Navigating HR compliance in California can be tricky, and small businesses often make avoidable mistakes that lead to significant risks. From failing to classify employees properly to overlooking meal break laws, these common HR errors can result in lawsuits, fines, and disrupted operations.
In this blog, we'll highlight the top 6 HR mistakes small businesses often make, the potential risks involved, and practical solutions to help you avoid them. Ensuring compliance not only protects your business but also fosters a better work environment for employees.
Misclassification of Employees
Mistake: Classifying employees as independent contractors or exempt when they should be non-exempt.
Potential Risk: Significant penalties, back wages, and litigation for unpaid overtime or benefits.
The Fix: Conduct regular audits of job roles and classifications to ensure compliance with California laws like AB5. Seek professional HR advice when necessary.
Meal and Rest Break Violations
Mistake: Not providing proper meal and rest breaks as required by California law.
Potential Risk: Fines and lawsuits for missed breaks, unpaid wages, and penalties.
The 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.
Potential Risk: Audits, penalties, and legal action due to non-compliance with record-keeping requirements.
The 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.
Potential Risk: Legal claims for wrongful termination or wage disputes, leading to financial penalties.
The Fix: Develop clear termination procedures and ensure final pay is delivered immediately or as required by law. Use checklists to avoid errors and seek professional HR advice whenever terminating an employee,
Lack of Harassment Prevention Training
Mistake: Not providing mandatory harassment prevention and other mandated CA compliance training, especially as required by SB 1343 and SB 553.
Potential Risk: Increased risk of harassment claims, lawsuits, and fines for non-compliance.
The 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.
Potential Risk: Difficulty defending against wrongful termination claims or labor disputes, leading to costly settlements.
The Fix: Implement a clear documentation process for all employee-related matters, ensuring consistency and transparency in record-keeping. Don't forget peer-to-peer employment conflicts. Investigate and document!
By addressing these common HR mistakes, businesses can minimize legal risks and ensure smoother operations. Stay proactive and informed about California’s complex labor laws to avoid costly errors.
The HR experts at Inifnium HR know how to implement practices and procedures, including automated HR functions that will help you stay compliant. Give us a shout if we can assist you in any way.