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There is something magical about hiring your first employee. Armed with the optimism of running a small- to medium-sized business (SMB), it is easy to get swept up in the romance of expansion while ignoring the hundreds of state and federal guidelines that govern hiring and onboarding a new employee. Still, ignorance is not bliss when it comes to the law; making HR compliance a necessary part of operations in an SMB. But where do you start to create a compliant organization? And more importantly, how do you maintain that compliance in the long run?

The Small Business Conundrum

There is a point in every small organization when hiring a full-time HR person becomes necessary. In most cases, once a business has more than 50 employees, it becomes necessary to have a full-time staff member to manage recruitment, staffing, compensation and benefits, and legal compliance. According to a recent survey by the SBA, firms with fewer than 100 employees make up the majority of small-business employment. This means the majority of small businesses in this country are likely operating without a full-time HR manager. By default, most HR functions will then fall to the business owner who may not have the training necessary to bring the business into compliance.

It all starts with an audit …

Say the word “audit” to an SMB owner and you can imagine the face she’ll make. Still, the only way to identify compliance issues is to put an organization through a full HR audit. Experts in HR compliance, federal and state laws and case studies comb through everything from the boardroom to the break-room to identify liability issues and ways to address issues. This report is then delivered to key decision makers who can develop a systematic approach to compliance.

Then the real work begins

Armed with the results of a compliance audit, the real work can begin. Some items on a typical audit — such as posting OSHA reporting procedures in the breakroom or providing eye-washing stations when workers are dealing with hazardous chemicals — are easy to remedy. Others, like refining hiring practices or creating a time- or performance-based compensation and benefits system, take more time and effort. Some of the most often neglected areas of legal compliance in small businesses are:

  • Having standardized, written employee handbooks and policies
  • Creating practical, efficient, standard training and promotion practices
  • Legal hiring and termination policies and practices
  • Risk management and safety compliance
  • Standardized payroll, benefits and record keeping in line with state and federal guidelines

Support through every step

Daunting as it may be to create a legally compliant small business, you never have to do it alone. The highly skilled HR professionals at Employer Flexible don’t just offer assessment, they offer guidance as well. After all, what good is knowing you need to limit your liability if you cannot actually bring your organization into compliance with local, state and federal laws? Our detailed process recommendations empower SMB owners to not only understand the risks to which they are exposed, but to also know how to close those liability gaps. Contact us today to find out how Employer Flexible can help your organization.


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