An increasing number of small business owners in California are facing employee lawsuits. These settlements are usually very costly and can potentially bankrupt these entrepreneurs. In most cases, these problems with employees can be avoided if the company hires functional human resources personnel. But many employers do not have enough resources to hire an HR person. Incorporation Attorney offers businesspeople a more cost-effective alternative, the HR on-demand service.

Why Do Businesses in California Need an HR Department?

The problems that micro & small businesses in California commonly encounter fall into these three buckets. Employee-related internal issues are one of them these buckets.

Here at Incorporation Attorney, we’ve had hundreds and hundreds of clients who are micro and small businesses. In our experiences with these companies, we have repeatedly observed that one of the most common problems that they fall into is internal issues that involve their employees.

A wise business owner knows the importance of hiring a full-time HR person or an HR department. Human resources personnel is responsible for handling problems with employees, and they also set up processes that will help the company avoid these problems.

Employee-related problems need to be taken very seriously because if a disgruntled staff reports his or her concerns to the State’s Labor Department, the business could potentially lose thousands and thousands of dollars. Some companies become bankrupt just because of these costly settlements with angry employees.

Why Don’t Many Small Businesses Have HR Personnel?

Human resources specialists are people who have gone through the necessary training and certification to provide quality HR services to companies. These people usually cost three to five thousand dollars a month. Many businesses in California, like solopreneurs and family-owned enterprises, do not have adequate resources to hire a full-time HR staff.

If an employee has complaints against the business and sues them through the Labor Department, the absence of HR personnel usually makes these companies unable to defend themselves properly. Because of this, these micro and small businesses are the ones that are immensely affected by expensive employee-related lawsuits.

Hiring a full-time HR person is costly. This is why a lot of small businesses do not have an HR department.

Real Case of Rogue Employee Lawsuit in California

We recently had a client who needed our help with a rogue employee. The client is an accountant who owns an accounting firm based in California. One of his employees went to the Labor Department and filed a claim. This staff member complained that the owner was overworking him. He claimed that he wasn’t allowed to take mealtime breaks and was forced to work more than eight hours a day.

The Labor Commissioner requested the accountant to present these records. He was not able to produce them because his company did not have a proper record-keeping process set up.

The State of California is very aggressive when it comes to employee-related complaints. After the employee filed a claim, the Labor Department sent the client a letter informing him of a lawsuit and that he needed to attend the hearing to explain himself. Consequently, our team from Incorporation Attorney went with the client to the hearing.

The Labor Commissioner requested that the accountant present payroll records that show the break times that had been given to the employee. Our client also had to bring records that prove that the company had paid the staff member for overtime work. Additionally, the Commissioner also asked the client to present their Employee Handbook. Unfortunately, the client did not have any of the documents that were requested.

The accountant recorded his employees’ payroll by hand. Handwritten record-keeping is a very crude and unreliable method of documentation. The company kept records internally, instead of hiring an offsite service. And then, to make matters worse, they lost the hand-written documents. We suspected that the rogue employee could have stolen the records.

Andy Gale is a trusted business lawyer based in California.

There were other employees who witnessed against the complaining staff member. They also testified that everyone was allowed break periods and were paid overtime fees. But their testimony was not enough to win the entire case. In the end, the employer had to spend 10,000 dollars to settle the lawsuit.

If the accountant had hired HR personnel, a lot of these problems could have been avoided. With a competent HR staff, a comprehensive Employee Handbook could have been in place. This document is important because it contains the agreements between the employer and the employee. It covers all the guidelines that are expected from the employee and the employer in the workplace.

Moreover, if the client hired an HR person, a proper record-keeping process could have been set up. Accurate documentation is important to prove that the company paid its employees overtime fees and that necessary break periods were given.

The client is fortunate that only one employee filed a claim because if there were more than one disgruntled staff, the company could have gone bankrupt.

HR on Demand Service – A Cost-Effective Alternative to Hiring a Full-Time HR Personnel in California

The HR on Demand Service by Incorporation Attorney is a very cost-effective alternative to hiring a full-time HR staff.

Businesses both big and small encounter employee-related internal problems, but these issues are usually more challenging for small businesses. Larger companies solve these predicaments easier because most of them have HR staff who handle these concerns full-time. Smaller businesses and startup enterprises have a more difficult time dealing with these problems because a lot of them cannot afford to hire an HR person.

Incorporation Attorney has provided small businesses with a solution. Our HR on Demand Service is available to companies who want to consult a certified HR specialist without having to hire one to work full-time. With this service, business owners can simply call an HR person on an as-needed basis only. This offer is also a very affordable alternative because it costs 90% lesser than hiring an HR staff to work full-time.

For only 300 to 400 dollars a month, you can get access to HR expertise as needed. Our HR consultation on-call expert can guide you in constructing a proper Employee Handbook that specifically applies to your industry. Our competent HR experts can also help your business avoid many unnecessary employee-related problems.

For more information about this service, contact us at +1 (714) 634-4838. Call now!