HR Compliance Checklist: 12 Things Every Small Business Must Have in Place

Why Compliance Matters Even at 5 Employees

Many small business owners assume HR compliance requirements only kick in at 50 or 100 employees. That's a costly misconception. Several major federal laws apply from the moment you hire your first employee — and state laws often have even lower thresholds.

Here's the checklist.

Federal Posters (Required Day 1)

The Department of Labor requires you to display specific posters in your workplace. These are free to download and print from dol.gov:

• Fair Labor Standards Act (FLSA) — minimum wage and overtime
• Family and Medical Leave Act (FMLA) — applies at 50+ employees, but posting required earlier in some states
• Equal Employment Opportunity (EEO) — applies at 15+ employees
• Occupational Safety and Health Act (OSHA)
• Employee Polygraph Protection Act
• Uniformed Services Employment and Reemployment Rights Act (USERRA)

For remote workers, these must be accessible electronically.

Written Policies You Must Have

1. At-Will Employment Statement

If you're in an at-will state, document it. This protects you in wrongful termination claims.

2. Anti-Harassment and Anti-Discrimination Policy

Required by Title VII (15+ employees) but best practice from day one. Must include a complaint procedure.

3. Overtime Policy

The FLSA requires overtime pay (1.5x) for non-exempt employees working over 40 hours/week. Document who is exempt and why.

4. PTO and Leave Policy

Document your PTO accrual method, carryover rules, and payout on termination. Many states regulate PTO payout — check yours.

5. Remote Work Policy (if applicable)

Document expectations, equipment, expense reimbursement, and data security requirements.

Recordkeeping Requirements

6. Payroll Records

The FLSA requires you to keep payroll records for 3 years. This includes hours worked, pay rates, and deductions.

7. I-9 Forms

Keep for 3 years after hire date or 1 year after termination, whichever is later.

8. Tax Records

Keep all payroll tax records for at least 4 years after the tax is due or paid.

Classification and Pay Equity

9. Exempt vs. Non-Exempt Classification

Document why each employee is classified as exempt or non-exempt under the FLSA. The salary threshold for exempt status is $684/week ($35,568/year) as of 2024.

10. Equal Pay Documentation

Several states now require pay equity audits or prohibit asking about salary history. Know your state's rules.

Benefits and Leave

11. ACA Compliance (50+ full-time equivalent employees)

Applicable Large Employers must offer minimum essential coverage or face penalties. Track your FTE count carefully as you grow.

12. State-Mandated Leave

Paid family leave, paid sick leave, and disability insurance requirements vary dramatically by state. California, New York, New Jersey, Washington, and Massachusetts have the most extensive requirements.

How Ogo Ops Helps

Ogo Ops tracks FLSA classification for every employee, maintains payroll records automatically, and flags compliance issues in real time. The onboarding module collects I-9 documentation and W-4s digitally — so your records are always complete and audit-ready.