Mission to Grow: A Small Business Guide to Cash, Compliance, and the War for Talent

MTG - 131 - eBook Panel 2
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Mike Vannoy: [00:00:00] What is your handbook onboarding process? Right. So I think what I'm hearing from you is okay. You know, maybe not that big a difference going from employee number 15 to 16, but going from 16 to 50, there's a hell of a difference, right? That's a very different company to run. And I think what I'm hearing from you, you didn't use the words, but I will scale.

It's how do you take these best practices that you started out with being, being, you know, passionate and hardcore about managing to your culture was the right kind of culture, the kind of people that you want on board, getting that talent on board and then paying them, right? That's your core foundation.

Now, how do you scale that? And you do that with consistency and process and having well defined processes. So these things are repeatable. [00:01:00]

To Grow. This is episode two out of a four part series. Really excited. I would invite you to follow along. If you hop on the website, asuresoftware. com, uh, go to resources, uh, eBooks, uh, download HR roadmap for growing your business at every stage. Here's what we did. We put together a list of what are the, HR priorities?

What are some of the HR challenges? Uh, uh, what are, what are the tools that a business needs? Uh, and then what laws must they comply with as the, as you grow your businesses? Uh, so four chapters, the first chapter growing at one to 15 employees. We [00:02:00] covered that topic last week. Today, we're going to cover growing at 16 to 49 employees.

So. You go from, uh, employee number 16 and you're growing up to 50 or that, that world changes a whole bunch of what you need to be thinking about how you run your business. Next week, we're going to cover 50 to 150 employees and the following week in the series, we'll go 150 employees and above because each stage of this business, uh, it really calls for something very different.

We talked a lot last week in the one to 15 employees. I mean, getting culture. It's kind of everything. Employee number one, you got to get culture right and you got to get the basics. You got to get payroll, right? Okay. You got payroll, right? You've established your culture. You're hiring your people.

Probably, you know, spoiler alert time to get a little more systematic now that you're thinking about how do I go from 15 up to 50 employees? So a great panel today. Uh, if you, uh, watch the show regularly, you know, Mary Simmons, our own vice president of HR compliance consulting. [00:03:00] Welcome to the show, mayor.

Mary Simmons: Mike.

Mike Vannoy: we have Heather James who is a benefits manager in our Tampa office and expert in all things benefits administration, especially for this size audience in newcomers to this size audience. Welcome Heather and Chris Cooley who comes to us from an Asure partner, my HR screens, background screening and much, much more.

So, uh, welcome to the show, Chris.

Chris Cooley: Yeah, no, I'm glad to be here.

Mike Vannoy: Okay, so let's all if we can, let's follow along. I'm going to flip to the section. 16 to 49 employees. Um, and here we are. So you've established a culture, you're paying your employees accurately and on time. Uh, you're following the fair labor standards act that FLSA round minimum wage in overtime.

Mary, uh, I think we'll probably talk, uh, employee handbook. I recall we'll ever do together. But we established the need to have an employee handbook, kind of rules of the road. [00:04:00] Now I'd say we're, we're, we're, we're, we're kind of grown up and it's time to move to another level in the business. And as you go transition and from the 16 to 50 employees, I'll call it, just tackle the first, the first section here in the, in the ebook, what are the HR priorities at this stage?

So we're going to get to challenges in a minute, but what, what are the things that businesses need to be focused on for. For, uh, their priorities. Chris, let me start with you.

Chris Cooley: no. So, you know, as we've, to your point earlier, we've grown. We're getting into that 15, 16. larger groups. So it's setting those standards, setting those processes. Um, also what happens is as you start growing, you get a little more buzz. You have more employees, you have those things. And so it's really important to at that point.

Well, we need to, we feel we need a background check from first employee. But, um, now we've got more risk, [00:05:00] right? We've got more revenue. We've got more buzz. We have more people that, um, you know, quite honestly, there's, there's probably, there's a lot more risk from the employees that you're hiring. So it's really important to do your background checks so that, um, one, you're protecting your business from, uh, um, you want to make sure that you don't have employees out there that are doing things they shouldn't, right?

We don't want them to go on a client's location and steal or anything. Two, you're protecting your employees because you don't want a violent offender on site. You don't have to deal with that. Um, and then three, it's really insurance. It's making sure that, um, you're protecting your company from those situations, whether it's with a client or whether it's internally.

Mike Vannoy: So Chris, you obviously have a bias. You see that you see the HR world through the lens of background screens, which makes perfect sense. So what your business is, am I thinking about it right to say, okay, so I'm a small or startup kind of [00:06:00] a company. I'm one to 15 employees. Those first five employees, they could have been family members, right?

And, and, and maybe, maybe, uh, at least I start hiring outside the family by the time I get up to number 15. But it's probably true that you're, you're outside of the family. You're outside of the people, you know, you're outside of the people who know the people, you know, you're starting to hire strangers at this point when you're over 15 employees, is that fair to say?

Chris Cooley: It is what I will say too is even when you're in that 15 to 16 and you're hiring through referrals You still got to be very careful. We like for instance, we had a client um, they background checked everybody that came in as a hotel and They hired their friend's son. They've known him forever. They bring him in.

They don't background check him. They don't drug test him Um, because they know it. Well, that's well, that friend's son ends up selling drugs as a manager out of their hotel. [00:07:00] And so it's very important, you know that even if they are referrals that we're still Um, you know that we're still background checking to make sure who we're bringing into our business

Mike Vannoy: Yeah. Mary, that kind of ties back to where we were last week in the one to 15 employees, hyper protective of your culture. I got two thoughts going through my head, but I'd like you to piggyback on Chris's comment and then, and then I want your thoughts. Number one is just cause you're getting bigger. It doesn't mean you get to forget culture.

You need to protect that fiercely. And then you do have to be thinking about risk mitigation. Okay. I don't know this person or I don't really know them. They're there. Maybe they were referred to me. Um, why, why do you have to, or why should you be at least considering background checks piggyback on crisp?

Then what are the priorities that you see? I

Mary Simmons: Yeah. So a couple of things that Chris brought up that make a lot of sense. First of all, you can't be inconsistent. So that [00:08:00] organization, even though they knew the person that was referred in, they obviously didn't know him well enough. Um, and whenever you're inconsistent in any of your practices, you leave yourself liable.

Now your other employees, um, and this speaks to culture, your other employees go, Oh, Because they knew him, uh, they didn't do a background check, and now look what's happened to, to the organization, right? So, that inconsistency helps, hurts the culture, and it also helps the other employees find ways to possibly leverage litigation against the organization.

So, We always want to be consistent and again, that, that, that is, uh, what I would say for employers under 16 employees, but now that we're getting a little bit bigger. As Chris said, we do need some processes. So one of the [00:09:00] things, uh, that I think these employers need to think about is an organizational chart.

So is that mandatory at all for any employers? No, it's not. But that organizational chart is going to significant. Help the growth of the organization. You don't want, if Chris was a manager, I don't want too many people under him. Uh, and if you are, uh, a high potential employee, what am I doing with you?

Where can you go next? And that's what that organizational, uh, chart helps you. It helps you understand where you need to grow, in which departments do you have the right people? Do you have the right training? It's going to inform the rest of a lot of the rest of the processes that you do, right? Where do I need training?

Uh, et cetera. Where do I need to recruit? So that organizational chart is one of the things that I would start with. We [00:10:00] talked about a handbook for the smaller employers. Now that handbook. It's going to be a little bit bigger because there's more compliance at this employee count. And then that HR function needs to be real.

What do I mean when I say that it's real? Not only does it have to have compliance, but there's best practices that we're going to recommend. In Chris's example, if I was, if we're supporting that client, we're going to say, You still have to do a background check on this young man. It's consistent. That's your process.

You stick to your process, right? That that's why the process is there, especially on the on the HR side. But those are, you know, you know, I could go on and on and on, but having those process. What are you doing for recruit? What's your recruitment process? What's your onboarding? What's performance management?

And what's your [00:11:00] termination process? All needs to be very succinctly set up for that for this organization.

Mike Vannoy: think it makes a lot of sense. I keep, I keep tying my brain back to last week, you know, one to 15 employees. Um, we didn't advocate for going by your gut, but the reality is. Everything you're doing is the first time you're doing it. Right. So establishing a culture, getting your payroll, right. Getting, I'd say, you know, getting a handbook, right.

But what is your handbook onboarding process? Right. So I think what I'm hearing from you is okay. You know, maybe not that big a difference going from employee number 15 to 16, but going from 16 to 50, there's a hell of a difference, right? That's a very different company to run. And I think what I'm hearing from you, you didn't use the words, but I will scale.

It's how do you take these best practices that you started out with being, being, you know, passionate and hardcore about managing to your culture was the right kind of culture, [00:12:00] the kind of people that you want on board, getting that talent on board and then paying them, right? That's your core foundation.

Now, how do you scale that? And you do that with consistency and process and having well defined processes. So these things are repeatable. Am I putting words in your mouth? Is that right?

Mary Simmons: No, that that's perfect. I think I would add one thing and that would be training. So now, if we have 16 to 50 employees or 49 employees, now we have some managers. So, prior to this, we had such a small organization, you know, Heather could be the owner and have. 14 employees, so you can train the employees.

Absolutely. But you probably didn't have managers to train. Now we have managers to train. So now my business owner is just a little bit further away from all of those employees from touching those employees as much as they did in that smaller business. So let's add some training on how to [00:13:00] manage people, right?

They probably, those managers know how to make the widgets of that organization pretty well, and we can't forget about that training either, but managing them, uh, or training them to manage people is very important. Ties back to every single thing we talked about process compliance.

Mike Vannoy: Yeah. Heather, let me, let me switch to you. What do you think the HR priorities are? So you come at this from, uh, from a, a day to day administering benefit plans like, uh, HSA, FSA, COBRA, et cetera, but, but, but step back from the, from the tactical for a second. What do you think the HR priorities should be for a small business as it, as it grows from 16 up to 49, 50 employees?

Okay. And

Heather James: I mean, definitely taking into consideration of that type of growth, especially as you get near that 20, 20 or more employees [00:14:00] number,

Mike Vannoy: We're going to come to

20, is.

we're going to come to 20 employees and why, why that's so important to you in a, in a, in a, but yeah, yeah.

Heather James: but no, the insurance is definitely, you know, to me as a priority, you know, being in the benefits side of the business, because, you know, this is where you start to add some value to these employees and providing them, you know, something that can help take care of themselves, their family, you know, being preventative with their healthcare so that they can show up to work every day, um, you know, and finding those right plans for, for your employees to, and adding values to those plans.

plans. So like you said, the FSAs and the HSAs, what type of plan do I have? What can I attach with that type of plan to make it richer for my employees? Um, you know, and, and maybe providing a couple of different options because maybe one plan isn't suitable for all of your staff. Um, You know, so that's where, you know, we like to have those types of conversations with clients is, you know, what kind of plans are you offering and how can you grow into those types of [00:15:00] plans too as you start to get more employees?

Mike Vannoy: It's interesting. You know, uh, Chris and Mary, you guys didn't go to benefits a lot of times. I think, yeah, I think 50 employees, affordable care act, you know, now all of a sudden the law requires me to provide increasingly. We're seeing small businesses, dare I say, forced to offer benefit plans only because they have to compete.

You know, the, the labor market is very, very tight, uh, you know, topic for another day, Mary, you and I have talked about this in many shows, the, the labor shortage is not going away. Um, uh, and, and so just to simply compete now, maybe small businesses can't, can't compete, uh, with very rich benefit plans yet.

Uh, but they do have to be thinking about benefits. Uh, Chris, Mary, Heather, jump in here. What, what are the things that you think. That small business owner, let's stick on the smaller end of this from say there's 15 to 25 ish employees. [00:16:00] How should they be thinking about benefits knowing they might not have the budget for a rich health plan, uh, vision, dental health, uh, but how should they be thinking about benefits for recruiting and retaining the kind of talent they're going to need?

Mary Simmons: No, you can't retain or attract the best talent if you don't have some benefits. So it has a direct ROI in, in, in my mind, besides the, the great reasons that Heather said, right? If your employees aren't well, and they don't have appropriate benefits. They're not coming to work for they're going to miss work for a much longer amount of time than if you've put into place some preventative health measures as well as health measures to take care of them when they're not well, but like, like, you always say, Mike, you cannot compete out there for talent.

It's very hard. If you don't have benefits right now, you're not attracting [00:17:00] or retaining. Talent.

Chris Cooley: And there are things for small groups, it's so important that they have a good a good benefits advisor Because there's so many different ways you can do it. You can do for small groups, you can do Icarus, you can do obviously level funded plans, which are so, so hot right now. So many small businesses have them because they are, they are at a lower price point, but also what we find is.

It's a lot of those little things, too. Like, we give, um, we give identity theft protection to all of our employees. Um, pet protection. All of that seems like, you know, I'm old school. All that seems kind of crazy, right? But, it's something that a lot of people like. And so, it's being creative and figuring out what these benefits are and the way that you can put them together from a tax perspective and from a cost perspective.

Heather James: Yeah. And I love that you brought up ICRA because that's, that's definitely something that's really valuable for small employers that [00:18:00] don't have a group plan, but they want to help with the costs associated with an individual policy that the employee has gone out and purchased on their, on their

Mike Vannoy: going to have to explain that acronym that you just said.

Heather James: Individual coverage HRA.

Mike Vannoy: There you go.

What the hell is an ICRA?

Chris Cooley: Yeah, no,

Heather James: That's your individual coverage HRA. So that is your employees that are actually out going and getting their own individual policies. And the employer is now going to provide a contribution towards that policy. So, you know, maybe you have four or five employees. They all have their own individual policy and you, as the employer, want to offer a contribution towards that similar to what you would do on an employer group plan, but you're not supplying the plan.

You're just help offsetting some of those costs for the employees, um, you know, tax free basis. So. It's, you know, we could go on and on about how those plans work, um, on a whole other podcast, but [00:19:00] they're a nice start. And then what a lot of employers are starting to educate themselves on until they get to an area where they can afford a group plan.

Mike Vannoy: You know, Mary talks all the time that, you know, if, if you do something that is a benefit for the employee, even if it's free, you might think this is no big deal, put it in the ad, you are competing, you're competing against the fortune 500 company down the street and the business that is the same industry as you are across the street.

You're all competing for the same, same labor pool. So I loved your idea, Chris. It's like, okay, maybe your partner with a background check vendor, the ROI is ridiculously high there, so it's, it's easy. Um, but if it bundles in, uh, uh, uh, free identity management, it's like. Put that in the ad, you know, work for us and we'll proactively monitor your identity, identity theft, free of charge that, Oh, that's great.

I don't think they might, they might cost them 19 a month for it to do it themselves, but it seems like a huge benefit when [00:20:00] my company provides that to me for free, right?

Chris Cooley: absolutely. We've had, I mean, our employees, we've gotten a really good response from it. So it's something that works. Well, today is many. I mean, you think about how many spam emails you get a day want you to click on the, on the, on the document it's so important. And then what happens is if they don't do it.

And they have identity theft. They're gonna, how many hours are they gonna spend outside of work, work trying to get their identity back? Again, it's just a small example, but it's something that makes a difference.

Heather James: ~sorry.~ No, I said, I've seen a lot of popularity with the gym reimbursements. That's become really popular with employees and something that's not overly expensive to kind of help out the employees, but I love the pet insurance. That's become popular too.

Mike Vannoy: Yeah, it has last thing I want to spend on here. So, uh, when I think about. All the changes of business goes through, you know, going from this 16 50, you're really leveling up. And I keep coming back to where you were going, [00:21:00] Mary, it's scaling, it's consistency, it's processes, it's an org chart, it's training.

It's not just training on the skills record to perform the job. It's skills of managing people because somewhere in here in this. Maybe, maybe at 15 employees, you already have a manager, but certainly to get to 25, you're not doing this by yourself. You have people at least shift supervisors, at least you get to 50.

Now you have bonafide managers. Um, what about performance? Matt, Mary, you mentioned it, but you know, when you're a 10 person company. There's not a lot of places to hide, right? The low performers stand out, uh, generally high performing employees don't like to work with low performing employees and they kind of do the performance management hard stuff for you.

Cause they make the sucky people uncomfortable and the sucky people leave on their own. Um, but, but as you grow. And you scale up, [00:22:00] you know, hate to say it, low performers can hide easier. Um, and you're going to have to have a grownup performance management process, uh, as, as you graduate to this level. So how, how should employers be thinking about performance management?

As they grow through this phase,

Mary Simmons: We, we usually look at it in, in two buckets, right? So one bucket is, you know, are we setting the expectations and when the expectations aren't met, uh, what's the, you know, cause and effect there, right? So setting expectations, we like to create job descriptions. So the employee knows what the responsibilities of their job summarized, of course, uh, are going to be.

That job description is obviously shared with their manager so that the manager now has, um, you know, a basis on what is the performance that's expected of this employee. And when they don't meet it, there needs to [00:23:00] be consequences. We even put that as a policy in the handbook. When expectations aren't met, you might go on a verbal.

Uh, 1st, warning a final warning and that may lead at any point to possible termination. We, we make it very clear in, in, in the employee handbook. So, guiding managers on how to write up. Uh, employees properly when to write them up, so it doesn't get you in more trouble. So it drives productivity. It doesn't squash it and it doesn't make us liable for any kind of litigation.

And then the 2nd bucket is, you know, what are we doing for evaluating and appraising that performance? Right? If we don't give feedback to our employees, if we don't tell Heather, what a great job she's doing, Heather might. Assume she's not doing a great job and start looking for a job. Conversely, Heather might just be unengaged and [00:24:00] think, well, I'm not appreciated here.

Um, and then, you know, the flip coin is the person who is just that middle level doing the minimum or a poor performer. If you don't give feedback in a formal performance evaluation, that person thinks they're doing a great job. And they're just going to continue to be at that Lower level or that mid level.

We need to give feedback on, you know, what's going great and and what might need some, some performance improvement

Mike Vannoy: okay. So for the kids at home following along, I'm going to flip to page nine Uh, I want to focus on we're going to shift from the hr priorities during this stage to the hr challenges Uh, chris, I think yours is kind of self evident, but let's go a little deeper on background checks What are some of the challenges some of the ways that small business owners?

And when they're in this stage of growth that they get themselves in [00:25:00] trouble

Chris Cooley: I think one of the biggest things that we see with, um, with, with clients of this range is understanding one, what background checks are, because they're very nuanced. A criminal background check is not a criminal background check. There's a lot of different ways to do those.

Mike Vannoy: You're going to have to explain that. Cause the words made it seem an awful lot, like a criminal background check.

Chris Cooley: a criminal background check is, um, you know, it depends. So do they need federal, do they need federal records? Do they need, um, just county level records? There, there's just a lot of different things that you can, that you can look at there. But one of the biggest things that we see as far as these clients that are, that are challenges are, um, pre and adverse actions. We see very, very few clients that, that do that. Um, and if you're familiar with that, basically what happens is if I run a background check and I make an adverse employment decision. I say your background check is not, is not good enough for [00:26:00] me and I'm not going to hire you. By law, you have to let that employee know that, um, I'm not going to hire you. But what you have to do too is give them the ability or the opportunity to contest what was on their report. Maybe it was an error or a mistake. Um, and then what happens is after all of, there's a timeline for all of these things, but then you eventually make the final decision. Adverse action if they don't go in and it is not proven erroneous. So there's a, there's a, there's a big open liability there that a lot of clients have that they're not doing. And I think that's one of the biggest challenges that we see from these groups in our world is not being compliant with the different Fair Credit Reporting Act laws, both federally and then also a lot of states and even municipalities have those now.

So it's important they have somebody that they're using somebody that can support them and somebody that can help them through those processes

Mike Vannoy: this is what scares the hell out of small [00:27:00] business owners. Cause you know, and I'm not trying to be cute. It's like, well, a criminal background check doesn't really mean a criminal background check because it's nuanced. Okay. Well, there's one, um, uh, adverse effect of a background check. Well, I, I hired this guy to do background check and he said that he.

Did this one thing in the past. So I decided not to hire him. Turned out it was a mistake. Now I'm getting sued. It's like, business owners are just scared to death to make a mistake that I think kind of eventually just say, screw it. I'm going to run this business on gut. I'm going to treat people as good as I can in, in hope for the best.

What, how do you, how do you advise business owners? Cause you don't get a choice to not follow the law, right? I mean. Yeah You're still going to follow the law, but you don't know all the laws.

Chris Cooley: Yeah, so that's what that's what that background check company is there for right? So if what we find too is we'll find folks that'll go out on google And they'll google on mary and [00:28:00] they'll say what's mary done

Heather James: Eww.

Chris Cooley: But there are but you can't use that information And so what I would say is it's important from a risk mitigation to run those background checks and drug tests. And if you have a viable, if you have a legitimate partner that's going to make sure that you have all of the necessary authorization forms. Um, the adverse action process, it's all built within their system. That client doesn't have to think about that, right? Because that partner is going to help them through it.

It's just like anything else. Um, if you have the right advisors, you're, you're okay.

Mike Vannoy: And Mary, this is where consistency that you were talking to is so important, right? It's like, if you're going to drug check, drug test, better drug test everybody. It's like. Um, all it takes is a gender, a color of skin, any reason why maybe, maybe one candidate came [00:29:00] in and they smelled like marijuana, but if they were from a protected class and they're the only person you drug tested, you're cooked.

Chris Cooley: Oh, absolutely.

Mike Vannoy: You, you,

Mary Simmons: 100%. And there's a lot of states. You can't. Test for cannabis and, you know, to, to Chris's point, you know, on the criminal side, there's a lot of states. There's probably about 20 states that have banned the box. You can't even ask on an application if they have a felony conviction. Um, so the compliance goes so deep, right?

The application is the first thing that that a candidate. Possible future employee sees and I'd say 90 percent of the ones that I look at from employers are non compliant

Mike Vannoy: and to be clear, the reason to be consistent, it's true that there's a COIA component that is, that protects you. I guess, uh, from, from. You [00:30:00] know, uh, a lawsuit, uh, a fine, and if you can show document that you have good, consistent policies and procedures that helps you, it's just also simply the right thing to do.

Right. And when you do the right thing, you talk about focusing on culture. If you treat everybody the same, you're sending a really clear signal to all the employees. There's no such thing as special treatment here. Everyone is treated fairly in the same. Even that, even if the transaction might have felt a little bit weird or awkward, we didn't feel so family business, family oriented when they, when they had me do this one thing or ask me the thing because everybody gets asked that.

It's a fantastic thing for culture. It's not just a way to not get sued. Right.

Mary Simmons: Agreed.

Mike Vannoy: Um, Heather, what other challenges do you see? the businesses face and we can, let's take, let's take Cobra. Um, sometimes it's just laws that they don't know what they don't know. And you're going from 16 to 50 [00:31:00] employees, you know, you're all of a sudden subject to comply with laws that you weren't when you came into this stage.

Heather James: Yeah. And it's so surprising to see how many don't know those laws. Uh, you know, they're just like, Hey, I'm offering insurance now. Like we're good. And you know, a lot of cases not realizing it's like, okay, well now we're offering insurance, you know, we're doing our thing, you know, people are signing up, but now we've had a termination and that person quit.

So. Sometimes employers come to me and they're like, well, he quit. So, you know, we don't have to offer him any kind of extension on this plan. Um, which unfortunately is not true. So, you know, one of the things that we try to do, you know, with our clients is just help educate them, like, did you know, we do a lot of did you knows because, you know, we find that a lot of people don't have time to read or understand, you know, what some of these things are, but, you know, just having a general idea of, okay, so I'm offering insurance, I have over 20 employees.[00:32:00]

You know, what are my requirements as a new hire? You know, it, it doesn't just stop it when they terminate it. It's when they're a new hire too. Like what are the rights that they need to be aware of? Should they sign up for insurance? You know, two years later they leave the company, you know, they should know ahead of time that they're going to be offered a COBRA extension.

So, you know, one of the things that we try to do is educate them that, you know, who are your qualifying events, you know, is it just a termination? Is it someone that was laid off or rift or it, you know, we go so far to explain that this doesn't just apply to your employees. This applies to their dependence.

So, you know, you might have an employee and this is the biggest one that gets missed is there's a divorce. You know, you've got insurance on this employee. He's they're divorced. And now what, you know, educating the employers that the dependent needs to be offered COBRA. And they're like, well, he [00:33:00] didn't work for me, you know, but understanding that the dependents have just as many rights as the employee.

Once they enter that plan, um, you know, that's a big thing too. And. It's hard because you already have so many other things to stay on top of. Like Mary said, with handbooks and Chris said, background checks. And then now you have to, you know, add this on to, um, you know, it, it, it's a lot, it's a lot for employers to digest.

Mike Vannoy: Mary, you and I talk about this all the time. I mean, I'm, I'm so empathetic to small business owners. Um, I am one been involved in small businesses my whole life. Um, you just don't know what you don't know when these laws change so much. Um, maybe people have heard of COBRA in, in, in Heather's example, but you know, if the, the law says, if in the paraphrase, and correct me if I got it wrong, Heather, but, uh, if you offer benefits to your employees that, uh, and you, and you are over 20 employees and, uh, somebody terminates, you have to offer [00:34:00] continuous continuing coverage.

That's the essence of COBRA.

Uh, if you're 15 employees and you offer insurance, you don't have to. If you're over 20 employees, but you don't have insurance, it doesn't apply to you because you don't have insurance So there's this unique thing if you have insurance over 20 employees That's a simple one compared to the stuff that's being passed by uh local municipalities On paid leave types unpaid leave types, uh overtime this minimum wage that um Mary, other than the obvious, we'd love to, you know, for you and your team to help anybody listen on the show.

How does small business owners keep up with all this?

Mary Simmons: I, I really don't know because you, you know, a lot of times they'll say you use the example of Google. I just Google it. You don't know what to Google. If you don't know these laws exist. And, and I would say about Cobra, and I'm, I'm sure Heather was about to jump in, but if you're below [00:35:00] 20 employees, there's it's, Plenty of states that mandate mini Cobra and that mini Cobra means for the mini employers less than 20 employees.

So it becomes so complex. Um, that, you know, I'm, I'm actually so, so proud that we do these. Podcasts, and we're helping small businesses because it is overwhelming. Um, you know, I can get on a call with an employer who doesn't even know that they have to give I 9s. So, every single employer has to give an I 9 to their employees.

And I still am on a call or talk to an employer at least once a week who does not know. What an I 9 is, and that will put you out of business,

Heather James: Yeah.

Mary Simmons: get audited.

Mike Vannoy: in the ebook, we talk EEOC in this category. What, what, what do, [00:36:00] what do business owners need to understand about EEOC? What is it? Why does it apply to them now where it might not otherwise?

Mary Simmons: Yeah, so 1 of the biggest pieces of legislation, um, at least on the HR side is title 7 and to govern title 7, uh, the equal employment opportunity commission was created. So they oversee. Um, every piece of title seven and there's been quite a few amendments to title seven. So title seven, uh, in the easiest terminology is, uh, mandates, uh, that businesses do not discriminate, uh, based on protected classes, um, any of the employees that's.

A very big, you know, uh, you know, summarization of the law now under title seven, there's quite a few, uh, pieces to it that the government [00:37:00] has chosen. And this is on the federal level, right? So the states are just piled on top of it as well as municipalities, but the Americans with Disabilities Act, it's probably your biggest piece of legislation there.

Um, you know, so again, not discriminating based on somebody's disability. Again, we could go, you know, I could go on and on and on. Well, one piece about ADA that a lot of people don't understand is it's also, you can't discriminate against their religious rights. And it's also, uh, covers perceived.

Disability. So if Chris broke his leg and he's walking around limping because the cast came off and I perceive that that's a disability and discriminate against him, he would be covered by ADA. Lots and lots of pieces there. Um, some other. You know, piece pieces that are pulled out of Title 7 is Pregnancy Discrimination Act.

So that [00:38:00] was, um, relatively new. Pregnancy was always covered under sex as a protected class, but now the federal government made it a bigger piece of legislation with a ton of regulations for employers to adhere to ton, um, of, of different

Mike Vannoy: You and I, you and I did an episode on that exact topic, topic, encourage folks, uh, go back in the archives and search. Uh, it's, it's really. It's very, it's so much more specific about pregnancy, not just, uh, uh, not just sex, but it puts a, it really raises the bar on the burden on the employer, uh, for what kind of accommodations they need to give.

Right.

Mary Simmons: Agreed.

Mike Vannoy: Yeah.

Let's, let's still stay going down the list. So we've got ADA, we've got Pregnancy Discrimination Act. What are some of the others we talk about in the ebook? to [00:39:00] understand in this.

Mary Simmons: is another act. So that's genetic information. It sounds a little bit confusing, but, you know, I would give an example and sort of coming, coming off what Chris was saying. Google searching people's information. I've had employers say, well, I'm not going to hire him because I went on Facebook and all over Facebook.

He has posted that. You know, heart disease runs in his family and he has heart disease, so I'm not going to hire them. Well, that's genetic information. So, you know, part of that is again, not discriminating against individuals based on their, the genetic information.

Mike Vannoy: so

Mary Simmons: Obviously, you can't ask for

Mike Vannoy: that. that. This is, this is not the employer and doing labs on a cheek swab. This is having access to information about their genetic background. Right.

Mary Simmons: Correct.

Mike Vannoy: Yeah. Chris, anything

you want to pile in here with, uh, on Gina? Cause this, this seems [00:40:00] background check ish related, maybe not a formal background check, but a place where employers get in trouble, which is.

Inappropriately say using social media content.

Chris Cooley: yeah. Now, anything from a background check perspective, um, you, one of the, you know, a new thing right now is a lot of people are running social media checks. And so they're going and they're specifically looking for violent posts, racial posts. Those kind of things. So there are, um, that that's a new, a new trend right now. Um, and there are companies that will go out

and

scan all of an individual social media.

Mike Vannoy: right, Mary. So we got ADA, we got Gina, you got pregnancy discrimination act. What else

Mary Simmons: American. Age discrimination in employment act. I think that's pretty self evident, but at some point, um, even though age was covered under, um, title seven, what they did [00:41:00] was they added an age and I know, you know, that age, um, but we'll tell our listeners.

It's 40. you calling me? Oh, you call me old. I might be. Um, and it doesn't mean that below the age of 40, you can't be discriminated against, but over the age of 40, you gain extra protections, like a severance agreement has to have a separate piece to it, uh, etc.

Um, so I, I think those are, are your big ones now. You keep saying 50 employees. If we're only at 49, 16 to 49, FMLA does not come into effect, but north of 49, once you hit 50, you're going to be eligible for a family medical leave act.

Mike Vannoy: family medical leave, uh, affordable care act. We'll, we'll, we'll cover a bunch of those in the next episode. I think the trend that I think for me. [00:42:00] If you, and if you're at the, if you're following along in the ebook, it's the bottom of the page, it's title seven, where Mary started out, you know, prohibits employers from discriminating in the workplace based on race, color, religion, sex, or national origin, that what we're seeing, not only at the federal level, so at the federal, uh, pregnancy discrimination need to be covered under, under, uh, sex, um, age was, you can't discriminate, uh, genetic information.

What we see is, Um, The categories of race, color, religion, sex, national origin, just getting more and more and more explicit. And it's not just getting more explicit in the, in the definition of those categories, but almost always like in the, in the case with a PDA pregnancy discrimination act, it's adding new responsibilities and those new responsibilities are always on the employer.

The burden, it continues. I don't see this changing. I think we're going to see change where there's going to be more and [00:43:00] more laws that continue to be passed that increase the burden on the employer. So, I'll say maybe the last thing for me in this category would be. get used to it when you get to this stage of your growth.

I mean, when, when you're one to 15 employees, we've talked about last week, you might be a really awesome, uh, carpenter and you, you do kitchen bathroom modeling like nobody else in business. You got a couple assistants that have helped you scale into this and into a business. Uh, you're a landscaper, but your, your, your landscapes, your hardscapes, your soft scapes are just absolutely gorgeous.

You're the professional services firm, you're, you're the domain expert as you grow your business, buckle up because not only do you have to have processes that are repeatable to scale, you need the infrastructure and I'll say the intestinal fortitude [00:44:00] that you're going to have to deal with all kinds of legislative requirements that you never did before.

Um, Mary, anything else you would add on the compliance side?

Mary Simmons: Oh, how much time do we have? Um, You know, we're, we're really sticking to federal law here. Um, I do want to reiterate about I nine, lots of changes may be coming. Um, and the piece about I nine for employers not to forget is the E verify, um, stipulation in many states. And for whatever reason, it tends to be.

In the less compliant states. So I do feel New York employers, California employers are uber sensitive to H. R. laws. They know because everybody's talking about how much compliance there is, but but in, you know, some of the other states that don't have as much state compliance. Don't forget about [00:45:00] the federal compliance.

I nine being a big piece of it. South Carolina, North Carolina, Florida. E Verify, right? Uh, different, um, thresholds and, and a little bit different nuances there, um, but the state, we're sticking to federal compliance here, but there are so, there's so much state and municipal compliance, uh, it gets, it gets really confusing.

Mike Vannoy: Yeah, we're going to, so we jumped ahead to, to go through all the title seven stuff and the, and the new laws, that's good. I want to come back and maybe we'll end on what, uh, uh, the, the one section that we skipped over what HR tools should be in place. Um, and I, and I'd recap where we were last week. You know, the first thing is just getting culture, right?

You need people that align to your mission, your vision, your values that are going to help you grow your business. Uh, and the first thing from a system standpoint. Is payroll. You gotta, you gotta pay people accurately and on [00:46:00] time, right? I mean, they're not, people aren't gonna do it for free. Um, you don't even have to be the highest paid provider in, you know, maybe people just dig you, maybe they dig what you do for customers.

Uh, and they're all about it and they want to be part of the mission. Um, But no one's going to tolerate getting paid incorrectly. And they're sure as hell not going to tolerate getting calls from the IRS because you didn't file their taxes properly. So there's this very, very, very baseline, uh, from, uh, what HR tools, what systems you need, it's payroll system, payroll and tax filing.

So now you're, you're, you're growing your business, you know, Chris, we'll start with the obvious where you come from. What are the tools and I'll say services. Uh, this isn't intended to be a sales pitch for everybody is on this call. So speak, speak genetic generically about category, but. You know, why do businesses need to be putting in place background screening and whatever other systems or tools you think are [00:47:00] appropriate at this stage in the game?

Chris Cooley: Yeah. So from a background check perspective, um, it goes back to process, right. Uh, and we've talked about processes a lot. So, uh, from a background systems, it's HRIS systems where you can onboard, you're onboarding the same way every time. Um, you can have your background checks that are built within that system, which is very important that way.

It's happening every time. Um, I know we've got, you know, we've got, uh, some from some rather large clients that don't use HRS systems. For some reason, they have, they have 3000 clients. Um, so what happens? Things get missed. I nines aren't done. He verifies not done. Background checks aren't roaring. Things like that.

So a lot of it is just building that process, um, making sure that everybody is getting background checked, making sure that it's the same process every time, the same check every time, or at least by class. Um, as well as by, uh, drug tests, uh, or if they're doing drug tests as well, [00:48:00] How about, how about systems of record and storage? Uh, cause so I'm going to get a background check done. Oh, certainly recommend as the best practice. And now I get this information. Do I have to store this in an HR system? Can it be a Google doc? Does it get printed and stuck in a file cabinet? How, how should I be thinking about the really super practical tools like data retention and storage?

Yeah, so things like that. If you're an hrs system, typically it's just going to go into that employee's file Um, so it wouldn't be anything different than that. If you don't have an hris system Typically whoever's running your background check for you. They'll have a platform in which it'll in which you can store it Um, and typically they'll have a retention policy Right.

So you can have that to where those stay for whatever that period of time that that employer would like. Um, so typically that's kind of how that works.

Mike Vannoy: Okay, great. Heather, how about you? What, what tools? So [00:49:00] certainly you think you see the world through an HR, excuse me, a benefit administration lens. Uh, I want your thoughts there, but just in general. from 16 up to 50 employees. What are the, what are the HR tools that business owners need to be thinking about

Heather James: Well, I mean, for me, a lot of these groups may not even have an HR department, you know, sometimes the same person that you talk to is the same person that gets the mail, they're doing the accounting, they're doing payroll. Um, you know, so one of the recommendations that, you know, I personally, you know, talk to a lot of our, especially our smaller groups about is, you know, Getting, getting HR, getting an HR person, using an HR service, something to help keep them educated and making sure they're doing the right thing.

Um, but you know, one of the things I usually err on the side of caution is making sure from an insurance perspective, especially if they're in a position to start [00:50:00] searching for that. Um, is, you know, lining up with a broker, you know, brokers are very educational when it comes to helping them shop for their insurance plans, helping them understand, you know, what that's going to look like as they start to build that out, as they start to grow from, you know, that 15 and up 16 and up.

Um, but you know, those are my two recommendations is, you know, get yourself some education, you know, especially from an HR perspective and, and from an insurance perspective.

Mike Vannoy: Mary? How about you? What tools? So you guys come in, your team comes in and you're the HR department in many cases for folks. Uh, you, you, you need them, them to have good tools, uh, for you to be more efficient. What are those, what are the tools that you recommend?

Mary Simmons: Yeah, and thanks, Heather, for queuing me up perfectly there. Um, so, yeah, I think that when we start working with employers, one of the first things we do is an HR audit, [00:51:00] uh, and that informs us on sort of the temperature of their HR function. Is it. Good, poor, excellent. In any case, we can assist them from that point to go forward, um, and from there, one of the first things that we always do is look at, revise, or create that employee handbook that we talked about.

And then we try to assist them with some technology, as you're saying, and we make sure that they are set up to get it. Uh, H. R. Compliance updates on a consistent basis. Um, so that they know what that what is coming down the pike. You said earlier, how do they know what the new laws are? We're proactively pushing them out to them.

But then we take care of it for their organization, right? It may be an employee, a handbook update. It may [00:52:00] not, you know, which employees does it go to? How can they edit that possible that policy? For their organization, industry, et cetera, if at all, um, and then how do they push it out to their employees?

So, so those are, you know, I think the beginning of it, you know, and then we talked about job descriptions. Very important. I agree with Chris on the, a very important piece to the HR side of things, because that's how we're electronically, uh, onboarding, storing information and off boarding that employee

Mike Vannoy: You know what, I mean, what, what, as I'm listening to all three of you, uh, when it comes to tools, I come back to where you were at the top of the conversation, Mary, it's how do you make things consistent and repeatable? Right? I mean, You're gonna have an hr, HR software, so HR software sitting on top of a, a payroll software, uh, then a benefits software and performance management [00:53:00] software and how you're gonna store background checks and that stuff.

It first requires you to define a process, right? Because, you know, doesn't do any good just to have, have the tools if you use them. Random minute ad hoc. This is all about, I think all, all the things we're talking about here is how do you scale? Right. I think one to 15 employees focused last week. It's you're establishing a new business.

You're, you're, you're establishing, uh, customers. You're delighting your customers. You're getting your first group of employees. You're, you're paying them accurately and on time. And now how are you going to scale? You're going to scale with process. You're going to scale with technology and continue to delight customers.

And along with that comes all kinds of new challenges. Compliance challenges, a lot of Title VII stuff that we unpacked. Uh, uh, uh, new laws that you must comply with spoiler alert. Uh, next week, we're talking 50 to 150 employees in the title of that chapter. Uh, get serious about compliance because today wasn't nothing because when you get to [00:54:00] employees, all of a sudden the world of compliance starts getting real serious and you're going to have to be thinking about staff that helps you or in house or outsourced augmented staff that really are Sherm certified HR experts to keep you compliant, uh, through that next phase.

So, uh, I think with that, I think we'll, we'll call it a show. I thought it was a great show guys. Um, uh, to me, this is this, this phase going from 16 to 50. This is about implementing the processes and the tools to help you scale to the next level. Uh, and with that, uh, Chris, Heather, Mary, thanks for joining me

Chris Cooley: Thank you.

Mary Simmons: Thanks, Mike.

Heather James: Thanks.

Mike Vannoy: and everyone else for joining today.

Thank you for letting us be part of your mission to grow. [00:55:00]