Did you know that the laws governing a business with 20 employees
are vastly different from the ones that apply to a 30-employee venture?
What you don't know can do more than hurt you-it can bring a thriving
company to its knees.
As countless American companies tiptoe toward recovery in a treacherouseconomy, it pays to be cautious. Of course, if you're considering addingemployees to your team, then you're
doing something right. Safeguard that success with the strategic use of
human resources. It's your most valuable tool in navigating re-growth,
one careful step at a time.
READING THE SIGNS
Like any key area of your business, human resources can work as a huge asset as long as you manage things properly and comply with therules and regulations
that apply. Laws vary based primarily on company size and location.
Those rules and regulations fall into four broad categories: wage and hour, time off, benefits and training. Here's a brief rundown of thekinds of
things you must include in your plans for company growth.
Wage and Hour
Anything and everything that relates to payroll-from how you pay to when you pay and how much you pay your employees-must comply withstate and federal employment laws. There are laws that govern howquickly you
must pay a terminated employee (whether voluntary or involuntary) and
how to handle paycheck errors. Cutting corners in the payroll department
can cost you a lot more than it saves. It's absolutely vital that the
management of these important aspects of your business is handled by
someone who knows the laws in your industry and locale.
Time Off
Any time off that you grant employees, including leaves of absence, vacation and sick days (and whether and how much you pay them),can be affected by a number of regulations. A variety of statutesdesigned to
protect employees' rights apply differently based on how many employees
you have.
It should go without saying that sick days, vacation time, leaves of absence and other time off must comply with the law and should begranted fairly to all eligible employees, regardless of
gender, race, age and the like.
Benefits
Every perk you provide is governed by regulation. You can't avoid the law by eliminating benefits altogether; some benefits arestatutory. Things like disability coverage, workers' compensationinsurance,
health insurance and company vehicles can open you up to serious
liability if they're managed carelessly. Ensure that every resource you
allocate is handled thoughtfully (and legally).
Training
Your company must meet applicable laws such as safety, sexual harassment, OSHA standards and other training required for your industryand in your state of operation. Requirements fluctuate with your
employee count; more on this later.
Downsizing
Just as there are compliance issues related to growth, there are regulations that go along with downsizing. Plant closures and layoffsrequire 60 days' notice. If you have large layoffs on the horizon, be
sure to review the regulations to ensure that your plans meet all
related legal requirements.
PLAYING THE NUMBERS GAME
Most employers know they must comply with the laws in their industries and locales. Many are surprised to learn that the laws aredifferent based
on the size of your company. So if you've been cruising along with 24
employees for several years and decide to hire an additional
administrative assistant to support your sales team, you'd better know
that the rules of the game have changed. Adding one more employee just
bumped you out of the smallest category and into the next level of
compliance.
Very Small Business (Fewer than 25 employees)
When you have fewer than 25 employees, you work like crazy-but chances are, you're not spending much of that time worrying aboutemployer compliance issues. That's because you have the bare minimum of
rules to live by. But when you hire a 25th worker, you may notice a few
changes.
Moderately Small Business (25 to 49 employees)
When your company expands to this level, there are a few more issues to be concerned with. Employees with addictions are entitled tocertain rehabilitation rights. Abused spouses are entitled to domesticviolence
leave to relocate, seek counseling and the like. Employees with
children are entitled to 40 hours per school year to attend their
children's school activities. These are just a few examples; other
family and military leave statutes and illiteracy programs also apply at
this level.
Small Buiness (50 to 74 employees)
Hiring your 50th employee is a big moment for any entrepreneur. The upside: You've achieved a level of success that few businessesrealize. The downside: Steering clear of regulatory mishaps can become a
full-time job. You must now maintain annual Equal Employment Opportunity
(EEO) tracking and reporting compliance; provide mandatory sexual
harassment training (SB1825); participate in affirmative action, grant
Family Military Leave Act (FMLA), California Family Rights Act (CFRA)
leaves; and provide voluntary firefighters' leave. There's more.
You're also subject to the Worker Adjustment and Retraining (WARN) Act, a
schedule of rules and regulations that pertain to providing advance
notice of plant closures and layoffs. But just remember, the grass isalways greener on your side of the fence-at least it is to the folkswith even more employees!
Medium-Sized Business (75 to 99 employees)
Each states compliance becomes more critical at this stage, and the numbers alone can sometimes make regulatory compliance a bit moredifficult. Things step up again, of course, when you reach the triple
digits.
Large Business (100 or more employees)
When you hire your hundredth employee, you can certainly say you've made it. Everything is on a larger scale now, from sales toliability. Your numbers expose you to greater risk, as the workplaceprovides more
opportunities for employees to become injured or disgruntled. It's
easier to make costly clerical errors relating to payroll, or management
oversight that fails to notice a missed lunch break. Doing what you've
always done may no longer be effective. Keeping your eyes on the big
picture requires a watchful eye on detail and depth as it relates to
sound business practices.
YOUR GPS FOR SUCCESS
The larger your company grows, the more crucial it is that your human resources team focuses on strategic efforts rather than tacticaladministrative
tasks. Getting caught up in policy rather than finding common-sense
solutions is a common pitfall.
Use these tips to craft your plans:
• Prepare for your 25th new hire; start strategical for the future before you're under the gun.
• The best handbook in the world can't replace smart management. Use your manuals as guideposts, not bibles.
• Avoid a cookie-cutter approach. Handle each employee and their circumstances uniquely, giving consideration to a win-win outcome.
• Create policies that are more interactive than rigid. Refusal to bend can leave you vulnerable to breaking.
Whether you go it alone or outsource human resources expertise, the stakes are too high to simply cross your fingers or to throw up yourhands.
Failure to comply with state or federal employment regulations puts all you've worked for at risk.
If you have a human resources guru on staff, invite them to the strategy table. Provide human resources with technology tools to manageemployee data so that HR can provide real
time data to forecast business needs and drive results. But if
you're not so sure you have the bench strength in HR, not to worry.
There are firms who specialize in navigating these waters for you or
with you. They know the territory well, as they've helped many clients
handle the precise concerns you're grappling with. Trusted firms can
share the benefit of their experience in areas where you're just getting
your feet wet.
It's a mistake to believe that human resources is another cog in the business wheel. Imbue your human resources team-whether that's oneperson or a specialized company you've
engaged-with a sincere vision of who you are and where you want to be.
Hope this Helps
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