HR and payroll are the backbone of every successful small business and getting them right from day one can save you time and help protect your business.
In this episode of Small Business Smarts, we will break down the essentials new business owners need to understand before hiring their first employee, from onboarding and employee classification to recordkeeping, payroll accuracy and compliance.
For more information, visit ADP.com/SPARK
Victoria Jordan, founder of Pureworks Studio
I don't have employees yet, but I'm getting closer to that point and I want to be prepared. It's time for me to investigate what I know and don't know about HR and payroll. So I'm going to reach out to Erron Stark at ADP for some advice.
Hey, Erron. As a small business owner, I'm starting to compile a list of things I need to learn about HR and payroll, and I wanted to ask an expert about what I should keep in mind.
Erron Stark, ADP vice president and general manager, small business services
Yeah. So payroll and HR tend to go hand in hand. The payroll is more of the “have to,” right? Like what do I have to do to make sure that I get my people paid on time and accurately. The HR is more the the “how to.” Like, how do I make sure that I am staying compliant with all the regulatory, aspects of running a business, along with the benefits that I might have to provide to my employees?
Victoria Jordan
That makes sense. And I love that you broke it down, that simply the have to and the how to. What else might I need to know?
Erron Stark
Well, it starts on day one. So the second that you're ready to bring on that first worker, you're going to have to classify them as either a traditional W-2 employee or a contract employee. And those will have their own implications. But over the last five years, there has been this growth of things such as remote work or what you might have heard too, is the gig economy.
So things like state and employment insurance and income tax will vary based on where your employee may live, where your company is located, and then the state that they actually conduct the work in. And I'll take it a step further, where things such as minimum wage, based on where your company is, could be $15 an hour, but where that employee that you just hired remotely or could be part time work in a different state could be $17 an hour.
Victoria Jordan
That's really good to know.
Erron Stark
Yeah, my dad used to have this great saying, which was “Measured twice and cut once” to make sure that you're avoiding costly mistakes. And when it comes to the, you know, setting a payroll for your organization, ensuring that you measure twice up front will then allow you to focus so much more on growing your business tomorrow and in years to come.
Victoria Jordan
Thanks so much, Erron. This is so helpful. So the moral of this story is managing compliance is easier when HR and payroll work together. And for tools to help bring that all together, visit ADP.com/SmallBusiness.
