Texas businesses facing rapid growth are increasingly turning to fractional human resources services to manage compliance challenges and reduce operational risks. According to Neil Katz, CEO of Exceptional HR Solutions, business owners often spend 10–50% of their time on people-related issues, diverting attention from core operations that drive expansion.
Fractional HR services provide companies with expert support in hiring, onboarding, investigations, compensation, and compliance without the expense of maintaining a full-time department. Katz, who has over 25 years of HR experience, emphasized this approach during a recent interview on The Building Texas Show. "Hire experts in their disciplines," Katz advised. "Get back to what you love because you probably don't love dealing with this stuff anyway."
A critical area of concern for Texas businesses is employee classification. Katz warned that misclassifying workers as 1099 contractors instead of W-2 employees creates significant legal and financial risks. "People don't get to choose if they want to be a contractor. The law defines what a contractor is and what is not," Katz explained. He noted that workers using company email, equipment, or receiving majority income from one employer should typically be classified as employees.
The fractional HR model extends beyond private businesses to public entities. Exceptional HR Solutions serves municipalities like the City of Bonham, providing professional HR expertise without the overhead of a full-time HR director. This approach allows smaller cities and businesses to access specialized knowledge that might otherwise be financially prohibitive.
Katz's full interview discussing these critical HR issues is available on The Building Texas Show's YouTube Channel, where he addresses the specific risks of employee misclassification. Businesses seeking HR support can find additional information through the company's website at ExceptionalHRSolutions.com.
As Texas continues its economic expansion, the demand for specialized HR services grows correspondingly. Fractional HR solutions represent a strategic response to the complex regulatory environment facing businesses, particularly regarding employee classification laws that carry substantial penalties for violations. This approach enables companies to focus resources on growth while ensuring compliance with employment regulations that protect both workers and organizations.
