I recently spent some time in the main office of a small, start-up company, and discovered that the employer was ignorant of a lot of basic employment laws that we, as HR people, take for granted. While I'm sure that most everyone reading this has all these issues covered, in case there are any newbies among us, I thought it couldn't do any harm to run through the issues that I uncovered at this company.
Posting requirements. The first thing I noticed was that they did not have any of the required federal or state law posters up. I was able to find the ones that are required free on the Internet and printed them off for them.
Form I-9. One of the employees mentioned to me that he had not filled out any paperwork when he was hired a few weeks ago. I checked and discovered that the employer did not have any I-9 forms completed for any employee. Since this is a start-up business, no employee has been there since prior to November of 1986 (when I-9s became required), so all current employees should have an I-9 on file. Additionally, since the business is not yet three years old, there should be I-9s present on all terminated employees, since I-9s must be on file until a year after termination or three years after hire, whichever is longer. Since the business is not three years old yet, the "three years after hire" date has not been hit yet, even for an employee who quit on the first day the business existed. I printed off the I-9 form for the current employees to complete, so that they can at least start to get into compliance.
Payroll. Although the appropriate taxes are being taken out of the paychecks, I was told that there are no pay stubs identifying the various deductions. This is a state law thing; not all states require pay stubs or any breakdown of deductions. But our state does. I'm not a payroll expert but it's my understanding that it doesn't have to be an actual check stub — the employer could handwrite it on the back of an envelope or a cocktail napkin should he choose to do it that way; he just has to provide the information. This is going to take a little more tact and diplomacy to fix. There is no payroll service currently being used; the owner of the business writes out the checks and manually figures the deductions. I may eventually suggest to him that he look into a payroll service, but the first step is going to be explaining the state requirements to him.
Child labor. This business uses a lot of high school help. I was not there long enough to establish if all child labor laws are being followed, but that will be something else I'll have to check on as we go forward with my consultation. Many states limit how many hours and at what times of the day minors are permitted to work; in many cases, it changes as the minor reaches their 15th, 16th, or 17th birthday. It will be quite a process to ensure that they all work only during the proscribed hours for their age bracket.
I haven't even started looking at employment policies affected by state law, including, but not limited to, sexual harassment, access to employee files, payout of unused vacation, meal breaks, and a number of others.
It's important for a start-up company to be familiar with their state laws as well as federal, since there is so much variation from state to state. Many small employers have never heard of I-9s, or realize that there are both state and federal posters that need to be displayed. If you are unsure of what requirements you may be overlooking, give the U.S. Department of Labor (DOL) or your state DOL a call, or check their websites. There's plenty of information out there!
Catherine Bannon is an HR consultant in Marshfield, MA (catherine.bannon@gmail.com). Bannon worked for 10 years in HR management before starting her consulting practice.
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