Posted on August 20th, 2019
Below is a complete transcript of this video.
What’s going on fellow entrepreneurs? Today I want to talk about something more of generality versus specific law.
I get a lot of questions about how do I hire employees?
That’s really something that anybody could google. It’s not really a legal question, but it does have legal ramifications. I’ve gotten that question enough where I think it’s probably a good topic just to discuss briefly.
So, you’re a successful entrepreneur. Your business is doing well, and now it’s time to hire employees.
What’s the first step? The first step is, of course, the interview process, right? In my opinion, it is much better to take your time and hire a very good employee than it is to try to fire a bad employee later.
A mistake that a lot of entrepreneurs make is that they need someone, they need somebody now. They put out their ad, or they ask around or whatever it is that they do.
Then, they hire someone that doesn’t fit?
It’s not always difficult to fire somebody. But, it always is a risk in California. Even if you have the very worst employee.
Even if it’s within the 90 days, you potentially could still spend a lot of money trying to defend yourself, and it just isn’t worth it. I have tons of horror stories about that, but that’s for another video.
Now you find the right candidate. You do the interview. You like them. Be careful of the ban the box law.
That’s very important, which doesn’t allow you to ask about past criminal convictions or anything else prior to hiring them. But again, I’ve done videos on that, so I won’t get into that.
Now that you’ve hired someone, the first thing you should do is go to a payroll company.
I know a lot of entrepreneurs say, “Well, it’s the first employee. I’m going to save money by treating them as independent contractors.” But trust me, there is almost nothing in California that’s an independent contractor these days.
It is a big source of litigation for entrepreneurs and just absolutely not worth doing unless they are clearly independent contractors.
For example, even people that do builds and flips. I have a lot of clients that are real estate guys, and they go down to Home Depot and they grab some guy that has his own crew.
He says, “Yeah, I can do these floors.” That’s an employee, believe it or not, because in California, if they don’t have a contractor’s license, they are not independent contractors, they’re employees. So, make sure you go through a payroll company so that’s all legit.
Make sure you have worker’s comp. That’s a huge source of liability for entrepreneurs.
I have stories like that too. A guy gets hired one day and suddenly he fell off the ladder mysteriously. You definitely don’t want to be without workers comp.
The next thing is, there’s all kinds of things like handbooks and things like that. Sure. Those are important, but the law doesn’t absolutely require them.
The law does require that you have sexual harassment training and different things like that. And a handbook, my preference is policies and procedures, are certainly better than not.
But you certainly want to have something if you can because it will help prove that you have policies that are compliant with law if anything goes wrong.
But typically, with one employee, people don’t do that. Understood.
Second, have a method of tracking everything, the hours that are worked, the first 10-minute break, the lunch break, the second 10-minute break, when they clock out, if they worked overtime, anything like that.
Have a method for tracking all of that.
Finally, have a method for tracking problems. Even if it’s just emailing something to another person, another supervisor or whatever saying, “Hey, this person was late today,” or whatever else.
With one or two employees, that’s really the basics to it.
Then as you start growing, then you’ll of course need more policies and more procedures to make sure that you’re complying with California law.
I think that’s it for this video. Until next time, entrepreneurs, go out there and be productive.
Thanks.
