creating legally compliant employment practices

The Top 15 Legal Employment Issues Affecting Your Business

 

Many employers are unaware of the laws and regulations governing employment practices. As a result, they may inadvertently violate the law and expose themselves to liability. To avoid this, employers should take the time to familiarize themselves with the relevant laws and ensure that their employment practices are compliant.

There are a number of laws that govern employment practices, including those relating to discrimination, harassment, and wage and hour requirements. Employers should make sure that they are familiar with these laws and that their policies and procedures are in compliance. Additionally, employers should provide training to their employees on these laws so that they can be aware of their rights and responsibilities.

By taking the time to create legally compliant employment practices, employers can protect themselves from liability and ensure that their employees are treated fairly.

Which Laws Apply to Me?

The laws and regulations that apply to each organization are based primarily on three things:

  • The number of employees
  • The states in which you conduct business
  • Whether or not you work business with the government

Even organizations with one employee must comply with over 13 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, Pregnancy Discrimination Act, and Americans with Disabilities Act. 20 employees, the Age Discrimination in Employment Act (ADEA) and Consolidated Omnibus Budget Reconciliation Act (COBRA) apply. At 50 employees, the Family & Medical Leave Act comes into play, and at 100 employees, everything else is added, like EEO-1 Reporting requirements and Worker Adjustment & Retraining Notification Act (WARN).

State Laws

Each state can establish its own laws and regulations covering all employment practices, as long as they at least follow Federal laws. As a result, you will typically find differences in practice details for such things as breaks, final paychecks, and other employment practices.

Government Contract

The size of the government contract and the number of employees determines whether or not you must comply with such laws and requirements as affirmative action or VETS 100 Reporting. Generally, anyone with 50 or more employees and annual government contracts/business over $50,000 will need to have an affirmative action plan and comply with other federal contractor laws, rules, and regulations.

Where Do Laws Come From?

The laws come from the Constitution (State and Federal), Statutes (laws passed by legislatures), Common laws (prior court decisions), Administrative Regulations/Rulings and Court Orders.

Law Enforcers

The following organizations are picking up their compliance efforts: IRS, Department of Labor, OSHA, OFCCP, INS, EEOC, National Labor Relations Board, SS Administration and Federal and State Court.

How Do I Comply?

The following are suggestions to help you with employment compliance and your overall work environment:

Know Which Laws Apply – Someone needs to be aware of the laws, rules and regulations that apply to your organization, keep up on changes, and actively implement the steps necessary to ensure compliance.

Align Practices to Comply – Once familiar with the laws that apply, evaluate current practices and make needed changes to follow the requirements.

Establish & Follow Consistent Practices, Procedures, and Guidelines – One of the best techniques to drive and communicate consistency is to create good employment practices in an employee handbook. Equally important is to provide leaders with guidelines on how to handle essential employment practices for things like hiring, interviewing, orientations, training, performance management, appraisals, layoffs, corrective actions, pay, terminations, and discharges. Again, this can be accomplished in a leader handbook or training program.

Train Supervisors – What supervisors say and do will either help or hinder your legal compliance and best practices. Leaders should be trained in employment laws that apply to them, employment practices (described in 3 above), monitoring risky situations, and responding to employee complaints.

Base Employment Decisions on Job-Related Factors – Every employment decision related to hiring, appraisal, corrective action, training, discharges, pay, etc. must be based solely on job-related reasons/information.  Any implication that decisions are based on sex, age, national origin, religion, color, or other protected category is a recipe for a lawsuit and a hefty fine.

Keep Good Documentation – Organizations and leaders who document employment decisions and actions are best prepared to defend employment practices and make informed decisions. Keep files on each employee recording key performance measures and feedback (constructive & praise). Individuals involved in hiring, pay, disciplinary action, and termination decisions should also document information needed to demonstrate that decisions were job-related and supported by facts, not.

Establish a Grievance and Complaint Process –  If employees have a place to complain and are given fair consideration, the need to seek outside assistance from attorneys, or compliance organizations is lessened. Equally important to having a process is to make sure that all complaints are taken seriously, investigated, and acted upon.

Monitor the Work Environment – Organizations and leaders need to monitor the work environment and keep in touch with employees to be aware of unsafe, legally risky practices (e.g., harassment). Once aware of risky practices, supervisors must take the necessary steps to eliminate them. Maintain a safe, hostile-free workplace by communicating expectations, training employees and monitoring to ensure compliance.

Seriously Evaluate Disciplinary Actions/Discharges – Perhaps the two most risky employment practices are corrective actions and discharges. These are the times when tempers can flare, and individuals can say and do things that escalate to possible legal actions. It is a good practice not to allow anyone to fire on the spot. All employment violations and performance issues should be thoroughly reviewed before an action is taken in anger or spite. Get all sides of the story, know the laws that apply and make an informed decision.

Review Current Practices With an Outside Professional – It is a good business practice to utilize an outside organization, like HR Service, to review current practices, identify risks and help make needed.

Align Yourself with Experts – There are so many possible areas where things can go wrong; it is imperative to either have an expert on-site or align yourself with someone who can assist with challenging employee issues, risks and compliance.

Do the Right Thing – If you think about it, most laws, rules and regulations are not only required but also good practices that treat people with respect and dignity. For example, eliminate workplace bias, discrimination and prejudice and promote a positive work environment that rewards performance and results, not skin color, age, or gender.

Building Compliant Employee Files – This would include items designated as confidential within an employee file or kept in a separate file and not shared outside of HR, payroll, and benefits administration, including benefits, PHI, drug, background, and leave data, as noted above.

Access to Employee files – Although employee files and their content are the property of the company, many states have laws requiring the employer to allow the employee a right to view particular essential employment and payroll documents contained in their employee file within a reasonable amount of time upon request. Such materials may include application, payroll authorization and tax forms, benefit enrollment forms, discipline and performance reviews, attendance records, garnishment, and leave documents. Employers should review state-specific employment record laws when setting up their employee file access policy. Access by other employees should be limited to the information necessary and applicable to their position and function within the business and only when a legitimate business needs access. For example, payroll personnel should have access to payroll-specific items like deduction authorizations, garnishments, pay data, and hours and days of work. On the other hand, supervisors and managers should only have access to performance-related documents. The benefits administrator should access items specific to benefits like enrollment or waiver forms and beneficiary forms.

Records Retention – Identify employee documents, record retention requirements, and create a policy to ensure compliance. There are specific retention requirements for those items stored in an employee file. For example, upon the termination of employment, I-9s are required to be kept for at least three years from the date of hire or one year from the date of termination, whichever is longer. In addition, electronic documents should be retained as if they were paper documents. For example, suppose an employee has sufficient reason to keep an email message. In that case, the message should either be printed in hard copy and kept in the appropriate file or moved to an “archive” computer file folder. Computer backup and recovery methods should be tested regularly.

Also, the company should designate an individual to be responsible for the ongoing process of identifying which records have met the required retention period and then overseeing their destruction.

Employee File System – Whichever employee file system employers choose to implement, they must ensure it is consistent and organized and protects confidential documents.

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