In working with small businesses the first thing I do is ask: are there any employee problems right now? If not or even if there are, a good first step is to have an employee handbook. I know that you can get an employee handbook on line for free, I’ve seen many of them. It’s important to not just have any 10-page document that sports your company name on it. It’s essential to have a handbook that deals with the common policies that you want in place.
The handbook can help to gel your culture and should detail how you will pay overtime, list benefits, pay days, cover the at-will nature of employment, confidentiality, attendance policy, leave of absence, and discipline to name some of the most important topics. This makes it handy to have one place to keep all of your employee policies. Mainly, it’s important for it to reflect the current labor laws.
I’ve seen small business employers have an out of date reference to overtime pay that says that overtime will be paid after 8 hours. The law says OT is to be paid to non-exempt employees after 40 hours a week or 12 hours in a shift. Since the handbook stated OT was to be paid for hours worked over 8 hours, and even though employees had only worked 32 hours in that week, they still got paid overtime. Why? Because it is company policy and that overrides the law when it is for the benefit of the employee.
Conversely, if the handbook violated the law, then it would not hold up under scrutiny. In fact, it can be held against an employer as documentation that they are violating labor law. This would leave them subject to fines and penalties.