5 HR Basics That Every Employer Needs to Know
Wouldn’t it be great if there were only a handful of HR truths you needed to worry about and, once you’d mastered them, you’d earn your black belt as a manager?
OK, enough daydreaming, and we won’t lie to you. There are dozens of HR points and pitfalls employers and managers need to know about—and ignoring them will damage both your team’s engagement and the business. But a little HR knowledge can go a long way. Here are 5 things that you should keep in mind when it comes to HR for your practice:
1. If you are an employer or manager, recordkeeping is part of your job.
And it’s your lawful duty, too! As an employer, you must keep track of hours worked by your non-exempt employees, you must fill out and retain certain new hire paperwork, and you absolutely should record key interactions with your employees for your own protection. Even making a quick-but-specific note about an ongoing issue can provide vital evidence that your management decisions were based on facts rather than bias.
And, while few of us love extra complexity, there’s another “up” side to great recordkeeping: Most complaints can be resolved or mitigated through sound documentation. (Of course, the HR practices you follow have to be sound, too.)
Here’s a case in point. We once had a member receive a demand letter from a former employee’s attorney. The letter alleged that the employer was not paying overtime properly. Fortunately, the employer was able to respond with three years’ worth of timekeeping records for her non-exempt employees—all electronic—along with pay stubs for the employee in question.
The attorney was never heard from again. Though recordkeeping may not always make a potential employment case disappear this easily, in this instance it was all that was needed to avoid a lengthy and expensive legal battle. And we’ve heard about dozens of other specific instances where recordkeeping has helped employers and managers resolve critical issues in an advantageous, timesaving way.
Not sure if your timekeeping system is robust enough to protect you from legal challenges? Schedule a demo of CEDR’s advanced timekeeping system.
2. Employees do not have to agree to your policies for them to be in effect.
When an employee signs your employee handbook it signifies an acknowledgement of your expectations as an employer, whether or not the employee agrees personally with every policy you maintain.
That said, it’s not enough to just tell a jury or an unemployment hearing officer that you gave an employee a copy of your handbook and they disobeyed your rules anyway. Instead, you want to be able to prove all of your employees had a copy, that they signed to acknowledge that they knew those policies were in effect (whether or not they agreed with the policies themselves), and, finally, you want to document any reminders or reprimands you issue to employees about your policies in order to demonstrate that you gave an employee ample opportunity to correct any behavior that may have been in violation of those policies.
The best way to collect this proof is by electronically distributing your handbook and/or written warnings and having employees e-sign that they’ve received, read, and understood them. Here at CEDR, we take care of this by providing all members with an easy-to-use HR Vault where you can store and digitally share key HR files with your team. As you share your documents, you can request that all employees e-sign to acknowledge them, and the records are automatically retained for you.
3. Being “on salary” does not make an employee exempt from overtime.
It’s true that “exempt” employees must be paid a fixed salary (unless they’re doctors), but being paid on a salary does not automatically qualify an employee as exempt from overtime payments.
Why? Because being paid on a salary basis is not, by definition, what makes an employee “exempt” from wage and hour rules—instead, strict and complex federal Department of Labor criteria help you figure out that distinction. At CEDR, we most commonly see the “exempt” designation misapplied to dental hygienists though, in most cases, hygienists do not meet the requirements necessary to be classified as “exempt” from FLSA guidelines.
Exemption or non-exemption is what determines whether you must maintain records of the exact hours employees work and whether overtime must be paid when applicable. For properly exempt employees — usually doctors or high-level managers — these requirements don’t apply.
The key is to remember that both exempt employees and nonexempt employees can be paid salaries if that’s how you prefer to pay. But non-exempt employees still must track hours and be paid overtime whenever overtime hours are worked.
4. Your status as an at-will employer is not carte blanche to fire anytime with impunity.
At-will employment is often misunderstood and given way too much credit. Technically, it does mean that you, as the employer, can fire an employee anytime for any reason that’s not illegal, or for no reason. What it doesn’t mean is that you should—because, in far too many cases, if you fire an employee for “no reason,” you’re inviting a mess of easily avoidable legal risk. It might even get you sued.
There are a couple of reasons for this. First, while most employers have heard about their special at-will superpower, far too few have heard how easy it is to damage your at-will status. This is most often done by accidentally implying or promising employment for a period of time, whether in a new hire letter, a corrective action with incautious wording, or even by using the wrong phrasing in your employee handbook.
Second, while being able to fire “for any (legal) reason or for no reason” sounds powerful, firing for “no reason” – or simply declining to give a reason for letting an employee go — makes it easy for the frustrated ex-employee and/or their attorney to make up a reason for you. It’s hard to allege that you didn’t discriminate or retaliate if the employee presents halfway decent evidence and you’re claiming you fired for “no reason.”
And the illegal factors for which you cannot terminate are numerous, including many protected classes and statuses. It’s much better if you can prove, just in case, that you terminated for legitimate business reasons — not because your employee was Asian, or turning fifty, or had talked with coworkers about her salary, her desire to start a family, or because she had taken a sick day.
5. Borrowing policies is like borrowing somebody’s toothbrush.
When a practice is new or you’re trying to make it run better, it can sound like a great shortcut to adopt a few policies or an entire handbook from a colleague or friend. But if you’re tempted, ask yourself this: Would you borrow their toothbrush?
Probably not. After all, you don’t know where it’s been, and you do know it could carry unseen risks! And a toothbrush at least usually originates at the grocery store. Who knows where your friend’s handbook came from? They might have gotten it as a one-size-fits-all template, meaning it likely didn’t fit them right, and it can’t possibly fit you. Or they might have written or tweaked it themselves—inadvisably, if they’re not an attorney or true HR expert. The borrowed handbook might be hiding language that looks innocent but, like invisible germs, could destroy the health of your practice.
And we’re not just talking about the flu, but your healthy finances! Badly written, borrowed policies create more HR problems than they solve. They can also lead to unintentional lawbreaking (and therefore penalties, expensive fines, back pay or other damages, and embarrassment), are almost never up-to-date, and using them for your business can make successful employee claims and lawsuits against you much more likely.
There you have it—5 HR basics that every owner or manager should keep in mind (ask us tomorrow and we might come up with 5 more that are just as indispensable).
The truth is, the “most important” HR concept of all is knowing that you’ve achieved basic compliance and you’ve got the right resources at your fingertips—because you shouldn’t have to be a manager AND a highly trained HR expert AND an employment law attorney to run your business.