HR Options

an application for employmentThe first moment you decide to take on an employee or outsource work to a sub-contractor, you need to know about human resources.  Human resources can be an ambiguous term, but it really entails everything regarding the hiring, service, and termination of every staff member you work with.

Almost every business owner comes to a point where they find that additional help can yield exponentially greater profits.  When you reach this point, you will want to consider:

  • What tasks you need someone to accomplish on a daily, weekly, monthly, and yearly basis?
  • Does it require a full-time or part-time employee to accomplish those tasks?  Or maybe a temporary consultant or freelancer?
  • What level of education and experience is needed to accomplish those tasks?
  • What kind of compensation are your competitors offering for similar positions?
  • Can you afford to hire someone to complete the work? 

If it makes sense for you to hire an employee, you will want to consider several things before you place an ad in the newspaper.  First of all, how will you obtain their service?  Not only will you want to offer an hourly rate or salary that is comparable to similar positions in the industry, but you will also want to offer benefits.  Several kinds of benefits are:

  • Insurance, including health, vision, dental, life, etc.
  • Paid and unpaid out of office time
  • Retirement plans

Speak to your insurance broker to find out more on health plans that are affordable for your business to offer.  Consider if you will have the employee opt into and make contributions to the plan or if you will pay for the plan in its entirety.  Consider if you will offer vision, dental or prescription plans.  Consider adding life or disability insurance to the mix.  Your insurance broker and your accountant will be able to help you decide on an insurance mix that will be comparable to other employers at a price that is reasonable for your business.

After reviewing information on insurance, you will want to create policies on paid and unpaid time out of the office.  Some questions you will want to consider are:

  • Will I offer paid or unpaid sick time?  How many days a year?  Will these days accrue over the course of their employment or will they be a “use it or lose it” benefit?
  • Will I offer paid or unpaid vacation time?  How many days a year?  Will these days accrue over the course of their employment or will they need to be used within a certain time period?
  • How many days of bereavement time will I offer?  Is it paid or unpaid?  What family members will it apply to?
  • What holidays will be offered?  Are they paid or unpaid?  What about religious holidays?
  • Will I offer any personal days for family emergencies?  Will these be related to sick days?
  • Will I offer paid or unpaid jury time?  If it is paid, for how long?

Finally in regards to employee benefits, you will want to consider if you will want to offer an employee retirement plan.  There are many different kinds of plans, and each kind has different pros and cons.  You will want to consider what your competitors are offering and which one will work best for your business.  Your accountant can help you navigate these waters more thoroughly; reviewing how each one will affect your bottom line.  As a reference, some of the more popular kinds of retirement plans are Simplified Employee Pension (SEP), 401(k), Savings Incentive Match Plan for Employees (SIMPLE) Individual Retirement Accounts (IRA), and profit sharing plans.

After you decide on the kinds of benefits you will offer, you will want to document this information in an Employee Handbook or Manual.  You will outline the benefits you will offer and their terms, as well as company policies on conduct.  Be sure to include information on:

  • Office hours and meal breaks.
  • Calling off for sick days and scheduling vacation time.
  • Comp time or bonus pay.
  • Overtime pay.
  • Business expense reimbursement.
  • Paydays (and by what time paychecks will be received).
  • Dress code.
  • Smoking.
  • Use of company property for personal matters, such as personal phone calls.
  • Ethics and harassment.
  • Client confidentiality.
  • Performance reviews and salary increases.
  • Job references.

After you have created an employee manual, have your attorney review it for legality.  While you meet with him or her, ask about the interviewing process, employee records retention, and termination.  Ask about employment contracts if you will be using freelancers, non-compete clauses for your upper management, and paperwork for termination.  Consider all possible problems and employee issues that could arise.  Ask about your liabilities for harassment, injury, etc.

Throughout an employee’s tenure with your company, you will want to treat them fairly and document everything in writing.  During the interview process, you cannot discriminate an applicant based on age, race, sex, religion, sexual preference or marital status.  Employee records may contain but are not limited to signed copies of the following:

  • Resumes.
  • Job applications.
  • Acknowledgement of the employee manual.
  • Performance reviews.
  • Letters of termination or resignation. 

It may not contain any information regarding the employee’s age, race, sex, religion, sexual preference, marital status, and social security number.  Any paperwork containing that information, such as insurance applications for benefits, must be contained in a separate and secured file.  For more information on your legal and financial obligations in regards to employees, contact your attorney and accountant.  In addition, you can find helpful information on the following websites:

Equal Employment Opportunity Commission –

Department of Labor –

Books Available at the Resource Center

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