Three HR Basics for Small Business Owners

One of the most exciting aspects of running a small business is hiring employees, assembling a team, and creating a positive and proactive company culture. But if developing your team is exciting, it can also be a little bit daunting. This is especially true when it comes to human resources responsibilities. The reality is that there are a number of laws and regulations that govern the HR process and unless you happen to have a background in benefits or employee relations, it’s natural to find the regulatory process overwhelming. The good news is that, if you have a company of fewer than 50 employees, most of your HR duties can be broken down into three basic categories.


Maintaining Employee Files

First, you need to maintain files for every employee on your payroll. These files fall into three main buckets.

  • I-9 files. This is a government form that simply verifies that an employee is legally qualified to work in the U.S. You should keep all employee I-9s together in a single place, as opposed to keeping them under separate files for each employee.
  • General employee files. In addition to your I-9 file, you’ll want to have an individual file for each employee on your team. These files are strictly for your benefit as a business owner, to help you stay organized. In each file, place any documents associated with that employee. Examples include resumes, performance reviews, W-4s, and records of any disciplinary actions.
  • Medical files. You should also have separate employee-specific files that contain medical information, including disability information and doctors’ notes. Because of the sensitive nature of this information, you will want to keep these files especially safe and secure.

Note: We highly recommend using an HR technology platform to help you store and catalog these documents.

Developing an Employee Handbook

Second on our list of HR basics is developing an employee handbook. This document clarifies expectations for your employees, but can also help protect your business if there is ever any kind of dispute. There is no one right way to assemble an employee handbook, and yours can be as complicated or as simple as you like. With that said, there are common elements that most handbooks include. Some of the most important ones are:

  • Information about your company’s anti-discrimination policies
  • Guidelines for employee health and safety, including OSHA guidelines
  • Policies regarding scheduling, vacations, sick days, and PTO requests
  • General information about benefits
  • Standards of conduct, including dress code, policies about tardiness, etc.
  • Policies about promotions, performance reviews, disciplinary processes, and termination

Be sure that each employee receives a copy that they can keep. Also have them sign a statement affirming that they have read the handbook. Keep this signed statement in each employee’s file.

Display Required Information

Depending on your industry and your geographic jurisdiction, you may be required to display posters about safety, wellness, worker’s compensation, etc. You can get more information about required postings from the local Chamber of Commerce, the Small Business Administration, your business attorney, or an HR consultant. You may purchase display posters or simply download them from the U.S. Department of Labor website.  For more information on display requirements, take a look at the Department of Labor website.


By handling these three basic tasks, you’ll be in a pretty good place with your HR responsibilities. And with any questions about these or more advanced HR operations, we welcome you to contact our team of experts at McAvinney Employee Benefits Services (MEBS).

Bill McAvinney is the owner of McAvinney Employee Benefits Services, an employee benefits company.

If you need assistance in establishing and growing your business, UMW SBDC can help with free business consulting.  If you have never met with a UMW SBDC consultant, please complete a Request for Consulting form at Consulting services are free and confidential.