As Texas continues to experience significant economic growth, many small to medium-sized businesses face challenges in managing human resources, compliance, and employee-related risks. In a recent interview on The Building Texas Show, Neil Katz, CEO of Exceptional HR Solutions, explained how fractional HR services provide expert support without the cost of a full-time department.
With over 25 years of HR experience, Katz emphasizes that business owners often spend 10–50% of their time on people-related issues, diverting focus from core operations. Fractional HR services help companies navigate hiring, onboarding, investigations, compensation, and compliance, allowing leaders to focus on growth. "Hire experts in their disciplines," Katz advises. "Get back to what you love because you probably don’t love dealing with this stuff anyway."
A major area of risk for Texas businesses is the misclassification of employees as 1099 contractors. Katz warns that if a worker uses company email, equipment, or receives majority income from one employer, they should likely be classified as a W-2 employee. "People don’t get to choose if they want to be a contractor. The law defines what a contractor is and what is not. If you’re not sure, the rule of thumb is to hire them as an employee."
Exceptional HR Solutions also supports municipalities, such as the City of Bonham, providing expertise without the overhead of a full-time HR director. Katz highlights that fractional services are ideal for small cities and businesses that need professional HR support but lack the budget for a dedicated department. Watch the full interview with Neil Katz on The Building Texas Show's YouTube channel: 1099 vs W-2: The Mistake That Could Sink Your Small Business.
Businesses and municipalities seeking HR support can visit ExceptionalHRSolutions.com or connect with Neil Katz on LinkedIn.
