To err is human (resources). Everyone makes mistakes, but when an error is made by human resources, it can have ripple effects throughout the entire company — affecting company culture, morale, and/or legal liability. That’s why it’s important to be proactive when it comes to human resources, finding and fixing problems before they cost the company time, energy, and money.
Below we take a look at ten of the most common mistakes made by HR practitioners so you can avoid them in your own career or business. But the best way to ensure compliance and follow best practices is by partnering with a Certified Professional Employer Organization such as Resourcing Edge. We handle all your HR busy work, payroll, and benefits so you can focus on running your business with confidence.
10 Common HR Mistakes and How to Avoid Them
- Out-of-Date Employee Handbook
Without an up-to-date handbook, how are employees supposed to know what the rules are and what they can count on? A non-existent or outdated employee handbook causes all sorts of problems, including an increase in employee violations and lawsuits against the company.
While not required by law, employee handbooks are considered best practice for sharing important information (such as health benefits, workplace conduct, and social media policies) consistently among all workers. Ideally, employee handbooks should be updated every year or two. In addition to keeping up with compliance changes, you want to make sure all the current dos and don’ts are provided in writing. As issues arise, you can incorporate specific examples into an updated handbook.
It’s also a good idea to have all employees sign a statement that they have received a copy of the handbook and will comply with the listed policies. The handbook establishes company policy that should be fairly and consistently applied to all employees and owners of the business. Make sure managers know what their legal limits when it comes to interviews, hiring, terminations, and day-to-day management. With clear expectations set in writing, misunderstandings are minimized, thus reducing the risk of conflicts and lawsuits.
- Forgetting the Human in Human Resources
Technology has made it easy to automate a lot of work, but don’t forget about the H in HR. It’s important to treat people as more than just a number or resource. You may want to think of HR in a customer service context where your customers are managers and employees. HR is an art and a science. Walk around. Talk to people. Embrace an open-door policy.
- Thinking There’s a One-Size-Fits-All Solution
In the textbook world, hard-and-fast rules are the norm. But in the real world, textbook answers rarely apply. As an HR professional, you need a nuanced understanding of your organization. Don’t make the mistake of applying black-and-white solutions to gray issues.
If you don’t have the right answer, don’t be afraid to say, “I don’t know, I’ll take a look and get back to you.” Learning on the job is a fact of HR life. Take the time to fully consider the issue and ask questions before making a decision or giving advice.
When you partner with Resourcing Edge, you’ll have access to a team of HR consultants who can assist with everything from job descriptions and employee handbooks to compensation analysis and recruiting assistance.
- Missing Deadlines
It’s easy to get so overwhelmed that you forget about legal deadlines, such as state and federal tax forms, vendor payments, and ACA filings. The fines for late filings can get very expensive and complicated as time goes on, so make sure you have a system in place to consistently meet all deadlines.
Careful adherence to rules and regulations is crucial for business success. Consider partnering with a PEO like Resourcing Edge so you never miss another important deadline.
- Forgetting to Document
“Document, document, document” — it’s the HR mantra. In order to maintain efficiency and protect yourself from an opposing attorney, careful record-keeping is essential. Be aware that your documents, particularly emails, can be used against you by the employee’s lawyer to show discriminatory intent.
If a violation of the employee handbook occurs, make sure it is properly documented. You should never make up documentation after the fact in a scramble to explain an employee termination, for example.
- Secure and Accurate Employee Information
For compliance and efficiency reasons, it’s important to maintain a secure and accurate record of employee information and work history. Keep careful records of leave and disability forms, employee performance documents, and valid I-9s. And don’t discuss people’s personal information with others. A secure, web-based HR management system can help ensure proper documentation.
- Family and Medical Leave Act Mistakes
The Family and Medical Leave Act continues to cause problems for human resource departments. Many FMLA mistakes can be easily corrected, but not if you terminate an employee based (even in part) on FMLA-covered leave.
Many employers are surprised to learn of the two-year statute of limitations for alleged violations of the Family and Medical Leave Act, or three years for “willful” violations. If attendance is ever at issue in an employee’s termination, audit the absences to make sure that no FMLA-covered absences are counted.
- Neglecting Onboarding and Training
Many HR professionals neglect their role in the onboarding and training process. As a result, employee engagement, productivity, and retention will suffer. It’s important to foster an effective, long-term relationship with the employee through a strategically designed onboarding and training process. Work with Resourcing Edge to optimize your onboarding and training processes.
- Hiring Mistakes
Be careful to avoid certain words and topics in job posts and interviews that might trigger a hiring-bias lawsuit. It may be tempting to chat and start asking personal questions in the recruiting process, but stick to employment-related questions only.
Never ask about or note an applicants’ race, sex, religion, age, or national origin information unless you are required to do so. Even if required under affirmative action laws, use a separate sheet that is kept separate from applicant files. It’s best not to write anything on any applications or resumes.
For protection against potential employment-related claims, it’s important to have an updated employee handbook and Employment Practices Liability insurance coverage. EPL insurance provides coverage against certain types of claims alleging discrimination, retaliation, hostile work environment, and sexual harassment. Contact Resourcing Edge to learn more about Employment Practices Liability insurance.
- Payroll Pitfalls
Employee pay lawsuits have risen considerably in the past decade. Often this happens when an employee is improperly classified as exempt and overtime wages aren’t paid.
It’s important to that all employees are classified correctly under the Fair Labor Standards Act. Job titles don’t determine exempt status. In order to qualify for an exemption, a worker’s job duties and salary must meet all of the requirements set by the U.S. Department of Labor. Remember, nonexempt employees must receive overtime pay for any hours worked beyond the 40 hours in a workweek. Overtime pay cannot be less than 1.5 times their regular pay (Department of Labor).
Misclassification of gig workers is another potential payroll pitfall. Every time you determine whether an individual is an employee or independent contractor, the relationship of the worker and the business must be carefully evaluated. To help determine if a worker is an employee or independent contractor, the IRS provides an 11-factor test divided into three categories: behavioral control, financial control, and the type of relationship of the parties. Remember, employees receive W-2s and independent contractors receive 1099s.
Businesses must also comply with state wage and hour laws, which often have more stringent requirements. For instance, the California Labor Code requires specific items of information on pay stubs, including overtime compensation, commissions, or bonuses.
Employers who misclassify workers or make other payroll mistakes can face steep fines, back wages, and class-action wage and hour lawsuits. That’s why it’s important to have solid HR practices in place, accurate records through up-to-date systems, and periodic audits of pay stubs.
To free you from the possibility of payroll errors, Resourcing Edge provides simple and reliable payroll processing through our manager and employee self-service portals. Along with managing payments to contractors and vendors, our payroll software automatically calculates benefits deductions and tax withholdings.
Learn more about the benefits of a web-based payroll and HR system.
HR Is Hard. Resourcing Edge Can Help.
At the end of the day, the best way to avoid HR mistakes is by working with the experts. Businesses can get the HR support they need by partnering with a Certified Professional Employer Organization like Resourcing Edge. By teaming up with a dedicated team of HR professionals and employment lawyers, you can focus on growing your business instead of worrying about the proper handling of payroll taxes, benefits, and employee data.
From payroll, tax, and benefits administration to safety and risk management, Resourcing Edge works with you to create a competitive advantage through strategic HR administration and consulting. We’ll guide you past obstacles, help mitigate risk, and keep you on track.
Take advantage of our team of experts. Contact us today for a free consultation.