hours that exceed 40 in a work week. You may discipline the employee for working overtime without pre-authorization if that is your policy, of course, but that does not absolve you of your payment obligations.
It is much easier to prevent mistakes than to correct them.
The demands of HR legal compliance in an increasingly complex business environment can sometimes seem daunting. But take the small amount of extra time and effort to prevent basic HR mistakes so you can spend more time inspiring your staff and growing your business. Now that's a good idea at any time!
When you need an HR legal compliance program that just works, connect with me on LinkedIn.