Recently, I completed an HR audit for a new client—an established business with great people and a strong reputation. But like many busy business owners, they hadn’t had a chance to take a close look at their employment practices in a while.
As I went through my checklist, a familiar pattern emerged. I uncovered several key issues that I see over and over again—and unfortunately, they’re among the most common (and costly) mistakes employers make.
Here’s what I found—and what you should be checking in your own business:
- An Outdated Employee Handbook
Their handbook hadn’t been updated in years. It still referenced laws that no longer apply and was missing recent required policies—especially around remote work, sick leave, and harassment reporting. A current, legally compliant handbook isn’t just a formality—it’s your first line of defense.
- Independent Contractor Misclassifications
They had a few team members classified as independent contractors, but based on the work they were doing, those individuals should have been treated as employees. Misclassifying workers can open you up to serious fines, back pay claims, and tax liabilities.
- Wage and Hour Violations
Some of their employees were working off the clock or weren’t being paid for all their travel time between client sites. Wage and hour laws can be tricky, especially when it comes to overtime, split shifts, and travel time. Even unintentional violations can add up quickly.
- Lack of Documentation for Discipline or Termination
The business had let go of a few employees but hadn’t documented the performance issues or the disciplinary steps they took along the way. If a wrongful termination claim ever came up, they’d be in a tough spot. Documentation isn’t about being punitive—it’s about protecting your business.
- No Clear Harassment Reporting Process
Although they had a policy about harassment, employees didn’t know where to turn if something happened. There was no formal reporting process in place, and no one had been trained on how to handle complaints. That’s a lawsuit waiting to happen.
These aren’t rare mistakes—they’re the exact issues I find most often when I audit businesses. The good news? Every single one of these problems can be fixed.
If you’re not sure where you stand, let’s talk. A quick HR check-up could save you from costly headaches down the road.
At People First, everything begins and ends with people—and that includes protecting your team and your business.
