Only One Employee - HR for Tiny Teams
By VICKY BROWN
What to Do When It’s Just You and One Employee
Hiring your first employee is more than just a line on your to-do list — it’s a moment. A milestone. A shift in how you operate and how you lead. One minute, you’re a solo act. The next, you’re responsible for someone else’s livelihood.
If you’re in this moment right now — figuring out what it means to be someone’s boss, setting up payroll, wondering what HR even looks like for a team of two — you’re not alone. And you’re not crazy for feeling a little overwhelmed.
Let’s walk through what matters most when it’s just you and one employee, and how to build a simple, solid foundation that protects your business and sets your team up for success.
HR Laws Still Apply — Even to Tiny Teams
You might think, “It’s just me and one person — do I really need to worry about HR rules?” The answer is yes. The moment you hire someone, you’re subject to employment laws. That includes proper classification (exempt or non-exempt), wage and hour regulations, anti-discrimination laws, and required documentation.
This doesn’t mean you need to operate like a Fortune 500 company. But it does mean you need to be intentional and compliant from the start. A mistake here — even a small one — can snowball into a bigger issue down the road. Fortunately, a few proactive steps can keep you out of trouble.
Start with the Basics: Clear, Written Documentation
The easiest way to avoid misunderstandings is to put things in writing. Start with a simple offer letter. Spell out the job title, responsibilities, pay rate, schedule, and employment status (full-time or part-time, exempt or non-exempt). Even if you talked about all this over coffee, documenting it makes it real — and defensible.
Next, create a mini employee handbook. Think 5–10 pages, not 50. It should answer practical questions like:
- What are our working hours?
- How do time off and holidays work?
- What’s the expectation around communication, especially if you’re remote?
- How do we handle confidential info?
This isn’t about adding red tape. It’s about giving your employee clarity — and giving yourself a reference point if issues come up.
Finally, create and maintain a clean employee file. Include the signed offer letter, W-4, I-9 (stored separately), and any policy acknowledgments. Having this ready protects you if something ever goes sideways.
Payroll: Do It Right from Day One
There’s no casual way to pay someone legally. A Venmo here and there won’t cut it — not with the IRS or your state tax agency.
Set up proper payroll through a reliable service. Even if it’s just one employee, you’re still on the hook for things like:
- Tax withholdings
- Federal and state filings
- Year-end forms (like W-2s)
- Recordkeeping
And don’t forget: you’re probably required to carry workers’ comp insurance, even with just one employee. Depending on your location, disability insurance might be required too.
This might sound like a lot, but the right payroll provider or HR consultant can do the heavy lifting for you. Many specialize in micro-businesses, and the cost is budget friendly — a worthy investment to stay legal and stress-free.
The Most Underrated HR Tool? Communication.
When it’s just you and one employee, communication can feel like a given. You’re working side-by-side, maybe even texting throughout the day. But don’t let that replace real check-ins.
Set aside time once a week — even just 15 minutes — to step back from the daily grind. Use that time to ask:
- What’s working well?
- What’s unclear or frustrating?
- What’s coming up next?
These regular conversations keep you aligned and prevent assumptions from piling up. Silence leads to misunderstandings. Intentional communication builds trust.
“… Even if you talked about all this over coffee, documenting it makes it real — and defensible.“
Feedback: Keep It Human, Keep It Consistent
You don’t need a fancy performance review process — but you do need to offer feedback. Celebrate the wins. Address issues early. Don’t wait for things to blow up before you speak up.
If you ever have a serious conversation about performance, jot down a quick summary for your records. It can be an email or a note in a shared doc. It doesn’t have to be formal — it just needs to exist.
And if termination ever becomes necessary, slow down. Document concerns. Prepare what you’ll say. Even in at-will states, you want to be thoughtful, respectful, and prepared.
Plan Ahead for Growth (Even if You’re Not Ready Yet)
Think you might add a second employee someday? Start laying the groundwork now.
- Define roles and responsibilities clearly.
- Build an onboarding checklist.
- Save copies of templates and documents you’ve already used.
Every time you create a mini-system — for payroll, communication, documentation — you’re making future growth easier. You won’t have to reinvent the wheel every time.
And if you’re thinking long-term, you might want to look into Employment Practices Liability Insurance (EPLI). It’s an extra layer of protection if you ever face claims like wrongful termination or discrimination. Hopefully you’ll never need it — but if you do, you’ll be glad it’s there.
Whether you’re an entrepreneur jumping into a leadership role, a seasoned business pro with new HR responsibilities, or just starting your HR career – we’ve got the right path to guide you through your HR hurdles.
Check out the Leaders Journey Experience. This online education platform holds the LJE Masterclass, HR SimpleStart Academy and HR FuturePro Academy.
Not sure where to start – take the quiz!
HR Doesn’t Have to Be a Headache
Here’s the real secret: HR at this stage isn’t about policies. It’s about relationships.
Clarity. Consistency. Communication. That’s what builds a great foundation. That’s what helps your employee trust you, and what helps you lead with confidence.
And if you ever feel unsure or overwhelmed, don’t go it alone. Programs like HR SimpleStart are built for this exact moment — to help new employers build right-sized HR practices that grow with their business.
Ready to put the right systems in place?
We’re here to help. Reach out to learn more about how our tools and training support new leaders as they grow their first team — one employee at a time.