The 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:
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:
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:
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:
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:
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 – www.eeoc.gov
Department of Labor – www.dol.gov