HR Basics

HR Basics: What You Need to Know

Human resources (HR) is one of the most complicated aspects of running a business. It’s also one of the most important because salaries and benefits make up a large portion of your operating expenses.

HR deals with your employees and is usually in charge of

HR sets the tone for how employees communicate and settle disputes. HR plays a large role in creating your corporate culture. Your HR staff will be the first people to introduce your new hires to your company’s values during onboarding.

HR has a lot to deal with, including federal and state rules and regulations, which can be tough to keep up with. If you have fewer than 50 employees, there are four basics you should know: employee files, an employee handbook, displaying required posters, and payroll.

Employee Files

When you first hire an employee, you should start the practice of keeping three separate files for each employee: an I-9 file, a general file, and a medical file.

I-9 File

Form I-9 is used to verify an employee’s eligibility to work in the United States. Instead of keeping an individual I-9 file for each employee, keep all of your employees’ I-9 forms in one file.

You aren’t required to file the I-9 with the federal government. However, you must keep the forms for three years after an employee’s date of hire or for one year after an employee’s termination, whichever is later.

Employee General Files

Keep employee general files for your own benefit. Employee files should include resumes, reviews, disciplinary actions, training verification, evaluations, W-4 forms, and payroll details.

Employee Medical Files

Your employees’ medical files will contain notes from doctors, disability information, and any other important medical information. Because these files contain private and confidential information, you must protect and secure these files separate from other files. Make sure to keep them in a locked and secure place.

Employee Handbook

Your employee handbook tells your employees what you expect from them, what they can expect from you, and protects you in case there’s a dispute. An employee handbook can be as simple or complex as you want it to be, but make sure each employee receives a copy, reads it, and signs a statement saying they’ve read and understood it. Keep that statement in their employee general file.

Required Posters

In the United States, you’re required to display certain posters  in an easily accessible place. These posters are mandated by the Department of Labor, Equal Employment Opportunities Commission (EEOC), and Occupational Safety and Health Administration (OSHA). Your state may also have laws requiring you to display state-specific posters.


You must pay your employees at least minimum wage. Some states have set their minimum wage as higher than the federal minimum wage, which is $7.25 an hour, and some states have set their minimum wage lower than the federal minimum wage. If your state has different minimum wage rates than the federal government, the higher rate applies.

Unless an employee is exempt, you must pay them overtime of time and a half their hourly rate when they work more than 40 hours.

You must also pay your employees at regular intervals, so you cannot pay your employees weekly one month than bi-weekly the following month.

Your employees must receive their gross pay, deductions and withholdings, and net pay for the pay period and the year to date for each paycheck. You must also provide your employees with their yearly W-2  form by January 31 of each year.