Hello Valley Business Journal Readers! I’m excited to join you and, for my first article, I wanted to share some key insights on the challenges of being a small business employer in California.
With 30 years of experience helping small businesses navigate the CA employment environment, I can tell you—it’s not easy! Our state’s laws are constantly evolving, and the labor market has been especially tough since before Covid.
As a small business owner, mistakes can be costly. That’s why I’m diving into the top 6 HR mistakes we commonly see and how to avoid them. Let’s make sure you’re set up for success in this challenging environment!
Misclassification of Employees
Mistake: Classifying employees as independent contractors or exempt when they should be non-exempt.
Risk: Significant penalties, back wages, and litigation for unpaid overtime or benefits.
Fix: Conduct regular audits of job roles and classifications to ensure compliance with California laws like AB5. Seek HR advice before classifying anyone as 1099.
Meal and Rest Break Violations
Mistake: Not providing proper meal and rest breaks as required by California law.
Risk: Fines and lawsuits for missed, short or late breaks, unpaid wages, and penalties.
Fix: Establish a timekeeping system that tracks breaks and ensures employees receive their mandated rest periods. Train managers on compliance.
Incomplete Employee Records
Mistake: Not maintaining accurate records of wages, hours worked, and personal information.
Risk: Audits, penalties, and legal action due to non-compliance with record-keeping requirements.
Fix: Implement a digital HR system to automate record-keeping and regularly review files to ensure they meet legal standards. It all starts with onboarding!
Improper Handling of Terminations
Mistake: Failing to follow correct procedures during terminations or not providing final pay on time.
Risk: Legal claims for wrongful termination or wage disputes, leading to financial penalties.
Fix: Develop clear termination procedures and ensure final pay is delivered as required by law. Use checklists to avoid errors and seek professional HR advice whenever terminating an employee.
Lack of Harassment and Violence Prevention Training
Mistake: Not providing mandatory CA Harassment and Workplace Violence Prevention training, especially as required by SB 1343 and SB 553.
Risk: Increased risk of harassment claims, lawsuits, and fines for non-compliance.
Fix: Schedule regular harassment and violence prevention training for all employees and supervisors. Track attendance and provide training materials that meet state requirements.
Not Properly Documenting Employment Issues
Mistake: Failing to document performance issues, disciplinary actions, or employee disputes.
Risk: Difficulty defending against wrongful termination claims or labor disputes, leading to costly settlements, as well as lack of confidence in making tough employment decisions.
Fix: Implement a clear documentation process for all employee-related matters, including disciplinary, attendance, and performance issues.
Addressing these HR mistakes can help minimize legal risks and keep your operations running smoothly. Be proactive in understanding CA labor laws. At Infinium HR, we offer solutions to automate HR functions and keep you compliant. Reach out if we can help!
