Avoid Startup Aches and Pains With This Checklist of HR Essentials

Feb 26, 2020

Launching a healthcare startup can be exhilarating. Picking a name. Signing off on a logo design. Ordering business cards. Sharing your excitement with investors. Strategizing about growth. What’s missing from this list?

It’s people—

And all the associated responsibilities that help keep you in compliance with a long list of employment regulations and keep your people happy and thriving at your company. Things like paying employees on time, providing them with good benefits, filing tax paperwork on their behalf, creating a workplace culture that inspires—these are such important tasks to get right but often get overlooked in the typical startup environment.

“So many founders mistakenly believe the people piece will just fall into place,” says Michelle Thompson, vice president of human resources at XMI, a Nashville-based provider of outsourced human resources and accounting services for small- to mid-size companies. “But that couldn’t be further from the truth. Even if you have just one co-founder working with you in your healthcare startup, you need to be thinking about HR.”

As you add employees, HR becomes even more important.

“Employees won’t share your same enthusiasm for the company if you aren’t taking care of them,” Thompson says. “At best, that means low morale and productivity. At worst, it’s high turnover, which can be disruptive not to mention expensive to address.”

A strong foundation in HR, even before making your first hire, can help turbo-boost your healthcare startup’s growth. Avoid common startup aches and pains and get HR right, right from the start, with this checklist of HR essentials:


As a founder, you may not be drawing a paycheck yet, but other members of your team definitely will expect their paychecks to arrive on time and without error.

  • Request an employer identification number.
  • Calendar quarterly federal (and state, if applicable) tax payment deadlines for the employer’s portion of Social Security and Medicare taxes.
  • Decide on a payroll schedule. Keep in mind that employees generally prefer to be paid more frequently. Biweekly seems to strike a happy medium for both employers and employees. Don’t forget to check your state’s pay frequency laws.
  • Make a list of types of earnings (such as commission, bonus, holiday, overtime) and deductions for employee benefits like health insurance, flexible spending accounts, gym memberships, parking or retirement savings. You may not be offering all of these yet, so be prepared to re-visit this list as you grow.
  • Pick a payroll provider. Working with a payroll provider can be a low-cost way to process payroll and pay related taxes, freeing up founders for revenue-generating tasks and providing them with peace of mind. Don’t skimp here: Going without a payroll provider is a terrible way to save money because one missed form can create hours of unplanned (and distracting) work to fix and file.

Compensation and Benefits

There’s usually a tradeoff working for a cash-strapped healthcare startup—namely, trading big-business benefits and paychecks for the excitement of helping build something from the ground-up and all the associated perks that come along with it. No matter how exciting the prospect of joining a healthcare startup team, your employees will have an expectation to be paid fairly and be offered a baseline of benefits.

  • Determine your pay structure based on a market evaluation. If the numbers aren’t there for fair wages, look for alternative ways to compensate employees, such as equity shares, generous time off or deferred compensation (such as a bonus upon meeting a performance goal).
  • Understand your benefit requirements. Did you know some employee benefits are mandatory? These vary by state, but could include workers’ compensation, unemployment insurance and short-term and long-term disability insurance. Voluntary benefits run the gamut and include things like health insurance, vision and dental coverage, 401(k) or other retirement savings vehicles, life insurance and wellness perks.
  • As a founder, the equity package you offer your employees reflects your beliefs about the growing company and can have serious financial impacts down the road. This guide will show you how to use equity to attract top talent for your startup.

Recruiting and Onboarding Practices

There are several HR tasks to check off the list before you even post your first job opening. To keep the great talent you find, you’ll also need to consider your onboarding practices and company culture.

  • Classify workers correctly. Exempt employees, non-exempt employees, independent contractors or consultants—each of these classifications carry their own set of requirements.
  • Understand your Form I-9, Employment and Eligibility Verification responsibility. Businesses of every size are required to complete and retain Form I-9 for every person they hire. Some states also have mandatory E-Verify laws, which is an online employment eligibility platform.
  • Create an employee handbook. This legal document outlines required legal notices that clearly explain leave, reasonable accommodation and federal workplace policies. Many startups can check this box by customizing an employee handbook template—look for ones from reputable sources such as the Society of Human Resource Management or Nolo. An employee handbook can also be an excellent place to reinforce your company’s culture and reflect your vision in a creative way.
  • Safeguard your hiring process by budgeting for background checks, including criminal history, motor vehicle records, education and employment verification, references and drug testing.
  • Rethink recruiting. The recruitment strategy of a startup looks different than that of an established business. Save time on this time-consuming process by leaning on your network and your passive candidates.

Compliance Requirements

Even if you’re running a home-based healthcare startup, you will still have to comply with many local, state, and federal regulations. Do not ignore the regulatory details. You may avoid some red tape in the beginning, but your lack of compliance could become an obstacle as your business grows. This is why you should invest in a lawyer for your health startup.

  • Order labor posters. Employers must post state and federal labor law posters in a place where employees can see them. If you have remote workers who don’t visit the office regularly, you’ll need to email them copies.
  • Tune into your compliance requirements. Regulatory requirements change and grow more complex as a business adds employees. If you have at least one employee, compliance with OSHA, Fair Labor Standards Act, Wage and Hour, HIPAA privacy and equal employment opportunity laws apply. Once you have 15 employees, additional regulations kick in, so it’s important to revisit this topic often.

Employee Relations

Whether it’s workplace incivility or absenteeism, issues caused by and impacting your employees will come up. The best course of action is having policies and protocols in place and clearly communicated with your team so that expectations are defined. This also can help protect your healthcare startup in case of an employment lawsuit.

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