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4 Decisions You Need to Document as a Business Owner

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The pandemic seems to change the business world on the daily. All the changes businesses have had to endure during the past few months and the upcoming ones have added extra stress to every employer and employee, making it easy for some practices to slide or lower the strictness about following company rules and policies. Allowing flexibility during crises may make sense in certain situations, but there are some areas where you don’t want to fall short of your usual standards. Documentation is certainly one of those.

Documenting important decisions you make as an employer is an essential part of risk management. Taking these seemingly unnecessary steps can outweigh the costs of avoiding them.

Here are four examples of decisions you should document regularly:

Discipline and Termination

Documenting all the actions you take to warn an employee about poor performance or unacceptable behavior before terminating their employment demonstrates that you made a good faith effort to help the employee meet expectations and avoid termination. You’re on the safest ground terminating employment if you can show that the employee understood what was expected of them and what would happen if they failed to improve.

Investigations

Make sure that you document every step of an investigation as well as the resulting actions taken so you can show that you fulfilled your legal obligations. Having a clear record will also help you ensure that similar situations are handled consistently in the future.

Hiring

Employers sometimes get into trouble with the law by asking questions of job candidates that reveal their membership in a protected class. Asking about church attendance, for example, maybe intended to ascertain weekend availability, but it allows the applicant to claim they were discriminated against. Hiring decisions should be based on job-related factors. Proper documentation shows that they were.

Promotions and Pay

Documentation here should show that pay and promotion practices are systemized and based only on bona fide job-related reasons. The federal Equal Pay Act requires men and women in the same workplace to be given equal pay for equal work while Title VII of the Civil Rights Act requires that employers not discriminate based on someone’s inclusion in a protected class. If you lack documentation explaining why one employee is paid more than another in the same position, your risk of being sued (and losing) goes up substantially.

As an employer, you have to make many decisions daily, however, taking the time to document the major business decisions will save you future headaches. Having a Human Resources Specialist in your team who can take on these tasks is important to ensure all steps are taken properly. That Specialist could be a Tribus Solutions Human Resources Specialist. At Tribus Solutions, we provide business owners with services to help them manage and grow their business. Whether you need a Human Resources Specialist, a CPA, or just a Consultant, we can help. Contact us today to get an estimate.

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