The rules apply to you, even with 5 employees. From exempt vs. non-exempt to paid sick/safe leave and auditable records, small employers carry the same obligations as large ones. The difference? You don’t have time for guesswork. PeopleWorX pairs modern payroll + HR ttech with a real human who helps you make the right call, before it becomes costly.
Key idea: Compliance = clarity in duties, pay, leave, time, and documentation. Get those five right and everything else is easier.
The cost of “I think we’re fine” (and how to do better)
- Misclassification: Titles don’t determine exemption; duties and thresholds do.
- Overtime: Multiple rates, bonuses, and dual roles change the math.
- Leave: City and state rules differ; remote team = multi-jurisdiction.
- Records: If you can’t export clean time/pay/leave logs for 3 years, you’re exposed.
- Managers: “Use your best judgment” leads to uneven (and risky) decisions.
Do this instead: document roles, track hours precisely (yes, for non-exempt salaried), standardize leave, and train managers when to escalate.
Two everyday scenarios, what good looks like
1) Busy season at a small CPA firm (classification & overtime)
Crunch time hits. Staff work late; some are salaried. Wrong move: assume salaried = exempt and pay no overtime.
Right move: map duties to exemption tests, set blended overtime rates for employees with multiple roles, and require real-time timekeeping, not “approve after the fact.”
Manager playbook (copy/paste):
- Confirm role classification before OT begins.
- Approve OT in advance, in writing (within your system).
- Audit one timecard per team weekly for accuracy.
2) Boutique manager requests reduced hours (leave & scheduling)
Wrong move: informal swaps via text, then reconcile later.
Right move: route requests through a single channel; apply the most protective leave rule for the work location; log approvals/denials in the system with accruals automatically updated.
Manager playbook (copy/paste):
- Point every request to one form/inbox.
- Check policy + jurisdiction note (city/state).
- Record decision + effective dates; system updates accruals.
Your SMB compliance blueprint (6 steps)
- Classify roles correctly. Base exemption on duties + thresholds; re-review at promotion or scope change.
- Track time precisely. Capture onsite/remote/mobile; avoid “off-the-clock” culture.
- Pay overtime the right way. Configure blended rates and bonus impacts once; spot-check monthly.
- Standardize leave. Use the most protective standard; centralize accruals, caps, and increments.
- Keep auditable records. Store time, pay, policies, acknowledgements, and leave logs in one system.
- Educate managers. Give short decision trees and clear escalation rules.
How PeopleWorX makes the rules easier to follow
- Payroll + Time + HRIS in one place for clean data and fewer blind spots.
- Named, dedicated support (not a queue) to talk through gray areas.
- Multi-state ready: taxes, leave accruals, reporting by jurisdiction.
- FrameWorX advisory: phased policies, onboarding, training, retention.
Five-minute preview: configuration, a live timecard, an OT calc with two rates, and a leave request moving to approval.
Uncover Hidden HR Risk Before It Impacts Your Business
This assessment highlights where HR risk exists so leaders can manage, mitigate, or accept it. Results focus on the HR areas most likely to create employee issues, disruption, or unexpected cost.
Take Your HR Risk Assessment →Frequently Asked Questions
Q1: Do FLSA overtime rules apply to small businesses?
Generally, yes. Coverage often applies regardless of headcount, and exemption depends on job duties and thresholds, not titles.
Q2: Do I need to track time for salaried staff?
If they’re non-exempt, absolutely. Time tracking is required to pay overtime accurately and maintain records.
Q3: What’s the risk of misclassifying an employee as exempt?
Back overtime, penalties, potential audits, and higher legal exposure. It’s cheaper to classify correctly up front.
Q4: How should I handle conflicting state and local leave rules?
Adopt the most protective standard across your footprint, document it clearly, and centralize accruals/approvals.
Q5: How do remote employees affect compliance?
Employees are generally subject to rules where they work. Confirm tax, leave, and posting requirements for each work location.
Q6: Can PeopleWorX help during an audit?
Yes. We configure jurisdiction rules, keep your records export-ready, and your named rep helps you respond confidently.
If you need help with workforce management, please contact PeopleWorX at 240-699-0060 | 1-888-929-2729 or email us at HR@peopleworx.io
