HR (Human Resources): What It Means for Employers

What it means in practice

Human resources is the part of a business that handles its people as employees: finding and hiring them, paying them, providing benefits, keeping them safe, keeping the records the law requires and managing how they leave. The Bureau of Labor Statistics (BLS) describes the work of human resources managers as overseeing employee relations, securing regulatory compliance, and administering employee-related services such as payroll, training and benefits. The federal rules described below place their duties on "each employer" (for example, 29 U.S.C. 654 for workplace safety and 42 U.S.C. 653a for new hire reporting), not on an HR title, so the obligations exist from the first hire.

What HR professionals do. BLS lists the typical duties of human resources specialists as consulting with employers to identify hiring needs, interviewing applicants, checking references and backgrounds, informing applicants about duties, benefits and working conditions, hiring or referring qualified applicants, running new employee orientation, and keeping employment records and processing paperwork. It describes human resources generalists as handling all aspects of HR work, including recruitment, compensation, benefits, training and employee relations. Human resources managers plan and coordinate the workforce, link management with employees, plan and oversee benefit programs, advise other managers on issues such as equal employment opportunity and sexual harassment, oversee recruitment and hiring, and handle staffing issues such as mediating disputes and directing disciplinary procedures. The recruiting side of this work is covered in talent acquisition.

The profession in numbers. Beyond the wage and job figures above, BLS projects about 73,700 openings for human resources specialists and about 16,800 for human resources managers each year over the decade, and calls the 6 percent growth projected for both occupations from 2025 to 2035 faster than the average for all occupations. Specialists typically need a bachelor's degree; managers typically need a bachelor's degree and 5 years or more of related work experience. BLS updates these figures, so check the current pages.

The core HR functions and the laws behind them. Most HR tasks trace to a specific legal duty. Hiring involves Form I-9 employment verification, a Form W-4 and a state new hire report, usually handled during onboarding. Pay is governed by the Fair Labor Standards Act (FLSA) and run through payroll. The Small Business Administration (SBA) lists as required employee benefits the employer share of Social Security taxes, workers' compensation, disability insurance in California, Hawaii, New Jersey, New York, Rhode Island and Puerto Rico, leave under the FMLA, and state unemployment insurance, for which you may need to register with your state workforce agency. Safety falls under the Occupational Safety and Health Act, which requires each employer to furnish a workplace free from recognized hazards that are causing or are likely to cause death or serious physical harm, and to comply with OSHA standards (29 U.S.C. 654). Fair treatment falls under the anti-discrimination laws the EEOC enforces. Separation brings its own rules, covered in offboarding.

Which rules apply at which size. Federal employment laws switch on at different headcounts, so HR duties grow as a business grows. With at least one employee, the EEOC says you are covered by the Equal Pay Act, and the OSH Act duties above are stated for each employer. The FLSA covers enterprises with an annual dollar volume of sales or business done of at least $500,000, as well as hospitals, schools and government agencies, and also covers individual workers engaged in commerce or in the production of goods for commerce even where the enterprise test is not met (DOL Fact Sheet #14). At 15 employees, the EEOC says a private employer is covered by the laws against discrimination based on race, color, religion, sex (including pregnancy), national origin, disability and genetic information, which include the Americans with Disabilities Act (ADA). At 20 employees, age discrimination coverage (age 40 or older) is added, and the Department of Labor says COBRA applies to group health plans sponsored by employers with 20 or more employees in the prior year. At 50 employees in 20 or more workweeks, a private employer is covered by the FMLA. At 100 employees, the EEOC says you must file an EEO-1 Report every year (federal contractors file at 50 employees and $50,000 in government contracts), and the WARN Act requires at least 60 days' notice of a covered plant closing or mass layoff (20 CFR 639.2).

How employees are counted. Each law counts differently. For EEOC coverage, any worker who qualifies as an employee counts, including part-time, seasonal and temporary employees, while independent contractors and owners do not; the employer must have the required number (15 or 20) for every workday in at least 20 calendar weeks in the current or preceding calendar year, and interrelated employers can be treated as a single employer. For OSHA recordkeeping, size is based on peak employment in the entire company during the last calendar year (29 CFR 1904.1). For WARN, an employer has 100 or more employees excluding part-time employees, or 100 or more including part-time employees who in the aggregate work at least 4,000 hours per week, exclusive of overtime (20 CFR 639.3).

Steps for a first hire. The SBA lists these steps to set up payroll: get an Employer Identification Number (EIN), find out whether you need state or local tax IDs, decide whether you want an independent contractor or an employee, ensure new employees return a completed W-4, schedule pay periods, create a compensation plan for holiday, vacation and leave, choose an in-house or external payroll service, decide who will manage payroll, know which records must stay on file and for how long, and report payroll taxes quarterly and annually. Federal rules add timed steps. The employer must examine the employee's identity and work authorization documents and complete Section 2 of Form I-9 within three business days of the hire (8 CFR 274a.2(b)(1)(ii)). The new hire report goes to the state where the employee works and contains the employee's name, address and Social Security number, the date services were first performed, and the employer's name, address and identifying number (42 U.S.C. 653a).

Workplace posters. The Department of Labor says some of its statutes require notices to be provided to employees or posted in the workplace, that not all employers are covered by each statute, and that its FirstStep Poster Advisor can be used to determine which posters you must display; the posters can be downloaded free. Federal regulations require each employer to post the OSHA notice in each establishment in a conspicuous place where notices to employees are customarily posted (29 CFR 1903.2). The EEOC says covered employers must display a poster describing the federal employment discrimination laws. State posters are separate; DOL directs employers to state labor departments.

Recordkeeping. Keeping records is one of HR's most rule-bound tasks, and the retention periods differ. EEOC regulations require any personnel or employment record to be kept for one year from the date the record was made or the personnel action taken, whichever is later, and one year from the date of an involuntary termination; once a charge is filed, relevant records are kept until final disposition (29 CFR 1602.14). Under the FLSA, payroll records are kept at least three years and records on which wage computations are based, such as time cards and wage rate tables, for two years, with no particular form required (DOL Fact Sheet #21). The IRS says to keep employment tax records for at least four years after filing the fourth quarter for the year. Forms I-9 are kept three years after the date of hire or one year after employment ends, whichever is later (8 CFR 274a.2(b)(2)). OSHA 300 Logs, annual summaries and 301 Incident Reports are kept five years following the end of the calendar year they cover (29 CFR 1904.33).

OSHA reporting and the annual summary. Even an employer exempt from OSHA records must report a work-related fatality within 8 hours and an in-patient hospitalization, amputation or loss of an eye within 24 hours (29 CFR 1904.1 and 1904.39). Employers who keep records must review the OSHA 300 Log at year end, have a company executive certify the annual summary, and post it no later than February 1 of the following year, keeping it up until April 30 (29 CFR 1904.32).

Where states differ. This entry describes federal rules; state laws often reach smaller employers. Two examples from official state pages: the California Civil Rights Department says it is illegal for employers of 5 or more employees to discriminate against applicants and employees, that harassment is prohibited in all workplaces, and that employers with five or more employees must provide sexual harassment training; the New York State Division of Human Rights says the Human Rights Law covers every employer in the state, regardless of size. The EEOC also notes that an employer not covered by federal law may still be covered by a state or local anti-discrimination law. Check your own state; the Department of Labor lists state labor offices.

HR records and systems. Federal rules generally allow electronic records. The FLSA requires no particular form, and Form I-9 may be generated or retained electronically if the standards in 8 CFR 274a.2(e) through (i) are met. Many employers keep HR records in a human resources information system (HRIS). Written policies are often collected in an employee handbook; the SBA notes that detailing benefits there gives staff a reference for workplace requirements.

Questions employers ask. Do we need an HR department? No federal rule cited here requires one; the duties fall on the employer (29 U.S.C. 654; 42 U.S.C. 653a). Do contractors count toward thresholds? Not for EEOC coverage, but the SBA warns that a contractor who meets the legal definition of employee can mean back taxes, penalties, benefits and FLSA wages. Do part-time workers count? For EEOC coverage, yes; WARN has its own part-time rule (20 CFR 639.3). Who certifies the OSHA summary? A company executive, such as an owner of a sole proprietorship or partnership, a corporate officer, or the highest ranking official at the establishment (29 CFR 1904.32). Related terms include at-will employment and performance reviews. Confirm specifics with the agency or a qualified professional.

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