Small businesses are the backbone of our national economy. As such, small businesses make enormous contributions to our economic growth and stability. As vital as small businesses are to our national stability, they come equipped with their own unique challenges, expectations, and demands.
As any small business owner knows, employees and human resources are the epicenter of a business owner’s responsibilities. Left unaddressed, issues involving human resources and employees can upend a small business. Take the time to familiarize yourself with what business consulting experts consider to be small business owners’ three most common mistakes:
- Misclassifying Those Who Work for You
As a small business owner, you are legally responsible for correctly classifying the people who work for you as either employees or independent contractors. These classifications carry significantly different tax consequences and varied implications regarding mode and frequency of wage payment. In New Jersey, workers are generally employees unless you can effectively show that you don’t exercise control over the workers and their performance, the work provided by the workers is outside the usual purview of your business or is performed outside your places of business, or the workers are engaged in a profession or trade that is customarily established as independent. Misclassifications can get very tricky very quickly.
- Failure to Create and Implement an Employee Handbook
A well written and thoughtful employee handbook can save you a lot of heartache; it is the foundation on which your business runs, and it should clearly communicate your policies as they relate to human resources and employee procedures. Your employee handbook keeps your employees informed on those topics that are relevant to their work, and it can help you ensure that your employees understand the business relationship that you’ve formed and the responsibilities that you both shoulder.
- Failure to Document Employee Performance
At-will employees can be terminated for any reason that’s not unlawful or for no reason. If one of your employees, however, believes that his or her termination was unfounded or illegal, you could be exposed to costly litigation – regardless of the outcome of the case. Do yourself a favor and stick to regularly scheduled (and as-needed) performance reviews. Also document any progressive employee discipline that you implement. If you must terminate an employee, you’ll have an accurate and accessible record of the steps you took to rectify the performance issue.
If You Have an HR Question, Call 732 238-8686 for More Information Today
If you run a small business, you likely have human resources questions; these matters can become extremely complicated and costly if ignored or mishandled. Protect your small business from legal misinformation by contacting a legal firm with experience in business consulting. Bowne Barry & Barry Attorneys at Law are here to help your small business align itself with your responsibilities as they relate to human resources. Our business law attorneys have the knowledge and skill to provide you with business consulting services that allow you to grow your small business. Please contact or call the law office of Bowne Barry & Barry at 732 238-8686 today.