The 5 Most Common New Employee On Boarding Mistakes
We’ve all been there…
You just made a world class hire. The kind that gets the whole team excited. Now it’s time to cement the hire and make a great first impression. And I’m not just talking about the cool work space and unlimited snacks in the kitchen.
You want your new first round draft choice to make it through day one with the same enthusiasm they showed in the interview. This means smooth sailing through the on boarding process.
Of course, what it really means is deftly maneuvering the small mountain of new hire and benefits paperwork that faces every new employee. This comes in the form of legal requirements, including federal and state forms, handbooks, company policies, and job descriptions.
How you handle these forms are as important as completing them. And this is where it often goes awry.
Many employers overlook critical steps when it comes to compliance and completion of the right paperwork. And let me be clear, this is not an area to take short cuts in. Just ask Hartmann Studios Inc., of Atlanta, who overlooked its I-9’s and it cost them $602,250 in 2015.
So, you’ve got a lot riding on the new paperwork. Screw it up and you have an employee morale issue. Ignore it, and you face a big fat liability and potential fine.
So, where does it all go wrong? Why do so many companies make errors? More importantly, where are the pot holes?
I’ve covered it below in the 5 most common new employee on boarding mistakes. Avoid these at your own peril…
Mistake #1: Forms are outdated and incorrectly completed
Each year forms are updated. Making sure you use the correct version is key to compliance. November 2016 marked the release of the new I-9. Better update yours now to avoid compliance issues. And don’t forget if the form isn’t completed correctly, you are leaving yourself open to potential civil fines.
To ensure accuracy, ICE (U.S. Immigration and Customs Enforcement) published a 70-page I-9 booklet to help you and your employee complete the form correctly.
Don’t like to read? They have also made three 4-5 minute videos on the topic. Seems like overkill…but beware, fines for incomplete forms range from $110 – $1600 per form. Besides civil fines employers who violate the law may also be subject to:
- Criminal penalties (when there is a pattern or practice of violations)
- Debarment from government contracts
- A court order requiring the payment of back pay to the individual discriminated against
- A court order requiring the employer to hire the individual discriminated against
Unless you like wearing orange, 3 squares a day and living in a gated community, better take them seriously.
Mistake #2: Missing out on Tax Credits 9 (aka you are leaving money on the table)
Did you know that the government has a bucket full of tax credits ready to hand out for the right new employee? Of course, you need to submit the right paperwork to cash in, but they’re available. Up to $9,600 per hire to be exact.
That’s right, tax credits can be taken on both a Federal (WOTC), State, & Local (SALT) basis. So how do you take advantage? Couple options:
- you can try tackling this process in-house
- you can ask your CPA
- you can outsource it
Admittedly, the paperwork is tedious and it requires some attention to the details. So whatever route you choose, just make sure you get it right.
Of course I recommend that that you outsource it. I mean, a little cash out produces a good yield back. Whether it’s your CPA or a third party, just make sure they are knowledgeable and have advocates ready to work on your behalf. You don’t want to hire someone and then still have to do the work.
If done correctly, the tax credits will cover the cost of the service and you will kill two birds with one stone: new employee on boarding compliance and decreasing your corporate taxes.
Mistake #3: You do not have accurate account of handbooks and job descriptions
The handbook. It’s not just a glossy mission statement for your company. Compliance never stops. Make sure you have your company and your employees protected with an updated and current handbook, job descriptions and industry specific policies.
The handbook is the first thing a lawyer or the DOL will ask for in a claims dispute. If you can provide this and proof that the employee signed it, life just got a lot better. Remember, handbooks are only good if you have acknowledgement that the employee “received” it. That’s actually mistake 3.5. And once you have receipt, make sure it is in their personnel files.
Job descriptions should set expectations of job duties and responsibilities. All employees should have one to refer to. It will also be an instrumental tool to determine new overtime situations. If the employee is working overtime but is doing things not in the job description, then you need to analyze the situation. Maybe you need to change the job description and their duties to encompass all work flow. Or, maybe you need to hire someone else to help with the additional work. Either way, it’s a good starting point and a crucial one if in a lawsuit.
Mistake #4: Securing employee files
Employee files are not something you want lying around. In addition to social security numbers, you also have HIPAA issues. Personnel information should be kept separate from the medical files and the employer should take appropriate steps to protect the privacy and security of the information being maintained by the organization. Additionally, I-9’s should be separated from the personnel files so in the event of an audit, you can access all I-9’s quickly. If you have a lot of employees or high turnover, this could quickly turn into a storage and maintenance problem.
Mistake #5: Accurate recordkeeping and purging of records
Recordkeeping is an important aspect of all employers. But where to keep records, how long to keep them and what records must be kept is a burdensome chore.
This wage and hour fact sheet provides you with the down and dirty of record maintenance. www.dol.gov/whd/regs/compliance/whdfs21.htm
I know, all you want to do is run your business, but it is critical to keep up with your employee records. For example, in the event of an I-9 audit, if you provide more forms than you needed, they are fair game for penalties.
Managing and purging records is a dirty job, but someone needs to do it on a regular basis. And make sure that someone is trustworthy. The last thing you need is someone’s identity stolen from your company.
The best way to manage all of the new hire paperwork is by utilizing an electronic onboarding solution. Most service providers will brand your company information into the tool so it looks like the technology is yours.
By utilizing an online tool, you get quite a few benefits:
- New hire paperwork is completed before day one on the job. The employee just needs to bring their I-9 information for you to verify.
- No more paper to file or maintain.
- Eliminate data entry and streamline information into payroll.
- Automate reminders.
- Virtually eliminate all costs related to new hire paperwork.
- Storage: All employee documents are stored in the cloud. You can download when needed, but you no longer have to keep them secured in your office.
- Company Policies: can be uploaded and stored in the onboarding solution. You will now have proof they read the handbook, agreed with the job description and any other policies pertinent to your company. Everything is signed electronically and stored appropriately.
- Take advantage of the tax credits by having it part of the new hire paperwork.
We all know first impressions are lasting ones. While your employee may not remember every day on the job, I guarantee that they will always remember every detail about their first day and their last day. So this is your chance to shine. And it’s not just about the employee, it’s about compliance. It’s about avoiding the hairy scary details of what could go wrong.
My advice for a smooth on boarding: 1) make sure you have updated paperwork, 2) Take advantage of the tax credits, 3) Have an updated handbook and make sure you get a signed copy, 4) Put your records under lock and key and have assign a responsible employee to manage them, 5) Consider using an online solution, it solves most of the problems and makes life easier for everyone.
If you have questions or need honest, expert advice for on boarding… without a sales pitch… just reach out. That’s what I do. I started The Payroll Gal to help you make smart educated decisions on payroll, HR, and benefits and to get the best deal.
I can be reached at www.thepayrollgal.com