Human resources compliance is one of those irritating things that some organizations think they have to contend with just once in a while. You know, when you hear about a new rule, or a reporting requirement comes up—you check the box and call it good. On the other hand, sometimes you get a letter from a government entity (Department of Labor’s Wage and Hour division or OFCCP, anyone?) and all of a sudden that box-checking starts to look like it wasn’t nearly enough to get you ready to respond within the deadline when the regulator comes knocking.
You can just call your law department (or outside counsel), right? When you need them, your attorneys are a critical and very helpful resource, but their work comes at a cost, so it’s best to involve them in proactive planning you can use across your entire organization, not just in the heat of the moment when you are reacting to getting a specific audit scheduling letter. If you want to spend a lot of money for work you could have directed more carefully, out of a budget you didn’t allocate on the front end, you may be hard-pressed to justify that expense without any corresponding business success to celebrate.
On the other hand, proactively planning for the moment when you will be asked to justify your business practices and compliance with state and federal regulatory requirements is not only the most affordable way to go, but it’s also the best method for finding the intersection between compliance requirements and business success. Engaging in substantive review and planning for compliance means that YOU are the first one to spot any problems, and address them, before they get out of hand. It also ensures that whenever questions or complaints come up, you are ready to respond immediately and without your hair on fire!
In a really active year for regulatory changes, here are a few areas to watch out for:
1. Federal contractor paid sick leave
: This proposed rule, makes certain federal contractors subject to rules about how much sick leave employees are allowed to accumulate (and use). “We already have paid sick leave,” you say. Well, these rules might be a little different; (see the FAQ here
) how and when entitled employees are allowed to use the time is probably not the same as what you currently allow. The final rule is expected by September 30, 2016.
2. Compensation information added to the EEO-1 form
: Employers with more than 100 employees may have to provide information about pay ranges those employees fall into, if this proposed change is approved. How much will this change what resources you need to complete this annual report on your workforce (and what will it reveal about your company’s pay practices, if anything) is yet to be seen, but now would be a good time to begin planning. If approved, the changes would be effective in the 2017 EEO-1 reporting cycle (you can review the EEOC’s take on this proposed change here
3. Changes to the maximum salary allowed for the “white-collar” exemption from overtime status
: This proposed change has received a lot of attention lately, and with good reason. There are several industries, non-profit and retail especially, that will need to make substantial changes in salary levels, staffing numbers, and/or budget for overtime work, in order to comply with the new salary maximum, which is proposed at $50,440 for 2016. Check out the Department of Labor’s fact sheet
4. Affordable Care Act employer penalty provisions, a.k.a. “employer coverage mandate” go into effect for smaller companies in 2016
: Employers with more than 100 full-time or equivalent employees have already been subject to the requirements throughout 2015, but employers with 50-99 full-time or equivalent employees are now subject to penalty for failing to provide minimum coverage that is affordable and provides minimum value in 2016. The Society for Human Resource Management (SHRM) has more information on penalties for non-compliance here
. All employers with 50 or more full-time or equivalent employees are subject to the reporting requirements. Luckily, the IRS has delayed reporting deadlines, but not for long. The new deadlines
are May 31st for those not filing electronically, and June 30th for those that are. Psst-if you haven’t even thought of this requirement yet, you already missed the March 31st deadline for providing forms 1095-B and C to individual employees, so you may want to check it out as soon as possible!
Consider these compliance concerns, seek advice from your attorneys, and take the time to operationalize their advice to fit your HR department and your business, to maximize legal compliance AND success!
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