HR Policies Every Small Business Should Have

When you're running a small business, Human Resources (HR) might seem like something only large companies have. But the reality is, even without a dedicated department, having HR policies for small businesses in place is essential, not just for legal compliance, but for creating a smooth, professional, and consistent workplace. 

Think of HR policies as the rulebook for your team: they clarify expectations, reduce risk, and support a positive work environment. Whether you’ve got 3 employees or 30, these foundational HR policies are a must. 

1 - Employment Classification Policy 

Proper worker classification is critical. Misclassifying employees as independent contractors can lead to serious tax and legal consequences. 

Your HR policy should clearly define each type of worker you hire (full-time, part-time, temporary, or contractor) and specify what benefits and obligations apply to each. 

2 - Anti-Discrimination and Harassment Policy 

One of the most important HR policies for small businesses is a clear anti-discrimination and harassment policy. This sets the tone for a safe and inclusive work environment. Be sure to include: 

● A zero-tolerance statement 

● Steps for reporting incidents 

● How complaints are investigated and resolved 

3 - Attendance and Time-Off Policy 

Whether your team is remote, in-office, or hybrid, you need guidelines around schedules, lateness, and time off. Your policy should cover: 

● Work hours and punctuality 

● Sick leave and vacation time 

● Paid vs. unpaid time off 

● Compliance with federal or state leave laws (like FMLA). 

4 - Compensation and Payroll Policy 

Transparency in how your team is paid is essential. Outline: 

● Pay schedule (biweekly, monthly, etc.) 

● Overtime and holiday pay policies

● Raises, bonuses, or commissions 

● Payroll processing systems you use 

5 - Workplace Conduct Policy 

What does professional behavior look like at your business? This policy should define: 

● Dress code (if applicable) 

● Conflict resolution procedures 

● Appropriate use of company equipment and internet 

● Expected workplace behavior and ethics 

6 - Remote Work and Technology Use Policy 

With flexible work on the rise, small businesses must clarify expectations for remote employees. Your remote work policy should address: 

● Required hours and availability 

● Communication expectations 

● Data privacy and cybersecurity practices 

● Use of company laptops or devices 

7 - Disciplinary and Termination Policy 

Even in a small team, discipline and termination procedures should be consistent and documented. Outline: 

● Types of misconduct or violations 

● Verbal/written warning process 

● Conditions for suspension or termination 

● Final paycheck and offboarding procedures 

Why HR Policies Are a Smart Move for Small Businesses

Even if your business is just getting started, having documented HR policies: 

● Protects you legally 

● Prevents miscommunication 

● Sets clear expectations 

● Helps you onboard new employees smoothly 

● Supports a positive, productive workplace culture 

Need Help With Your HR Policies?

Setting up HR policies doesn’t have to be overwhelming, and you don’t have to do it alone. At Accurate Pay Systems, Inc., we specialize in helping small businesses build the right HR foundation with practical, easy-to-understand policies that grow with your team. Let us help you create custom and compliant HR policies tailored to your business.