5 HR Mistakes Costing Small Businesses Thousands (and How to Fix Them)

May 28

HR compliance isn’t just about paperwork—it’s about protecting your business, your people, and your bottom line. But for many small businesses and startups, the most costly missteps are the ones you don’t even realize you’re making. Here are five of the most common HR compliance mistakes we see—and how to course-correct before they turn into legal or financial liabilities.

Mistake #1: Misclassifying Employees and Contractors

Misclassification can lead to penalties, back taxes, and wage claims. If your “1099” worker is operating like a full-time employee, it’s time for a classification audit.

Fix It: Use IRS and DOL classification tests or schedule a compliance check-up with a trusted HR advisor.

Mistake #2: Outdated or Missing Employee Handbooks

No handbook—or a DIY template—leaves your company exposed. Policies need to reflect current state and federal law and your workplace culture.

Fix It: Invest in a custom handbook reviewed annually to stay aligned with legal updates

Mistake #3: Inconsistent Hiring and Onboarding Practices

From job postings to offer letters, inconsistency can create bias and even discrimination risk.

Fix It: Standardize hiring procedures, document decisions, and ensure onboarding includes required notices and trainings.

Mistake #4: Skipping Required Labor Law Postings

Yes, even for remote teams! Missing posters can trigger fines and investigations.

Fix It: Post required notices in common areas and provide digital versions for remote or hybrid staff.

Mistake #5: Ignoring Employee Complaints

Unaddressed concerns—especially around harassment or retaliation—can escalate fast.

Fix It: Create clear reporting pathways and document every step taken to address concerns with consistency and care.

Compliance doesn’t have to be intimidating. At The ANAVI Collective, we help businesses stay protected with proactive HR support. Ready to fix the gaps before they become costly mistakes?

📅 Schedule a Compliance Check-Up → www.theanavicolletive.come/scheduling

Shaunyce Gay