Are You Legally Compliant?
Many organizations are sued or fined millions of dollars each year for unknowingly violating one of the many employment laws governing employees, employment decisions, and benefits. The list of possible offences is large, with numerous complex laws, rules, and regulations constantly changing. In this article, we provide techniques to help you be legally compliant, avoid fines/penalties, limit attorney fees and keep you out of the courts.
Laws and Regulations
The laws and regulations that apply to each organization are based primarily on three things:
1) The number of employees.
2) The states in which you conduct business; or
3) Whether or not you conduct business with the government.
Even organizations with only one employee must comply with over 14 federal laws and almost as many state laws and regulations. When companies hit 15 employees, they must comply with Title VII of the Civil Rights Act (CRA), Pregnancy Discrimination Act (PDA), Americans with Disabilities Act (ADA) and the related ADA Amendments Act (ADAAA), Genetic Information Nondiscrimination Act (GINA), and Fair Credit Reporting Act (FCRA). At 20 employees, Age Discrimination in Employment Act (ADEA) and Consolidated Omnibus Budget Reconciliation Act (COBRA) apply. At 50 employees, the Family & Medical Leave Act (FMLA) comes into play, and at 100 employees EEO-1 reporting requirements and Worker Adjustment & Retraining Notification Act (WARN) also apply.
Each state can establish their own laws and regulations covering employment practices, as long as they at least match federal laws. You will typically find differences in state practice for such things as breaks, final paychecks, new hire reporting, and other employment practices.
The size of government contract and the number of employees determines whether you must comply with such laws and requirements as Affirmative Action or VETS Reporting. Generally, anyone with 50 or more employees and annual government contracts more than $50,000 will need an affirmative
action plan and need to comply with other federal contractor laws, rules, and regulations.
The following organizations are increasing the number of compliance audits and are assigning large fines for non-compliance: IRS, DOL, ERISA, OSHA, OFCCP, INS, EEOC, NLRB, SSA, and federal and state courts.
Legally Compliant Techniques
These techniques will help you create legally compliant employment practices & work environment:
Know Which Laws Apply – Be aware of the laws, rules, and regulations that apply to your organization. Keep up on changes, and actively implement the steps needed to ensure compliance. HR Service, Inc. clients receive a monthly legal update along with due date reminders, giving them what they need to know and do, when it’s needed. Read and follow these important updates and actions.
Review Current Practices – Once familiar with the laws that apply, evaluate current practices to identify risks, inconsistencies, and challenges. A useful technique is to hire an independent third party who specializes in employment laws and have them conduct a compliance audit.
Align Practices to Comply – Proactively take the needed steps to eliminate risk, follow requirements, and build effective people practices, as well as overall HR infrastructure that ensure compliance. This may require new policies, changing existing practices, or training supervisors.
Establish & Follow Consistent Practices, Procedures and Guidelines – Be consistent in how employees are treated. One of the best techniques to drive and communicate consistency is to document good employment practices in an employee handbook. Equally important is to provide leaders with guidelines on how to handle important employment practices for things like interviewing, hiring, orientation, training, performance management, appraisals, corrective actions, pay, terminations and discharges. This can be accomplished in a leader handbook and leader training program.
Ken Spencer, CEO & President