Hiring your first employee is a big and important step for your small business. Many business leaders often feel overwhelmed at the prospect of bringing on new staff and do not know where to start. The HR Consultants at Employers Advantage are here to help make hiring employees less daunting. This guide outlines an 11 step process to help prepare your small business for growth and compliance in the hiring process.
*IMPORATANT NOTE: This is to be used as a guide only and should be not be consider an all-inclusive list that is applicable to every business. It is strongly recommended to check the federal, state and local laws applicable to your business for each category and consult with a professional or HR Consultant.
- To hire or to outsource? Before you hire an employee, consider outsourcing certain tasks or hiring a consultant. What can your business feasibly afford? Ensure your worker is properly classified to avoid legal issues. See the FLSA Reference Guide or consult with a professional or HR Consultant.
- Compliance- Make sure you are complaint with all state, federal and IRS regulations. Consultant with a professional to ensure full compliance.
- Payroll and Timekeeping- Prior to hiring, develop a protocol for having an employee on your payroll, or consider outsourcing your payroll tasks. Ensure you have a timekeeping system and record keeping practice that is fully compliant with all Wage and Hour regulations. If the employee will be tipped, see the FLSA Fact Sheet for Tipped Employees.
- Job Description– Define the job and how many hours per week the employee will work. Map out specific job duties and write a formal job description.
- Recruit- Start the process of recruiting by using your network and expanding your search with job boards and local recruiting resources.
- Interview Guide– Create an interview guide and use consistently for each interview. Only ask questions that are relevant to the job. When you evaluate each candidate, use the same criteria in efforts to be fair and avoid legal problems. Save the interview guide and notes in the job folder. See below for information on a job folder.
- Background checks and drug screens– Consider a drug free workplace program to save money on worker’s compensation premium in some states. This will limit your liability and help make your business a safe place to work. When conducting background checks, be compliant with the EEOC regulations.
- Application- Have each applicant fill out an application. Once you have made a selection, formalize employment with an offer letter. If there is a length of time between when you hire the employee and their start date, be sure to check-in with them to make sure they are still on track to start. Ensure your application does not include illegal questions.
- Handbook- Provide the employee with a handbook, which should include written expectations and a consistent set of policies, even if you just have one employee. Be sure to have your employee sign an acknowledgement form that they received the handbook.
- Personnel Files- It is important to maintain files. For more guidance on file management and retention guidelines, this article from SHRM is a great place to start or contact an HR Consultant.
- Employee file– Every employee should have a file for employment related documents.
- I-9 file – These documents should be kept in a separate folder, not in the employee file. Retention of I-9 documents may vary, consult the US Citizenship and Immigration Services to ensure compliance.
- Job file– Each job you recruit and hire for should have its own folder containing resumes, applications and interview notes. This folder should be kept for at least one year.
- Payroll- The Department of Labor requires payroll records, collective bargaining agreements, sales and purchase records to be preserved for at least 3 years. Records on which wage computations are based should be retained for two years, i.e., time cards and piece work tickets, wage rate tables, work and time schedules, and records of additions to or deductions from wages. Consult with a professional to ensure compliance.
- Medical/Confidential Information– for protected, confidential or non-job related information. You may keep the results of the employee’s drug/background test in this file.
- Feedback- It is important to give consistent feedback on job performance, whether it’s weekly or monthly. It will help your new employee stay on track with performance and give them the opportunity to ask questions and get guidance. Document your feedback conversations and keep in the employee’s file.
How Employers Advantage Can Help Engaging an HR Consultant with Employers Advantage to get your business started off on the right track will save you time, money and limit your legal liabilities. Our HR Documents Starter Package will give you the necessary documents to efficiently grow your business and ensure everything is in order for your staff. If your business is further along in its growth, consider engaging an HR Consultant for an HR Compliance Audit, where a comprehensive and complete review is done of the 11 items listed above and much more.