Small Business Big World
New episodes every Tuesday discussing the challenges, adventures and fun of being a small business owner. Each week we'll delve into various small business topics, from real-world DEI considerations to selling your business, using video to market your business, unique benefit offerings for your employees and so much more. Curated by the crew at Paper Trails.
Small Business Big World
HR 101 Essentials for Small Businesses
Unlock the secrets of effective HR management for your small business with our HR consultant Dawn Pahel on "Small Business Big World". Dawn and I dissect these nuances of employee classifications, alongside essential compliance topics like overtime laws and youth employment regulations. We share practical strategies for managing remote employees spread across multiple states and emphasize the importance of keeping labor law posters updated and accessible to all staff, whether they're in the office or working from home.
Tune in as we highlight the significance of annual harassment training, focusing on state-specific mandates in places like Maine and California. Dawn offers valuable tips for seasonal businesses and the benefits of digital training solutions. We also discuss the meticulous handling of I-9 forms and the strategic importance of performance development, succession planning, and backup plans for key employees.
This is Small Business Big World, our weekly podcast prepared by the team at Paper Trails. Owning and running a small business is hard. Each week, we'll dive into the challenges, headaches, trends, fun and excitement of running a small business. After all, small businesses are the heartbeat of America and our team is here to keep them beating. Welcome to Small Business Big World, our weekly podcast talking about all things small business. Today, my guest is Dawn Pell. Dawn is our HR consultant here at Paper Trails. Thank you for joining me, dawn. Thanks, chris, awesome, well, you know. So today's topic is HR 101, which is certainly kind of a boring topic for most small business owners right, but that's why we have jobs right.
Dawn Pahel:That's exciting to ask.
Chris Cuff:Yeah, I mean, that gets me up in the morning anyway. So before we dig into it, don't forget to like, follow, share rate review, subscribe all those things we are on Apple Podcasts, spotify, tiktok, instagram, facebook. Wherever you are consuming your content, we are probably there. John gets us out everywhere. If you have any questions about anything on the podcast or your questions for guests, you can always email us at podcast, at papertrailscom, and we'll get right back to you. So, dawn, hr 101, right, I know that gets you really excited but most small business owners don't think so.
Chris Cuff:No, no, it's a lot to think about when you start a small business. So what are some of the? You know, what's the first thing you think about when you know a small business owner comes to you and says I need help with HR. What's that first thing? That you go back to them and say, all right, let's start with the basics. Where are you?
Dawn Pahel:Okay, so the first thing that I say is let's talk about compliance and labor laws, because they can be really complex, depending on the size of your business, and can get you in a lot of trouble if you don't comply.
Chris Cuff:And the government has been doing a very good job of changing the rules on us all right over the last few years.
Dawn Pahel:Yes, absolutely.
Chris Cuff:Adjusting and adapting. So you know what are some of those labor laws. I know there's. You know overtime laws and child labor laws and what are some of those different things.
Dawn Pahel:So one of the things in the forefront right now is exempt versus non-exempt employees and how those are classified.
Chris Cuff:And exempt versus non-exempt. For the layperson is salary versus hourly right, correct, correct. So you know, certainly I can you know, we know this. The government has come out, federal government has come out and said we're going to raise the threshold, the salary threshold, from, you know, $30-something thousand dollars to $58,000 annually, and that's a weekly test, not an annual test. So you know, make sure we're we're keeping track of that and that certainly is affecting a lot of small business owners, right, I mean yes, correct their wage structures.
Dawn Pahel:Yes, you know it plays into budgeting purposes. So if you're budgeting, thinking that you're going to pay someone a salary and then it ends up that you have to pay them hourly plus overtime, that can really dig into your budget, sure sure, and you know why.
Chris Cuff:you know that talks about overtime. Of course, you know what other types of labor laws are out there that folks need to be aware of. You know, especially if you're just starting out or you know basics.
Dawn Pahel:Youth employment is a big one. There are a lot of regulations around employing people under the age of 18 and students that are still in school, so it's a good idea to have a really good handle on those kind of things.
Chris Cuff:And there's the big thing about these labor laws is there are usually state labor laws and then there's federal labor laws, and sometimes the federal labor law is more strict and sometimes the state labor law is more strict, right.
Dawn Pahel:Right and trying to figure out that balance and find out what applies to you. And you know, if you have businesses that are in multi-states, it can vary depending on the state, so that that can get pretty complex too.
Chris Cuff:Yeah, and really quickly. That's an HR basic thing too is, you know, labor laws and payroll and tax and all that stuff is driven by where your people are working. Right, correct, so most people are. You know, most small businesses are fortunate. They may only have one location, one state to worry about, but certainly there are plenty of small businesses us included now that have remote employees all over the place, right?
Dawn Pahel:Right? Well, it's important to remember that the laws where they're employed, the state that they're employed, those are the laws that are going to apply to them, not necessarily where the business is located.
Chris Cuff:And you know the other thing that you know that kind of leads into labor law posters, right? I mean, we were having this conversation the other day. I'm updating our labor law posters here at the office because I have not been as compliant as we should be. And you know, the state and the federal government require that we put all these labor law posters up to let the employees know about their rights, right, and how does that work with, you know, remote employees in different locations and all that stuff?
Dawn Pahel:Right. So if you have remote employees that are not coming into a physical location, you need to provide those posters digitally and you need to keep them up to date for each state that your employees work in.
Chris Cuff:Right, and they change often.
Dawn Pahel:Very often.
Chris Cuff:And the state may come out. I mean, in Maine they just came out with a brand new one, right, you know, the veterans right, right, yep, and so you've got to.
Dawn Pahel:You know, stay on top of making sure that those get posted either physically or digitally every time that they update a poster or include a new poster.
Chris Cuff:How should small businesses stay on top of keeping up with all these changes and new rules and regulations? And when the state makes a change or a new labor law poster, how do they stay on top of that?
Dawn Pahel:They need to go to the Paper Trails website.
Chris Cuff:Well, we certainly do a good job with that, keeping those out there. We send things out as they come up. But I mean, are there any resources out there, even when we all get so many newsletters? But I don't know, is there?
Dawn Pahel:anything that you know of that you know can keep people on top of this. The SHRM Society for Human Resources Management website does a really good job of posting news bulletins daily and weekly on any of the labor law changes. The Department of Labor website and the state of Maine also do a good job.
Chris Cuff:Yeah, and I would also say you know, stick with your trade associations. They do a pretty good job of keeping an eye on changing regulations for your industry, right, if there's things that are coming up that are going to affect you.
Dawn Pahel:Yes, most of those trade associations are pretty good too, very industry specific for you.
Chris Cuff:So let's move on from the labor law compliance, which, of course, is probably the bedrock of HR, but let's talk about hiring. And how do small businesses? Certainly we know small businesses are having a hard time finding talent, and maybe talent is the wrong word. I guess there's finding bodies in some cases, right, but certainly you know how should folks go about finding talent and managing that and so forth? How should folks go about finding talent and managing that and so forth.
Dawn Pahel:So it's really important to have accurate job descriptions that outline the duties required for the position.
Chris Cuff:Why? Because we've got clients all the time that say I don't need a job description. Why do they need a job description?
Dawn Pahel:So it's really important to have job descriptions that clearly define the roles and responsibilities so that people know what is expected of them Well, what they're coming to work for, right, right, and that's important. I mean the roles and responsibilities so that people know what is expected of them, well, what they're coming to work for, right, right, and that's important.
Chris Cuff:I mean gosh, and certainly you know every business might be unique and if you look at you know I guess a serving position is probably pretty consistent but some restaurants may have a different structure or responsibilities than others in certain examples, right? So I think if you have something unique, it's important to have that.
Dawn Pahel:Right, and I mean to set employees up for success, they need to know what's expected of them and what their duties and responsibilities are on a day-to-day basis. Sure.
Chris Cuff:And that's you know. That's the basics of setting the expectation right. There's much more that goes into managing employees, but so, once you get your job description, where do you go from there? How do you get people to come in the door and how do you onto the floor to work?
Dawn Pahel:So this is where a really good handbook that talks about your benefit plans or things specific to your organization that would be a benefit to the employee the paid time off, holiday pay, health and dental and vision plans and that sort of thing that might set you apart from your competition.
Chris Cuff:Right. So what else should should employers be putting in their handbooks, right? I mean, that's a pretty important thing that every employer should have. What else should go in?
Dawn Pahel:there. Definitely all of your company-specific policies need to be addressed in your handbook. That can get very extensive. So one of the ways that you can do that is you can address the policy and then have a separate freestanding policy that goes into more detail.
Chris Cuff:And certainly you know. You and I have seen many different handbooks, from the bare bones to wow, that's been way overdone.
Dawn Pahel:Right, yes, one extreme to the other.
Chris Cuff:Certainly, I think we both probably tend to agree that there's somewhere in the middle to keep things going. But I have seen clients with 200-page employee handbooks and let's be real, what employee is actually going to look at that?
Dawn Pahel:Yeah, the chance that an employee is going to read all 200 pages is very slim. So if you pare that down to about, I think 40 to 50 pages is a good happy medium.
Chris Cuff:Yeah, and you know, we see, I always say we see clients that try to manage their people through their policy or manage their people through technology, and that's you still have to manage your people folks. You can't be, you know you really, just you can't, you can't manage on paper.
Dawn Pahel:No, no, it's definitely a human interaction.
Chris Cuff:What you know. Once we get them in, we've told them you know what we're doing, what their job is, what they're going to be getting for benefits, pay, all that fun stuff. How are you managing them and managing their performance and their growth and development?
Dawn Pahel:So every organization should have a performance management slash, performance development plan for each of their employees, so that they can set goals and have a place to go from the starting point.
Chris Cuff:Yeah, just growing internally is really important. Most employees don't want to just come in and be that basic, you know, line worker forever. They want to be, you know, moving up in the world, right.
Dawn Pahel:Right. They definitely want to know what their path for growth is and you know, see how they can get there and how you can help them get there.
Chris Cuff:Right Now you know I think most small businesses probably don't have any sort of performance management or employee review process.
Dawn Pahel:Why do you think that that's really important for small businesses in particular? Well, with the competition in the job market right now, people need to know where they stand, they need to know that there is a path for growth and what is going to be expected of them to get to that next level.
Chris Cuff:Right, and you know, I think most people think of a performance review as a negative connotation, right, and they're always like, oh, I'm going to get scolded or told how terrible of a job I am. But you know, we look at it as an opportunity for kind of a 360 evaluation. Okay, how do you think you're doing right and let's validate that. You know, and, and you know where do you think you can? I think when you ask people that question, you're like, oh yeah, well, I'm really just not a great public speaker. I'm just not really great at coming on podcasts and doing this with chris, right, I don't know anything about that.
Chris Cuff:So, and then that's me challenging you to try something new, right? So you know I I think that performance evaluations are certainly important because it, like you said, it sets the baseline and the expectation of where the organization needs to go, where the individual needs to go, and, you know, just kind of aligns expectations.
Dawn Pahel:Right, and one of the things that I always tell business owners is that there should never be any surprises on a performance evaluation. People should know what's coming at them.
Chris Cuff:Absolutely, and you know by the time you have to go and work through some performance improvement plan, for example. Same kind of thing. You know it shouldn't be a surprise If you have to terminate someone. It shouldn't be a surprise, right, if you've been managing them correctly.
Dawn Pahel:Right, they should. They should know if they're being called into a meeting. They should know why they're. They're coming into that meeting, right.
Chris Cuff:Right, which that's a whole different conversation. Termination yes, yes, maybe we'll do a whole episode on that.
Dawn Pahel:Yeah, I was going to say that's going to be a whole podcast, all itself.
Chris Cuff:Oh good, so you know, certainly you know, getting that, those performance evaluations and development plans in place is important, but what other types of training and development opportunities are you seeing that small businesses really should be thinking?
Dawn Pahel:about. You know things that are specific to their industry are really important. I know you know there are restaurant safety trainings and things like that that have to be completed annually. You know there are also some state and federal trainings that need to be completed annually as well. Harassment training is something that the state of Maine requires for every employer to have a training for their employees annually.
Chris Cuff:Which? How many employees are actually doing that?
Dawn Pahel:Not as many as I would like to see.
Chris Cuff:It's certainly you know. I think there's great goals and there are some states that are much more rigorous in those requirements for training, right?
Dawn Pahel:Right.
Chris Cuff:I think California is like one of those states where, gosh, you know, they have the sexual harassment training police on the road every day, and because it's important, of course, but they're just. The employment culture is much different in certain states than it is here in the Northeast in general, so we are somewhat fortunate in the lack of enforcement, I would say just unless there's you, there's big issues there. The state of Maine anyway is really good at teaching rather than smacking you with the ruler.
Dawn Pahel:Right, right, and it's challenging, especially if you have a seasonal business, to get all of this fit in, but there are some ways that it can be done digitally that are a lot more time effective and you can kind of get it knocked out for all of your employees pretty quickly.
Chris Cuff:Yeah, Especially if you're a seasonal employer, you can come in and say hey, you know, we're opening meeting, right, we're going to have a half a day training, we're going to run through all these things. Here's all the new things this season. I think it's probably easier for seasonal business anyway just to say gosh, we're going to do this one day mandatory training kind of thing for most of us to have for a couple of days or whatever.
Dawn Pahel:Right yeah, get everybody all at once.
Chris Cuff:What kind of documentation do you know? Employee paperwork other types of documentation do small businesses need to be keeping for their employees? I mean, that's a biggie that most people aren't great with either.
Dawn Pahel:Right. No, employee files are a big thing. First and foremost, you need to have a accurate and complete I-9 form for every employee which is filed separately than their employee file. It should not be filed in their employee file.
Chris Cuff:Why is that?
Dawn Pahel:So you don't want to keep it in the employee file because there is some personal information that you wouldn't want to be shared with managers if they're pulling the employee file for other purposes, and also, too, if you do get chosen for an audit, it's really nice to be able to hand the auditor a binder that they can go through and they're not digging through individual employee files.
Chris Cuff:And that's one form, the I-9, that is. For whatever reason, it's very audited right. Ins is out there auditing these a lot.
Dawn Pahel:Yes, very much, and there are some pretty big fines that go along with either not having an I-9 or not having it completed correctly, which is literally like the name on the wrong line, Like if there's a blank line they'll gig you for that.
Chris Cuff:There's lots and lots of things. I mean, they're very particular right.
Dawn Pahel:Yeah, I was just making a checklist for a client yesterday and there is a 20 plus page booklet on how to complete a one page I-9 form.
Chris Cuff:Yeah, it's kind of crazy. So you know, certainly we've seen the introduction of E-Verify, which helps your I-9 compliance but doesn't replace the I-9 compliance, correct.
Dawn Pahel:No, you still have to physically view each of the documents and record the information into the I-9 form so that you can then load it into E-Verify Right.
Chris Cuff:So that's a tricky one for sure. What other documentation?
Dawn Pahel:you know, do you think folks should have that you want to keep separately is anything with any sort of medical information, any kind of drug testing or pre-employment physicals. All of those need to be kept in a separate file, away from the main employee file.
Chris Cuff:So we have three employee files.
Dawn Pahel:Correct, correct Sounds like a great time. Yes, yes.
Chris Cuff:Any other? What about the tax forms? What about those?
Dawn Pahel:have to be in there too, yeah you need to have a completed w-4 form um for federal and then um as applicable for each state um. So you know maine has a state tax, so you would need a main w-4 for any main employees that you have you know, those are the basics, right?
Chris Cuff:we've gone through a lot of the different basics labor laws, hiring, you know, terminating, developing, paying, all that kind of stuff, policies. Let's think a little more strategically, right? I mean, I'm you know, I've got 10 minutes to stop and think about where I want to take my organization. What's kind of the HR strategy piece that small business can think about in terms of developing their organization?
Dawn Pahel:So always you know Um. So always you know um. Performance development for employees, um. And then you know succession planning. You probably are not going to run your business for the next 50 years, but you might like to see it carry on. So you need to think about you know. When you step away, or if you have key employees stepping away, who's going to step into that role and take over?
Chris Cuff:And that's a little bit of the development, right, you've got you know, as you're developing folks you can plan for, you know, replacements of key employees and things like that.
Dawn Pahel:Yeah, exactly. So I mean, if your management team is.
Chris Cuff:You know a couple of people you might say I have this really strong, you know junior person that could step into that role, or something Right, and you know people also, too, sometimes need to be away from work for extended periods.
Dawn Pahel:You know FMLA or you know personal leaves of absence. You need someone to be able to step in and fill that role while they're out as well.
Chris Cuff:All right, I'm going to put you on the spot now. You ready.
Dawn Pahel:I don't do well with on the spot. I know and Graham can give us a break if we need to.
Chris Cuff:But what is your biggest HR 101 horror story you've walked into and seen. Biggest HR 101 horror story you've walked into and seen.
Dawn Pahel:Zero employee files, zero I-9s no documented pay records.
Chris Cuff:It was really kind of a free-for-all. Well, there we go. So keep yourself organized. That's the first thing, and certainly you know, here at Paper Trails, we're happy to assist our clients with these types of things. This is what Don's here for is to help build that, and we have a lot of resources on our blog and on our website at papertrillscom with some HR 101, hr compliance guides, things like that that we provide just to anybody that wants them. Quite frankly, yes, and then you know, if you need help with that afterwards, please feel free and come to get in touch with us. So well, good, well, that was HR 101. Does it feel like we completed successfully? We get an A plus.
Dawn Pahel:I think we get an A plus.
Chris Cuff:All right, well, good, all right. Well, thank you everybody for joining us in this week's episode, hr 101. Don Pahel was our guest. Certainly you can reach out to us at podcast, at papertrailscom, if you have any questions about this episode or any other episode that we've done. Don't forget, like follow share rate review. We are everywhere you want us to be, I think, so keep an eye out there for all the fun stuff and otherwise we will see you next week. Thanks very much. Thanks for listening to this week's episode of Small Business Big World.
Chris Cuff:This podcast is a production of Paper Trails. We are a payroll and HR company based in Kennebunk, maine, and we serve small and mid-sized businesses across New England and the country. If you found this podcast helpful, don't forget to follow us at at paper trails payroll across all social media platforms and check us out at paper trailscom for more information. As a reminder, the views, opinions and thoughts expressed by the hosts and guests alone. The material presented in this podcast is for general information purposes only and should not be considered legal or financial advice. By inviting this guest to our podcast, paper trails does not imply endorsement of or opposition to any specific individual, organization, product or service.
