Remember when you were a kid, and you had nightmares about what monster was hiding under your bed or in your closet? Well, now as business owners the nightmares aren’t so far-fetched and include a lot more paperwork. We’re no stranger to working with business owners to overcome the hurdles that get in the way of running their business, in fact, it’s why we exist. We’ve outlined the Top 5 HR Nightmares for Business Owners and steps you can take to erase some of those fears.
- The Missing or Outdated Employee Manual
An employee manual is more than a document that gets tossed on a desk during onboarding. It’s not uncommon for businesses to operate with outdated or nonexistent manuals, but that has its consequences. An incomplete or incorrect employee manual can lead to misunderstandings, inconsistency in management, and even legal trouble.
Solution: Regularly review and update your employee manual. A well-crafted handbook provides a reference point for your team, covering policies on everything from Paid Time Off to workplace conduct. Partnering with an HR expert, like Lever1, ensures compliance with current labor laws and reflects your evolving company culture.
- Vague or Nonexistent Job Descriptions
Job descriptions may seem simple, but their impact has a lasting effect. Unclear or outdated job descriptions lead to confusion, mismatched expectations and ultimately, underperformance. But it’s not just the employee that suffers when a job description is inaccurate, the business faces trouble too. For employers and employees, a job description sets the basis for employment and an inaccurate one can lead your business into uncompliant territory.
Solution: Create detailed, role-specific job descriptions that clearly define expectations, responsibilities, and required qualifications. Regularly reviewing and updating these descriptions helps avoid role ambiguity and ensures everyone is aligned. Job descriptions also make the process of classifying your employees much simpler.
- Exempt vs. Non-Exempt Classification Confusion
With changes coming to the salary threshold in 2025, it’s the perfect time to review your workforce classifications. Misclassifying employees as exempt when they should be non-exempt poses a huge threat for businesses without them even realizing it. The line between these classifications isn’t always clear, but getting it wrong leads to unpaid overtime claims, fines, and a damaged reputation.
Solution: Be diligent in classifying your employees based on the Fair Labor Standards Act (FLSA). If you’re unsure, consult Lever1’s HR professionals to audit your workforce. They can guide you on overtime rules, salary thresholds, and exemptions to avoid wage and hour lawsuits.
- Discipline Gone Wrong
Failing to follow a clear process when it comes to disciplinary actions can turn a manageable situation into a legal nightmare. Without documentation or consistency, disciplinary actions may be viewed as discriminatory or retaliatory, exposing your business to lawsuits.
Imagine this: an inconsistent approach to discipline is like a loose thread that could unravel your whole case. Lever1’s structured system acts as your investigative team, uncovering and solving performance issues before they escalate into major problems. This proactive approach not only safeguards your business but also ensures a fair and positive workplace, preventing legal troubles and reducing turnover costs that can soar to 30% of an employee’s first-year earnings.
- Termination Without Clear Process
Terminating an employee is always a sensitive process, and if handled poorly, it can lead to wrongful termination lawsuits or claims of discrimination. Without following proper procedures, even justified terminations can backfire.
Solution: Develop a clear, compliant termination process that includes documented performance issues or policy violations. Lever1 offers support from policy review to legal backing, reducing your risk of unsubstantiated claims.
Navigating Human Resource challenges can feel overwhelming, but addressing these top 5 concerns—employee manuals, job descriptions, classification, discipline, and termination—puts your business on the path to smoother operations and compliance. By taking proactive steps and partnering with experts like Lever1, you can avoid costly pitfalls and create a strong foundation for your team. With Lever1’s expertise, you’ll be ready to handle anything that goes bump in the night… or in the office.
Shannon Carpenter | Vice President of Human Resources and Client Services
Shannon brings over 20 years of experience in all areas of HR including HR Strategy, Recruitment and Employee Management. She has experience serving as a resource and advisor to clients on all areas of HR, including performance management, onboarding, terminations, handbook creation and updates, training, investigations, complaints and company P&P.