How to Handle an Employee Complaint When You Don’t Have an HR Department
An employee just pulled you aside, or sent you a message, or knocked on your door with a heavy feeling you saw all over their face. They have a complaint. Maybe it’s about a coworker. Maybe it’s about a manager. Maybe in involves something that makes your stomach drop a bit. If you don’t have an HR department, this moment can feel paralyzing. You care about doing the right thing, but you’re not sure exactly what that is. You don’t want to make it worse or say the wrong thing and somewhere in the back of your mind, you’re aware that how you handle the next 48 hours really matters.
The good news: you can handle this well, even without an HR department. Here’s a clear, step-by-step guide for navigating an employee complaint from that first conversation all the way through resolution:
One legal note worth keeping in mind: under Federal law, employers can be held liable for harassment or discrimination they knew or should have known about and failed to address. Being a small business doesn’t exempt you from this. This post is meant to be helpful and informative, but if you’re dealing with something serious, consulting an HR professional (like me!) or an employment attorney is always the right call.
What Not to Do
Before we get into the steps, a few instincts to resist. These are the most common mistakes business owners make in the first moments after getting a complaint, and they can create bigger problems for you down the road.
Don’t minimize. Even if the situation seems minor to you, the employee came forward, which took courage. Dismissing it early shuts down trust and may discourage others from raising legitimate concerns themselves.
Don’t promise confidentiality you can’t keep. It’s so tempting to say “this stays between us”, but depending on what the complaint involves, you may be legally (or ethically) required to act on it, which might involve bringing others into the loop. Instead, say you keep it “as private as possible”.
Don’t confront the person being complained about before you have a plan. This is almost always going to make things worse.
Don’t discuss it with other employees unless it is completely necessary. Word travels fast in a small business, and gossip can turn a manageable situation into a morale crisis.
Don’t delay. Inaction is a decision, and often it sends the message that you don’t take the complaint seriously.
Step 1: Receive the Complaint Properly
Your first conversation sets the tone for everything that follows. The goal isn’t to investigate just yet, it’s to make the employee feel heard, get the basic facts, and explain what happens next.
Find a private space. Don’t have this conversation in an open office, near an employee traffic zone, or anywhere else others might overhear.
Listen without interrupting. Let them tell you what happened in their own words before you ask questions.
Take notes. Write down what is being said, not your interpretation of it. The specific words and details matter.
Mirror the complaint. Repeat back to them what you heard, use their words as much as possible. This will ensure alignment.
Thank them for coming forward. Regardless of what the complaint is about, acknowledge that it took effort to bring it to you.
Be honest about next steps. Tell them you’re going to look into it, that you’ll keep things as private as you can, and that you’ll follow up with them. Let them know when then can expect communication from you (and stick to it).
Script suggestion: “I’m glad you felt comfortable bringing this to me. I want to make sure I understand what happened and that I handle it the right way. Can I take some notes while we talk? And just so you know, I can’t promise complete confidentiality, but I’ll keep this as private as I possibly can.”
Step 2: Start Documenting Right Away
As soon as the conversation ends, write up a record while the details are fresh. This isn’t about building a legal case, but having an accurate account you can refer back to, especially if the situation develops further. I can’t tell you how many times I’ve had a manager come to me with an issue that is new to HR, only to find out that this manager has been dealing with it for weeks without a single note taken. Without good documentation, your company and the employee are vulnerable and the time to resolution will be longer than ideal. Even if an employee comes to you with an issue that seems small, documentation never hurts. Maybe you never use it, that’s the best case scenario. However, if you do need it, you’ll be so glad to took the time to do it.
Your documentation should include:
The date/time you received the complaint.
The name of the person who came forward.
A summary of what they reported, in their words as closely as you can recall.
Any names of people involved or mentioned as witnesses.
Any relevant context (prior incidents, related conversations, documentation they shared with you).
Store this somewhere secure, not in any shared document cloud or your general email inbox. A locked file cabinet or password-protected digital folder works. The privacy of everyone involved depends on this.
Step 3: Assess What You’re Dealing With
Not all complaints require the same response. Before you do anything else, take a breath and honestly assess the situation:
Is there any immediate safety concern (physical or emotional)? If anyone is at risk, act today. Consider whether parties need to be separated.
Does it involve harassment or discrimination based on a protected characteristic? Race, sex, age, disability, religion, national origin, and others are protected under Federal law. These complaints carry higher legal stakes an may require much more formal handling.
Is it an interpersonal conflict that doesn’t involve protected characteristics? Still very important, but a different process. These situations will have a little bit more flexibility in how you respond
Your assessment here shapes your next steps. When in doubt about severity, treat it seriously. The cost of over-responding to a complaint is much lower than the cost of under-responding.
Step 4: Conduct a Basic Investigation
You don’t need to be an investigator to do this well. You need to be fair, consistent, and thorough. The goal is to understand what most likely happened, not to prove guilt or protect the business at the expense of the truth.
Interview the person who came forward. Give them space to tell their full story. Ask clarifying questions to make sure you understand the specifics: what happened? when? where? were others present? has this happened before? This is your chance to clarify anything you or the employee may have missed in the initial conversation now that you’ve both had time to process.
Interview the person the complaint is about. Do this separately, after you’ve documented the complaint well. Don’t share what the complaintant told you work for word, but give the person a fair opportunity to share their perspective. Ask the same kinds of questions: what happened from their point of view? was anyone else present?
Talk to any witnesses. If others were present or have relevant information, speak with them individually and privately. keep your questions open-ended and fact-finding.
Review relevant documentation. Emails, texts, scheduling records, prior disciplinary records: anything that helps you understand the timeline and context. Don’t go digging through things that aren’t relevant, but don’t avoid documentation that might be uncomfortable.
Take notes throughout every conversation and be consistent in your approach. Ask roughly the same questions of each person. This matters if the situation is reviewed later. If the idea of conducting this investigation is intimidating for you, fill out the contact form on my website and I’ll send you an Investigation Question Template based on what you’re dealing with.
Step 5: Take Action
After gathering information, you need to make a judgement call: based on everything you’ve heard and reviewed, what most likely happened? You won’t always have a confession of wrongdoing or some sort of ironclad proof, but you need a reasonable conclusion based on the available evidence. From there, determine what action is appropriate. The response should fit the severity of the situation. Your action might include:
A coaching conversation or verbal warning for less serious issues
A written warning with documented expectations moving forward
Mediation between the parties if the conflict is interpersonal
Policy updates if the complaint revealed a gap in how things are communicated
Termination if the conduct is serious enough and the evidence supports it
Whatever action you take, document it. Write down your conclusion, the reasoning behind it, and the specific action taken. Follow up with the person who made the complaint. They don’t need to know every detail of what happened, but they should know that you took it seriously and that something was done.
Step 6: Watch for Retaliation
This step is easy to overlook, but it’s important. Retaliation (treating someone negatively because they made a complaint) is illegal. This is one of the most common ways a handled complaint turns into a lawsuit. After you’ve resolved the situation, keep an eye on things:
Is the person who came forward being excluded, passed over, or treated differently?
Are there any changes in schedule, assignments, or treatment that can’t be explained by legitimate business reasons?
Has the dynamic between parties shifted in ways that concern you?
If you see signs of retaliation, address them immediately. The same seriousness you applied to the original complaint applies here.
When to Call for Help
Some complaints are beyond what you can handle alone. I would advise that you reach out to an attorney or HR professional if:
The complaint involves sexual harassment or discrimination based on an protected class
The person being complained about is in a leadership role
The complaint mentions an attorney or the possibility of legal action
Your investigation is turning up more complexity than you expected
You’re unsure what action to take and the stakes feel high
Getting outside guidance isn’t a sign of weakness, it’s a sign that you’re taking the situation seriously and protecting everyone involved (including yourself). If you’re dealing with a complaint today and not sure what to do next, I’m here and happy to talk through it with you. Just hit that “Book Now” button at the top of the page and let’s tackle it together. I’ll do my best to not only help you through this specific complaint, but also build a better system going forward for you and your employees.