Getting the legal side of your freelance business right
By Colin Bates
March 27 2023 - Getting set up as a freelance HR professional business requires a lot of preparation. It is more demanding than becoming a freelance writer or graphics designer, where you can start with a small client base and work up. To be taken seriously and cover compliance issues, you need to get the pieces in place before launching your solo venture.
One area to get right from the start is the legal issues. Human Resources in the workplace have never been more critical, and within the traditional functions of recruitment, onboarding, and training, there is now greater pressure to be constantly up to date with HR law and regulations. From hiring and firing to workplace safety, GDPR, benefits and pay, and more, there is a lot to understand if you will be effective.
Being prepared for legal challenges is a way to protect yourself as a freelance HR professional. However, it is good practice to be on top of the legal issues that could impact your day-to-day work. Here we explore some of this legal side of your freelance business.
What is HR legal compliance?
HR legal compliance is the framework that governs the workplace environment. It is intended to protect the employee but also the employer. All businesses are duty-bound to work within the framework of HR legal compliance, which you, as the HR consultant, would be responsible for achieving. The consequences of non-compliance can include fines, penalties, and other legal proceedings.
Therefore, you will need to understand the policies and procedures that will keep your clients, and by extension your business, in line with compliance laws. Compliance issues cover employee benefits and compensation, health and safety, discrimination in the workplace, confidentiality, and worker rights as they currently stand. Something as simple as advertising a position for a role within a company is accompanied by a host of equality laws that cannot be overstepped.
How this will impact your HR consultancy
You will not only need to know the legal side of HR consultancy at the start of your business but throughout your career as a freelancer. It is essential to stay informed of any changes to the law, updating policies and compliance. While the company you work for might outsource these legal matters to a legal firm, you will need to know and understand the law and work alongside the legal professionals. As you are on the front line of communicating and educating the team at your clients' company and negotiating contracts and the like, you will need to be knowledgeable. It takes a detailed understanding of the law to understand even when you need to ask a question, so there is no point in leaning into the clients' solicitor and hoping they have it covered.
How to manage the legal side of your HR freelancing business
It might seem overwhelming as an individual starting out. Before considering setting up a business of your own, you will likely have had extensive experience and training in HR management. Therefore, knowledge and understanding form a basis for your new venture. While you might have a secure foundation to work from, you need to understand how to stay on top of changes, managing clients through these changes too. When you worked in a large company, you would have had the organisation's structure to help with training, with regular opportunities to refresh your knowledge and understanding. You will have to manage this for yourself now.
To avoid complacency, which could damage your clients and ruin your reputation as a freelancer, you need to set up practices to keep you on top of changes. To do this, you need to be proactive and continue to read industry journals day in and day out. Your job as a consultant is to anticipate the changes that will impact your clients and help shape their internal policies and procedures to account for these changes. You can create a checklist of laws that will allow you to regularly audit compliance issues. Setting these up at the start of your business will save you many headaches down the road.
If you were working in a large company, you would likely be part of a team of professionals. You would be able to assign policies to individuals who would take ownership and promote responsibility. As you are a freelancer working outside the company, you need to work alongside the company leaders to assign this responsibility in-house and set up the lines of communication with you. You are not on the ground to monitor the application of the policies and procedures, so you need buy-in and clear communication channels to ensure your responsibilities are met.
You also need to take responsibility for your learning and set aside training days for your updated education. Attending webinars, conferences and networking events will help keep you tuned into the changing landscape of HR law and other human resources issues.
Finally, when setting up relationships with new clients at the start of your business, you need to clarify that a cost/ benefit analysis will not work when considering issues of compliance. It is better to invest the money required upfront than face the penalties and fines the business could incur. When a company falls foul of HR law, it is massively damaging to its image, as it will be to your ability to build your freelance business.
While there are all sorts of laws you need to address when setting up a business, such as registering your company and purchasing the appropriate insurances, HR professionals face steeper challenges. While you are not expected to be a legal expert on the level of a solicitor or barrister, you are expected to know enough to pose questions and avoid challenges.
Being on top of your game from the start will help you win clients and gain their trust. Keeping up-to-date on the changes as you practice will prevent you from making mistakes, which could cost you too. Obviously, you will have liability insurance at these times, but why risk your fledgling freelance services reputation on an error.
About the author
Colin Bates is the Director of Mackenzie and Dorman, a leading solicitors based in Belfast, Northern Ireland.