How to Tell If a Small Business is Compliant with HR Laws

Reposted with permission from the ZaneBenefits blog.

As a small business owner or advisor, you don’t have a lot of time to spend on Human Resources. At the same time, you need to ensure that employees are taken care of and that you are compliant with various HR rules and regulations. Where to start? Here are eight basic questions to assess if your business is HR compliant.

1. Are Employee Files Up to Date?

In general, there are three separate types of employee files to create and maintain: an I-9 File, Personnel Files, and Medical Files. 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. For a list of what should be included in each file see: Small Business HR Basics.

2. Do You Have an Employee Handbook?

The employee handbook explains your company’s policies and procedures, and communicates your expectations to employees. It also helps protect your business in the event of a dispute. For a list of employee handbook basics, see this article. It’s a good place to start.

3. Have You Posted the Required Notices?

There are various required state and federal workplace notices to post at your business. There are several online vendors who, for a minimal cost, will provide state and federal required notices to post. You can also visit the Small Business Administration for more information.

4. Are You Paying at Least Minimum Wage?

The minimum wage is the minimum hourly wage an employer can pay an employee for work. The current federal minimum wage is $7.25/hour, however many states, counties, and cities have established their own minimum wage laws. See this list of minimum wage by state.

5. Are You Verifying Employment Status?

It is illegal to hire an individual who is illegally residing in the country. As such, each individual’s identity and employment eligibility must be verified in order to be hired. This is done by completing an I-9 form that is provided by the United States Citizenship and Immigration Services (USCIS).

6. Are Your Interviews Lawful?

Hiring is an exciting part of your company. As such, be sure you understand what questions to ask – and not to ask. For instance, did you know that you cannot ask questions that reveal a person’s race, gender, religion, marital status, disabilities, ethnic background, country of origin, or age? Have your questions planned out to ensure you don’t accidentally venture into one of the questions that are illegal to ask.

7. Are Your Health Benefits Compliant?

Most small and micro businesses cannot afford traditional health insurance. Instead, they reimburse employees for their personal health insurance policies. Whether you offer traditional health insurance or a reimbursement arrangement, there are important compliance changes with health reform. Make sure your health plan complies.

8. Are You Up to Speed with Employees’ Rights?

Even if your small business doesn’t have Union employees, all employees have certain rights under federal laws. Know what these rights are so that you don’t violate them. They can be found on the Department of Labor website.

These eight questions will get you started with assessing your HR compliance. What additional questions do you have about HR compliance? What would you add to the list? Let us know if the comments below.

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Christina Merhar is a lead contributor to Zane Benefits’ Employee Health Benefits and Insurance Blog. @ChristinaAtZane.