When your business is first starting out, it's doing just that - it's starting out.
Getting off the ground and trying to infiltrate your chosen industry is a challenge as is - but learning and implementing government rules and regulations regarding employee rights is even harder. Why? Because compliance laws are constantly changing.
"543,000 new business are started every month."
Small businesses face their own operations regulations that they have to worry over. According to Forbes, 543,000 new business are started every month - and that's just in the U.S. Unfortunately, many of these young entrepreneurs are forced to fold, not because their product or service wasn't good enough, but because they ran out of resources. Entrepreneurs are so excited to bring their ideas to fruition that they forget that running a company involves intricate, behind the scene details that are regulated by the government. Small businesses generally run into issues that fall into the following categories: Finances, people and time.
Here are the top four compliance rules your human resources department needs to be focusing on right now:
1. Wage and hour laws
Proper management of payroll can be tricky - there are several wage and hours laws that pertain to employers and employees separately. The whole mess of it can be confusing, but if you aren't aware of the basics, like minimum wage and overtime, you could risk hurting your entire company's budget. Not managing the company's finances properly is one of the biggest reasons a majority of those 543,000 new businesses will fail, reported Forbes.
On the other hand, Small Business Trends explained that new businesses lack a line of credit or proper sources for funding, making it hard to get help from the banks should your company need it. Without guided planning or in the event of oversight, business owners run the risk of drying up their financial resources.
2. Employee rights and anti-discrimination laws
Not paying proper due diligence to these laws is one of the many reasons small companies churn and burn through employees - but when you're just starting out, building a strong team and retaining them is going to help you tremendously. If your company isn't paying enough attention to these regulations, you might even be facing a lawsuit - which can be a death sentence for a budding business. Right now, there is a spotlight on gender identity discrimination with transgender employees. If employers don't set precedent for appropriate workplace conduct, or provide trainings on how employees should be more sensitive to others, they risk losing employees.
Discrimination laws are only one aspect of employee rights however, and there are a variety of other laws like safety laws, immigration laws, leave of absence regulations, and so on and so forth.
3. Benefits laws
The U.S. Small Business Administration requires employers to provide employees a handful of benefits like social security taxes, unemployment insurance, workers compensation and medical packages. But not all benefits are required by law, so you need to be able to differentiate between those and decide if you'll supply extra benefits for your employees. Keep in mind, new business owners often face issues with inadequate benefits packages, which can be upsetting to employees. Before you start hiring, you have to ask yourself what benefits you want your employees to have - like paid vacation - and how you're going to afford them.
4. General HR management duties
After reading through all the above problems with finances and personnel, it's normal to feel a little overwhelmed. Therefore, hiring the right human resources professional will be key to your company's success. Otherwise, your company could be wasting a ton of time spinning its wheels trying to stay afloat. An expert HR representative will be able to give your company insight into the nitty-gritty of all the laws and regulations. You might find that one individual might not be enough. Rules are constantly changing, so it's understandable that any one person would have trouble keeping up. But you can't risk falling out of compliance on any front.
It's too much for new business owners as well - you don't have time to fully delve into. Fortunately, there are HR outsourcing companies that can help you sort through everything and promote success for your company overall.