At its most basic level, HR for small businesses encompasses compliance with applicable labor laws, hiring and creating a channel for dealing with employee issues. If your business is growing, it can be good to include strategic planning as well. Benefits also fall under the HR umbrella.
Compliance and dealing with employee issues are probably the two most challenging areas for a small business. There are numerous federal, state and local labor laws that cover both these areas. Laws cover requirements such as how to store employee files, how to administer leaves of absence, when to pay overtime, requirements for classifying exempt and nonexempt employees, how long a meal break must be and more.