Menu
Your First HR Department: A Step-by-Step Guide -pt 1
By VICKY BROWN
So, did you just get the gift of having HR added to your responsibilities? Yep, I can hear you silently screaming right now. And to top it off, you’re thinking – but, I don’t know diddly about HR!
Well, creating a basic HR structure for your company doesn’t require becoming an HR professional – but it does demand that you understand key elements. In these episodes, I’m going to guide you through the essential steps to create a bare-bones HR function that will give you a bit of compliance peace of mind, and hopefully not send you running into the night.
Oh, and yes, I did say episodeS.
Well, what can I say – I thought it would be only one, but as I went through the materials, I realized it would never get successfully smushed into one episode. So we’ll start with the series this week with Staffing, Employee Classifications and Background Checks, then next week move on to setting up Payroll, compliance and record keeping; and finish with part 3 – New Hires, Terminations and Employee Benefits.
So, let’s dive right in. Searching for, and selecting, the right candidate does not need to be painful. But making that happen takes more than knowing the right interview questions to ask.
First up, figure out what you need.
A successful interview starts by finding the right candidates; and you can’t find the right candidates if you don’t know what skills, experience and attributes you need. A solid job description helps potential candidates understand the expectations and requirements of the job – the goal is to help them self select, so qualified applicants will apply, and unqualified ones won’t. Here are some questions to help you in writing the job description.
- What are the expectations of the position and what do you want the person to accomplish?
- Is anyone currently in the position, if so, what personal characteristics make them successful in the position (is it attention to detail, strategic thinking, project management etc.)
- What previous experience will help someone succeed in the job?
- Are there educational or equivalent experience requirements? (BTW: be careful using educational requirements alone, you may run afoul of anti discrimination laws. Yes, it’s easy to accidentally fall into this pit – so I suggest asking for either education or equivalent experience.
- Who will this position report to?
- Where will they be working?
Next, figure out where to look.
How do you get the word out about your job opening, you have to post the position. Generally, postings come in two formats: short form (more of an ad version of the job description) and long form. Which version applies depends on the platform’s guidelines.
A quick legal note – make sure all your postings have equal opportunity employer language and don’t ask about prior salary (that’s illegal in some states). You may also have to list the salary range for the job and other notices, depending on the requirements of your state and/or city.
“…I am absolutely certain that you have a much larger number of non exempt employees than you think you have (I know this, because it is almost always the case – this is the most common misclassification, classifying a job as exempt when it should be non-exempt)”
Now, decide who is best for the job.
The interview starts long before someone walks in your office and you ask them where they plan to be in 5 years (BTW – don’t ever ask that question!). Interviews start with the resume. No matter if you’re the first one to see the resume, or you have someone who does the initial screening – your job is the same in both cases. Compare the resume with the job description to determine three things; 1) is there a match of qualifications and experience, with what you need, 2) what additional information do you need regarding items listed on the resume, 3) what information do you need regarding items not listed on the resume.
Focus on #2 and #3 – information you need. This will form the backbone of your interview questions. Your goal is to identify and measure competencies (a fancy HR word for abilities). You are delving into competencies in order to measure the candidate’s level of expertise.
Next, let’s talk about employee classifications. You see, the people responsible for the regulations around employment (you know, the Dept of Labor, the IRS, your local state employment departments) consider everyone who works in the US as eligible for overtime. That’s right, you get overtime, and you get overtime, everyone gets overtime!
That is, unless your job is EXEMPT from the overtime rules. See, that’s how they get Exempt, meaning exempt from overtime rules, and Non Exempt, meaning NOT exempted from the overtime rules.
So, how do you know if your job is Exempt from the overtime rules. Well, the feds, and even some states, put together specific guidelines that a job has to meet, in order to qualify as exempt from overtime. Everybody gets in on setting the rules, because when you pay overtime, you also have to pay payroll taxes on top of the overtime amount. And, to put it mildly, the IRS want’s their payroll taxes.
There are 6 exempt categories – keep in mind, you have to see how the job stacks up against the exempt categories to figure out if the it qualifies as exempt (again, meaning not eligible for overtime) or non exempt (meaning eligible for overtime). They are:
- Executive
- Administrative
- Professional
- Computer Professional
- Outside Sales
- Highly Compensated
I’m not going to take the time to deep dive into the categories here, but keep two things in mind
#1 – I am absolutely certain that you have a much larger number of non exempt employees than you think you have (I know this, because it is almost always the case – this is the most common misclassification, classifying a job as exempt when it should be non-exempt)
and
#2 – I cannot impress upon you strongly enough that you need to be very careful before you classify a job as exempt. Don’t be shy about reaching out to your labor atty (and yes, you should have one) if you can’t figure it out. This is not a good calculation to get wrong – it can be very expensive.
OK – now on to independent contractors.
Technically speaking, an independent contractor is a separate business. Now it may be a business of one, but the official officials, consider it a separate business. So that independent contractor, or business of one, has all the responsibilities of any other business. They have to pay their own taxes, sell their services to more than just you, use their own equipment and expertise – basically not be under your direct control. They are just there to provide a product or service, and how that happens should be up to them.
So, one of your employees just told you that she’s pregnant. Feeling overwhelmed, with no idea where to start? After all, HR just got dumped on your plate. It’s not your zone of genius, and you don’t want it to be.
Managing California Leave is your answer. It’s an easy to understand course, that explains what the various leave programs are – without the HR gobbledy gook. And it gives you a clear step by step guide that walks you through the process of putting someone on leave
Yep, you get all the forms, notices and documents too. Everything you need to do it right and do it fast. After all, you don’t have all day – you have other things to do!
Use the link to get an Insider’s sneak peek And don’t worry – you’ve got this. And we’ve got you.
Now there’s a lot of confusion around independent contractors, and what qualifies as one. Mostly because there are a lot of agencies with fingers in the pie. At the federal level, the Department of Labor has an opinion (and a set of guidelines), and the IRS has an opinion (and another set of guidelines). And then there are various states, and their opinions and guidelines. And while your contractor might meet the guidelines of one, or two, they may not meet the guidelines of the third. And if they miss the guidelines of any one of them, then they won’t qualify as an independent contractor.
For instance, in California, with few exceptions, if the contractor is performing work that’s critical to your business (for instance, you’re a copywriting service, and you take on a contractor to do copywriting), then they can’t qualify as an independent contractor. That’s the B in California’s ABC independent contractor rule. And, as you might guess, that knocks out a large block on independent contractors.
Onward to Background Checks. There are a fair number of regulations about background checks, at the state, and sometimes local level as well.
I feel like this is a good time to have a chat about online searches. As an employer – just don’t do them!
I know there are a lot of sites that say you can check someone’s background or record for free. The downside of many of these sites is that you can’t know for sure that you have the full and accurate picture. Generally they look at digital public records, while a full background check will include national, state and county level searches as well as verifying identity, social security numbers, and sometimes even education
Full service background checking companies use digital records as well, but they also use actual humans making phone calls, and sometimes even physical records (that means they may even send someone to the county records building). And finally, when you hire an established background check company, you get the added benefit of knowing they comply with the various background regulations.
Honestly, I have the same concerns about Do it yourself background checks. You aren’t an expert in this area (that is – unless you run a background check company). And the likelihood you’ll either not get all the information you need, or accidentally take the wrong step and violate a regulation, is really high. Why take the chance?
So what are those regulations
First up – make a conditional offer before you run the background. The laws are different in different states, but in California, you can’t ask an applicant about some pieces of their criminal history, not even on an employment application. Things like, criminal charges that didn’t end in a conviction – are off limits.
And since background reports often provide this type of information, it’s better to just make a conditional offer of employment, and avoid the possibility of getting dinged for a violation.
A conditional offer is just like a regular employment offer, except it states that the offer is conditioned on receiving satisfactory references which may include a background check.
Next – there are a whole host of required notices and authorizations that have to happen before you run a background check, and for the most part they have to be stand alone notices. You can’t bury some language in another form, and you can’t combine the notices. They get to shine all on their own.
Background checks fall under the Fair Credit Reporting Act – you know, that thing you hope will help you when you’re fighting with your credit card company. Well, they cover background investigation notices too. You have to provide the federal and state disclosure notices, rights summaries, and you have to get written consent from the applicant. Generally your background check company will provide all these documents to you for use with candidates – just a call out – it’s really important that you provide all these notices and get the consent BEFORE you run the background check.
And what happens if it comes back with a ding on it? Well, that’s a whole other ball of wax, depending on your state. So I’m going to point you in the direction of your counsel.
Spread the word
MORE HUMAN, MORE RESOURCES
310.308.7680 option 1
hello@idomeneoinc.com