Small Business Essentials: Human Resources and the Legal Questions Founders Miss

Hiring, Keeping and Documenting Your People

NFIB's Small Business Rundown, hosted by Adam Temple, has devoted several episodes to the employer side of running a business. On hiring in a tight labor market, the advice is unglamorous and works: stay active on job boards and social media, and build internal incentive programs that give your current people a reason to refer candidates.

On retention, the podcast makes a point small employers tend to undersell. You cannot match a large company on salary, but you have far more room to move on paid time off, scheduling and advancement. At a five-person company, one person's input visibly changes how the business runs. That is worth something to the right hire, and it costs you nothing to offer.

The handbook episode is the one most student founders should act on. NFIB's guidance is that a small business handbook needs the company's history, an employment statement, a non-discrimination and no-harassment policy, and telework and social media guidelines. Review it once a year. The annual update is what keeps your practices consistent and limits your liability if someone challenges a decision later.

The Legal Questions Owners Ask Over and Over

NFIB's Ask the Lawyer webinars hand the hour to a practicing attorney and let members bring their own situations. Recent sessions with business attorney Timothy Coons of Counxel Legal Firm have circled the same three problems.

The first is worker classification. Calling someone an independent contractor does not make them one. The test looks at how much control you have over their schedule, their methods and their tools, and getting it wrong exposes you to back taxes and penalties. For founders who pay classmates a flat fee to design, code or staff an event, this is the single most likely place to slip.

The second is protecting what the business owns. Non-solicitation and non-disclosure agreements are what stop a departing collaborator from taking your customer list or your formulation to a competitor. These are cheap to put in place at the start of a working relationship and nearly impossible to add once it sours.

The third is negative online reviews, and the answer is narrower than most owners want. There are legal ways to respond and legal limits on what you can demand be taken down. Attorneys spend time on this because the instinct to fight back is where small businesses create liability for themselves.

	Write the handbook before you need it. Three pages covering conduct, pay periods, time off and social media beats nothing at all. Put a calendar reminder to review it every year.
	Check how you have classified everyone you pay. Run each person against your state's contractor test. Misclassification is corrected far more cheaply now than after an audit.

	Get agreements signed early. Non-disclosure and non-solicitation terms belong at the start of a working relationship, not after someone leaves with your customer list.
	Use the free legal help you already have. The NFIB Small Business Legal Center runs a Supportline and a legal guide series. Bring a question to an Ask the Lawyer session before you pay for an hour of counsel.