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For the person who just inherited HR

HR for small business: what to set up, in what order.

If you just became the person who handles HR at a company of 5 to 50 people, you do not need an HR department. You need a short list, in the right order. Here it is: the eight areas of HR work, what to set up at each stage of growth, and which parts to do yourself, buy, or hand to an expert.

Updated 24 October 2026.

Quick answer. HR for a small business comes down to eight areas: hiring, onboarding paperwork, pay and records, time off and leave, policies, performance, employee questions, and people leaving. Set up the paperwork and payroll before the first hire, add written policies and a review rhythm as you grow, and check which laws apply as you pass headcount thresholds such as 15, 20 and 50 employees. Do the documents yourself, buy payroll, and bring in an expert for the questions where a mistake is expensive.

§01 The work

The eight areas of small business HR.

This is the whole job at a company your size. Most of it is documents and routine. The table shows what each area needs and who usually does it.

Area	What it covers	What you need	Who usually does it
Hiring	Writing the job, posting it, interviewing, making the offer.	A job description, interview questions, an offer letter.	You and the hiring manager
Onboarding paperwork	Required forms, tax forms, policies to sign, accounts and equipment.	Form I-9 for every hire, an onboarding checklist.	You
Pay and records	Payroll, deductions, pay records and personnel files.	A payroll provider and one place for employee files.	Payroll provider or bookkeeper, with you
Time off and leave	Vacation, sick time, holidays and any leave the law requires.	A written time off policy and a way to track balances.	You
Policies	Conduct, harassment reporting, hours, remote work, technology and AI use.	An employee handbook or a short set of written policies.	You, reviewed by employment counsel
Performance	Goals, feedback, reviews, and plans when someone is struggling.	A simple review form and a yearly or twice yearly rhythm.	Managers, with you running the cycle
Employee questions	Pay, benefits, policies, conflicts and complaints.	Clear answers in writing and a way to raise concerns.	You
People leaving	Resignations, terminations, final pay, returning equipment, exit interviews.	A separation checklist and exit interview questions.	You, with counsel for terminations

§02 In order

What to set up at each stage.

You do not need everything on day one. This is a sensible order. The headcounts are where some federal laws begin to apply; state and city rules often start lower.

Before your first hire

Pick a payroll provider. Write the job description and offer letter. Prepare the hiring forms: U.S. Citizenship and Immigration Services says all U.S. employers must complete Form I-9 for every person they hire. Decide where employee files will live.

From the first few hires

Write down the rules people ask about most: hours, time off, how to report a problem. Build an onboarding checklist so every new hire gets the same first week. Set a simple review rhythm, even if it is one conversation a year.

Around 15 employees

The EEOC says most of the laws it enforces apply to employers with 15 or more employees. This is a good point to turn your rules into a proper handbook with an anti-harassment policy and more than one way to report concerns, and to have it reviewed.

Around 20 employees

Federal age discrimination law covers employers with 20 or more employees, according to the EEOC. Check that hiring and review wording is about the work, which the job description guide covers.

Around 50 employees

The U.S. Department of Labor says the Family and Medical Leave Act covers private employers with 50 or more employees in 20 or more workweeks. Leave tracking and a written leave policy become essential.

For a fuller list of what applies at each headcount, see the small business HR checklist.

§03 Do, buy or get help

What to do yourself, and what to hand off.

Do it yourself: the documents

Job descriptions, onboarding checklists, review forms, policies in plain language and answers to common questions. Templates and free generators make these fast, and you know your company better than anyone you could hire.

Buy it: payroll and benefits

Payroll tax filings and benefits administration are precise, recurring work with deadlines. That is the work a payroll provider or a PEO is built for.

Get expert help: high stakes questions

Employment counsel or an experienced HR consultant for terminations, worker classification, leave and accommodation requests, investigations and the legal sections of your handbook.

Keep it in one place

Whatever you choose, keep each employee's documents in one place and write down how you handled each situation, so the next one is handled the same way.

Notice. This guide is general information, not legal advice. Check the rules that apply to you with a qualified advisor.

§04 The routine

A small business HR rhythm you can keep.

Put these on a calendar so the routine work happens on time instead of piling up.

Checklist

HR calendar for a small business

Every hire

Job description reviewed with the hiring manager
Offer letter, Form I-9 and payroll setup completed
Onboarding checklist started before day one

Every pay period

Hours, changes and new hires sent to payroll by the cutoff
Time off balances updated

Every month

Open employee questions closed or answered in writing
Employee files checked for missing documents

Every year

Performance reviews and self evaluations
Handbook and policies reviewed for changes in law or practice
Job descriptions checked against what each role really does

§05 Where HRStak fits

The writing part of HR, started for you.

HRStak helps with the documents in the table above. It works alongside your payroll provider, HR system and applicant tracking system.

Free HR tools

A job description generator, a performance review generator and 32 job description templates. Free, no account and no card.

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HRStak Solo

For the one person doing HR: 28 kinds of HR documents, with a private library for the drafts you save, $97 a month.

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HRStak workspace for teams

Flat monthly plans: Essentials $249, Workspace $599 and Workspace Pro $999. Adding employees within a plan never changes the price.

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§06 Questions

Frequently asked questions.

Does a small business need HR?

It needs the HR work done, even without an HR department. Every business with employees hires, pays, keeps records, sets rules and handles people leaving. At most small companies one person, often the owner or office manager, covers this alongside another job.

When should a small business hire an HR person?

There is no single headcount. Common signals are that the person doing HR is spending a large share of their week on it, hiring is constant, or you now operate in several states. Before a full hire, some companies use an outside HR consultant or a PEO for the specialist parts.

What HR documents does a small business need?

At a minimum: a job description and offer letter for each hire, the required hiring forms such as Form I-9, an employee handbook or a short set of written policies, an onboarding checklist, and a simple review form. Templates for several of these are linked on this page.

What is the difference between a PEO, an HR consultant and HR software?

A PEO takes on payroll, benefits and some HR administration for you as a co-employer. An HR consultant gives you expert help on specific questions or projects. HR software helps you do the work yourself, whether that is payroll, records or writing documents. Small companies often combine two of them.

Which employment laws apply to a small business?

It depends on your headcount and where your people work. The EEOC says most of the laws it enforces cover employers with 15 or more employees, and age discrimination law starts at 20, while the Equal Pay Act covers virtually all employers. The federal FMLA covers private employers with 50 or more employees. State and city rules often start lower, so check the places you operate.

Sources, checked 24 October 2026.

U.S. Citizenship and Immigration Services, Form I-9: "All U.S. employers must properly complete Form I-9 for every individual they hire for employment in the United States." uscis.gov
EEOC, coverage of business and private employers: covered if "it has 15 or more employees who worked for the employer for at least twenty calendar weeks", 20 or more for age discrimination, and "Virtually all employers are covered by the Equal Pay Act." eeoc.gov
U.S. Department of Labor, Family and Medical Leave Act: covers "Private-sector employers who employ 50 or more employees in 20 or more workweeks" in the current or preceding calendar year. dol.gov
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