How to Hire Staff for Your Small Business

Wondering how to hire staff for your small business?

Hiring new employees is exciting—but it can also be nerve-wracking. You want to be sure you find the right person, of course—someone who has the skills to do the job well and who’s a good fit for your company culture.

But you also need to be sure you’re in compliance with all local, state, and federal regulations when going through the hiring process. And once you find the perfect person for the role, you want to be sure you’re complying with all regulations when you bring them on board.

Hiring the wrong person or hiring the wrong way can cost time and money that few small businesses have to spare. We’ve put together this short guide on how to hire staff for small businesses so that you’ll know the steps you need to take to bring the right people on board the right way.

1. Create the job description

In most cases, your job description will be your prospective employee’s first introduction to the role, and possibly to your company. It should provide a clear description of the job duties while adhering to legal requirements.

Job descriptions can also be used as legal justification for hiring (or not hiring) a particular candidate. On the flip side, they can and have been used against employers in lawsuits as evidence of discrimination. It pays to make sure yours is well-crafted, accurate, and non-discriminatory.

Job descriptions typically include the following:

  • Job title
  • A brief description of your company and how this role works within it
  • Department and/or supervisor’s title
  • Job duties
  • Salary range and/or benefits

Even before writing the description, however, it’s important to decide which of the following categories the job falls into. Not only should you include this information in the job description, but it’s smart for your company’s sake to be clear about what you really need.

Full-time or part-time

Full-time positions are those that call for 30 hours or more per week. Employers are legally required to offer certain benefits to full-time employees.

Requirements for employee benefits vary based on location and the size of your company. In most cases, you’re required to offer full-time employees health insurance, workers’ compensation insurance, and social security, Medicare, and Federal Insurance Contributions. Many employers offer other benefits such as retirement savings plans, life insurance, or education assistance.

Employee or contractor

A permanent employee is hired for the long term, with no set end date to their employment. But maybe you need seasonal help or a specific set of skills for a short-term project. In that case, an independent contractor, who can provide the labor you need when and only when you need it, might be a better bet.

You’re required by law to extend benefits to permanent employees, but not to contractors. However, if you end up treating a contractor like a regular employee—for example, with full-time work, set hours, and no clear deadline for your working relationship—you may be required to offer those same benefits to them.

Exempt or non-exempt

Exempt employees typically earn a salary, make at least $684 a week, and aren’t eligible for overtime pay. Non-exempt employees, on the other hand, are paid by the hour and must be paid overtime if they work more than 40 hours in any given week.

While this is based on federal criteria, the rules around exemption vary from state to state. Misclassifying employees can lead to stiff fines, so be sure you understand the rules and how to stay in compliance.

2. Determine required qualifications

Describing the qualities and qualifications you’re looking for in a candidate should be a straightforward task, but it pays to be extra careful when crafting this part of your job description.

Watch out for language and requirements that could be considered discriminatory. Avoid the use of gendered language (for example, referring to a potential candidate as “he” or using terms like “salesman”) or insisting on qualifications that aren’t truly necessary to execute the duties of the job.

The Equal Employment Opportunity Commission (EEOC) distinguishes between “essential” and “marginal” job functions. Essential functions are those that are necessary for the completion of the job’s duties, whereas marginal ones are not. For example, the ability to pack and label a box for shipping might be an essential function, but the ability to stand while doing it may be marginal.

Essential job functions can be used to determine whether employees are protected by the Americans with Disabilities Act (ADA). Be careful not to accidentally discriminate against potential employees by characterizing marginal functions as essential ones.

Among your qualifications, you’ll want to include requirements for:

  • Skills and knowledge
  • Years of work experience
  • Education or certification(s)
  • Any physical and environmental demands

Determining the qualifications you really need is one of the most important things employers can do when deciding how to hire staff for small businesses.

3. Research local employment law

State and local laws regarding minimum wage, equal pay, background checks, drug screenings, garnishments, and other employee-related situations vary widely.

For example, several states have passed Equal Pay Acts requiring employers to pay employees equal pay for work of a “comparable character,” meaning you can’t offer a higher salary for one position over another if they both call for substantially similar skills, knowledge, responsibilities, and efforts.

The rules around background checks vary from state to state as well. Some states require employers to refrain from asking potential candidates about any criminal history until a conditional job offer has been made, for instance.

Similarly, some states require that candidates are made aware upfront if a drug screening will be part of the hiring process or prohibit an employer from requiring a drug test before making a job offer, for example. And of course, rules around screening for cannabis use are changing rapidly as it becomes legal in more and more states.

Staying abreast of rapidly changing state and local laws helps ensure a hassle-free hiring process.

4. Use a reliable screening service

Knowing all the regulations isn’t enough to maintain compliance. You also need a screening service provider who will comply with all local and state regulations when conducting pre-employment background checks. Your vendor should also be able to assist in the compliance process, rather than requiring you to be your own compliance expert.

The good news is that a knowledgeable, trusted provider will both know the regulations and advise you on best practices. At Eaglescreen, our technology also allows you to deliver all of the paperwork required for a background check to an applicant with the click of a button, simplifying and streamlining your process.

5. Keep accurate pay records

You’ll want to be sure that you’re keeping accurate and complete pay records for all your employees including times and days worked, overtime hours, regular hourly pay, additions and deductions, and total wages paid per pay period. 

The Fair Labor Standards Act (FLSA) and the Department of Labor (DOL) mandate the type of pay records employers are required to keep and how long they must keep them.

There are a number of federal, state, and local regulations around employee record keeping as well. Requirements for how long employee pay records need to be kept and how quickly they need to be furnished upon an employee or former employee’s request vary from state to state, so be sure you understand what your exact obligations are.

5. Set up a payroll system

If you don’t have a payroll system set up already, now is the time to do it. A well-executed payroll system can lower your tax burden, keep you in compliance with standards for compensation—and, of course, keep your employees happy!

Depending on your budget, company size, and overall needs, it might make sense to do your payroll in-house or to outsource it, either to a local accountant or bookkeeper or to a national firm.

Whether you handle it in-house or hand off the job to someone else, remember that payroll is about more than just giving your employees checks once or twice a month. Whatever system you choose, make sure it allows you to:

  • Stay in compliance with state and federal regulations
  • File employment taxes
  • Track sick days and vacation time
  • Pay your staff on time
  • Organize your tax records

Final Thoughts

When considering how to hire staff for small businesses, employers are legally and ethically obligated to treat candidates fairly and with respect. It may seem daunting, but the good news is that once you have a system in place for finding, vetting, hiring, and onboarding them, you’ll be able to hire efficiently and effectively.

{{CTA}} If you’d like to talk to one of our experts about how to screen candidates while staying compliant with all federal and state requirements, call us today.

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