Top HR Compliance Mistakes Small Manufacturing Companies Make (and How to Avoid Them)
Small manufacturing companies face unique HR challenges. With production deadlines, employee safety, and compliance requirements all competing for attention, HR often gets pushed to the back burner. Unfortunately, neglecting HR compliance can result in costly penalties, employee dissatisfaction, or even operational shutdowns.
Here are the top HR compliance mistakes small manufacturing companies make—and practical steps to avoid them.
Are You Staying Compliant with Wage and Hour Laws?
Manufacturing environments often involve shift work, overtime, and non-exempt employees, making compliance with wage and hour laws critical. Are you properly tracking hours and paying overtime? Do you ensure employees are compensated for any pre-shift or post-shift activities, like equipment setup or cleaning?
Common pitfalls include:
Miscalculating overtime for employees who work irregular schedules.
Failing to pay for short breaks or required pre- or post-shift activities.
Misclassifying employees as exempt when they should be non-exempt.
To avoid these mistakes, invest in a reliable timekeeping system and conduct regular audits to ensure compliance with the Fair Labor Standards Act (FLSA).
Are Your Safety Practices OSHA-Compliant?
Workplace safety is paramount in manufacturing, and OSHA regulations are strict. Are you providing adequate safety training? Do you have written safety policies in place?
Failure to comply with OSHA standards can result in severe penalties, not to mention harm to employees. Key areas to address include:
Providing personal protective equipment (PPE) and ensuring it’s used correctly.
Documenting and addressing workplace hazards through regular safety inspections.
Offering safety training specific to your industry and equipment.
Consider conducting an OSHA compliance audit and keeping detailed records of safety programs and incident reports.
Do You Have Clear Policies for Attendance and Scheduling?
Manufacturing environments often require strict adherence to schedules to meet production demands. Are your attendance and leave policies clear, consistent, and compliant with applicable laws?
Issues can arise when:
Employees feel penalized for taking legally protected leave under the Family and Medical Leave Act (FMLA) or state equivalents.
Attendance policies are inconsistently enforced, leading to potential discrimination claims.
Ensure your policies are clearly documented in an employee handbook and align with legal requirements. Train supervisors to handle attendance issues fairly and in compliance with the law.
Are You Compliant with Anti-Discrimination Laws?
Manufacturing companies often have diverse workforces, making compliance with anti-discrimination and anti-harassment laws essential. Do your managers and employees understand their responsibilities under Title VII of the Civil Rights Act, the Americans with Disabilities Act (ADA), and other anti-discrimination laws?
Common mistakes include:
Failing to accommodate employees with disabilities.
Allowing a culture where harassment or discrimination goes unaddressed.
Regular training and a clear, enforced anti-harassment policy are vital. Employees need to know how to report issues, and managers must know how to respond appropriately.
Are You Documenting Employee Performance and Discipline?
Verbal warnings and informal feedback are common in fast-paced manufacturing environments, but a lack of documentation can lead to problems. Are you keeping records of performance reviews, disciplinary actions, and policy violations?
Without proper documentation, disputes over terminations or promotions can become legal liabilities. Develop a standardized system for tracking and documenting employee performance, and ensure managers understand its importance.
Are You Properly Handling I-9 Compliance?
Manufacturing companies often hire seasonal or temporary workers, which increases the likelihood of I-9 compliance issues. Are you completing and retaining I-9 forms correctly for every employee?
Common mistakes include:
Failing to verify work eligibility within the required timeframe.
Incorrectly completing or storing I-9 forms.
To avoid penalties, conduct regular internal audits of I-9 forms and train hiring managers on proper procedures.
Are You Keeping Up with Training Requirements?
Manufacturing employees often require specialized training to operate machinery safely and efficiently. Are you documenting this training and ensuring it’s updated regularly?
Training gaps can lead to:
Increased workplace accidents.
Regulatory fines for non-compliance.
Develop a training schedule that includes onboarding for new hires, annual refreshers, and training for new equipment or processes. Documentation is key—if it’s not written down, it didn’t happen.
Do You Have a Plan for Managing Workplace Injuries?
Injury reporting and workers’ compensation management are critical in manufacturing. Do you have clear procedures for handling workplace injuries? Are you documenting incidents correctly and responding promptly to employee needs?
Failure to report injuries or mishandling workers’ compensation claims can result in fines and damaged employee trust. Establish clear protocols for reporting injuries, and work with your insurance provider to manage claims effectively.
What’s the Cost of Non-Compliance?
The cost of non-compliance in manufacturing isn’t just financial—it’s also about trust and operational efficiency. Missing compliance deadlines or cutting corners on safety can lead to:
OSHA fines.
Employee lawsuits.
Higher turnover due to dissatisfaction or perceived unfairness.
By proactively addressing compliance issues, you not only protect your business but also create a safer, more positive workplace for your employees.
How Can Small Manufacturing Companies Get HR Right?
Managing HR in a manufacturing environment is complex, but you don’t have to do it alone. Start by identifying your key compliance risks—whether it’s wage and hour issues, OSHA standards, or I-9 documentation—and address them systematically.
If you need guidance, Peopleish specializes in helping small businesses like yours navigate HR compliance challenges. From creating customized handbooks to conducting safety audits, we provide tailored solutions that keep your business running smoothly.
Strong HR practices aren’t just a compliance requirement—they’re the foundation of a productive and successful manufacturing operation. Ready to get started? Let’s build your compliance strategy together.
