As the year comes to an end and a new year awaits, companies should conduct a self-audit of their business practices to assess where they are so they can better plan for where they want to be next year. One business area that should not be overlooked is human resources (HR) compliance. Employers need to comply with all employment-related federal, state, and local laws. The laws that are applicable to your company will depend on your number of employees and industry. Whether you are building a new company or have an established company, these are my recommendations of the Top 5 HR Compliance Topics.
1. Compliance Poster
2. I-9 Employment Verification
3. Wage & Hour Laws
4. EEOC
5. Employment Handbook
Compliance Poster
A basic employment item that all businesses should have on their internal bulletin board are employer obligations notices. These notices provide employees with information about their employment rights. In addition, the notices serve as a checklist for employers to verify they are fulfilling their mandatory requirements. This notice should be posted in an easily accessible area such as the breakroom, or near the employee lockers, and/or on the company intranet. The California Department of Industrial Relations website provides notices that are free to download. However, employers can be uncertain of which notices are applicable to them, and the state website can become an overload of information. Therefore, there is a simpler option to purchase a workplace poster from one of the many online vendors, such as the California Chamber of Commerce. These posters include the most common applicable laws. Make sure to select a California state-specific poster so it will address the state laws as well. If your business has additional laws not addressed in the poster, then download those notices from the state website. These notices should be reviewed and updated annually (if necessary).
I-9 Employment Verification
The I-9 Employment Verification Form is a federal requirement for all employers who hire an employee on payroll (W2). The I-9 verifies the identity and eligibility of a person’s ability to work in the United States. These forms are often ignored after an employee is hired, but they should not be. Periodically, employers need to audit the forms to look for expiration dates that would require the employer to re-obtain current documents from the employee and then re-verify employment eligibility. If you ever receive a visit from the U.S. Citizenship and Immigration Services (USCIS) or related agency, they will very likely want to review your I-9s. To learn more, the USCIS website has a free comprehensive handbook that can be downloaded.
Wage & Hour Laws
What and how a person is paid may seem like a simple task, but companies need to be conscientious about following the wage and hour laws as well. In some small companies where there is no dedicated HR person and accounting/finance or an office manager is processing payroll, there is still the responsibility to legally manage wage & hour activities, not just process the paychecks. The subtopics include minimum wage, overtime rules and pay, meals and rest breaks, and the classification as exempt from overtime pay or non-exempt status. Again, the California Department of Industrial Relations website is a great reference for these topics. Also, there are many resources available such as online articles, employment attorneys who provide educational webinars, and even your payroll administrator is likely to publish many resources.
EEOC
The U.S. Equal Employment Opportunity Commission (EEOC) is responsible for enforcing laws related to various categories of discrimination as it relates to employment. More specifically, the EEOC “is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person's race, color, religion, sex (including pregnancy, childbirth, or related conditions, gender identity, and sexual orientation), national origin, age (40 or older), disability or genetic information.” Companies need to understand their EEOC responsibilities. Beyond the definition of the law, it is important that businesses train their staff on these laws and operate their business accordingly. While this sounds very legal-heavy and can be intimidating, basically, follow the golden rule. Treat others as you expect to be treated, and expect the same from your employees. It sounds so simple, but obviously these laws have been enacted because people participate in discriminatory behaviors.
Employment Handbook
Finally, having an employment handbook is a best practice for all businesses. As a small business, you may not think you need an employment handbook yet, but it is not only a tool to document your business policies or the appliable employment laws, but it is also a common document that both the employee and employer can reference when various scenarios occur. For example, someone may need to take bereavement time off. How much time off does your company allow for an employee to grieve and handle personal matters? And is the time off paid or unpaid? This is only one of many different scenarios that can occur, where it would benefit all parties from having a clearly described written policy in an employment handbook. Companies can start with an off-the shelf template where blanks can be filled in for your business, or use software that helps to generate semi-customized handbooks, or work directly with an employment attorney to create a custom handbook. Whichever route you take to develop your handbook, make sure it undergoes legal review as laws can change and new laws are passed.
Beyond the Top 5
Beyond these top five topics, there are many other compliance-related human resources topics that a business should consider as they grow and become more established. Other topics include:
· Leave of Absences (CA paid sick leave, other applicable federal and state leave laws)
· Health & Safety (CalOSHA & OSHA laws, worker’s compensation, work injury procedures)
· Training (non-discrimination, anti-harassment, proper recruitment compliance)
· Benefits (ERISA, your benefits broker can help with this)
· Union-related compliance (if applicable)
Human resources compliance can be daunting, especially if your company does not have a knowledgeable HR person on staff. But it does not have to be. Start with these basics and then create a plan to understand and address the topics. There are many online resources available. Also, temporary contract HR professionals are great resources when a company is not ready to hire a full-time HR person. Companies local to the Tri-Valley and Tracy area can contact Kinnect Consulting for part-time contract HR help.
This blog includes advice from an HR professional that is not an attorney. If you are unsure of how to handle certain legal issues, always check with your legal counsel.