Now that summer vacation is only a
memory, “getting back to business” is the primary objective. As part of this,
every owner, CEO, CFO, and HR professional should assess their organization’s
compliance with workplace laws, in order to avoid “landmines” that can severely
impact the positive bottom line you worked so hard to achieve. The best
approach to reducing the exposure to expensive audits and lawsuits is to
establish sound business policies and procedures and proactively address some
critical areas. Now is the time to review these areas and put compliance
self-audit into the budget!
1. Pay Practices and Pay
Equity: The number of organizations exposed to wage and hour audits
by the Department of Labor (DOL) increases each year, and the results
inevitably are expensive settlements or even more expensive litigation. Last
year, the Wage & Hour Division of the DOL recovered nearly a quarter of a billion
dollars in back wages. These cases included employees misclassified as
“independent contractors” or employees who were improperly classified as
“exempt” and not paid the overtime they were entitled to. Additionally, paying
employees “off the clock,” or not designating all time worked as paid time
(deducting for breaks not taken, allowing employees to work while not recording
the time, designating certain activities as non-working time incorrectly) often
results in substantial unpaid wages and overtime being awarded. A recent survey
revealed that 18% of cases filed in local federal courts have been wage and
hour cases.
Federal contractors and
subcontractors have even greater obligations. Since the OFCCP heads up the
Equal Pay Task Force for the White House, Director Shiu continues to
aggressively investigate pay practices and pay equity during OFCCP audits. A
recently signed Presidential Memorandum will continue to keep this in the
forefront as, when finalized, it will require a report to be submitted annually
to the OFCCP to include total W-2 Wage and Tax Statement earnings and total
work hours for the previous calendar year for all employees included in the
contractor’s most recently filed EEO-1 report, whether or not the employees
were still employed on December 31.
Best Practice: Reviewing job descriptions, the classifications of your
workforce, and your pay practices should be on the top of the “To Do” planning
list this fall. Be aware that you must be prepared to allocate funds should adjustments
need to be made as a result of this review.
2. EEOC (and Human Rights)
Charges and the Need for Training of Managers and Supervisors: Last
year, the U.S. Equal Employment Opportunity Commission (EEOC) obtained the
highest monetary recovery in the agency’s history ($372.1 million). Few organizations
realize that charges of “retaliation” are the most frequently cited category of
discrimination. Race discrimination, sex discrimination (including sexual
harassment), pregnancy discrimination, and disability discrimination made up
the rest of the top five charges for which employers paid out large amounts in
settlements. As most HR Professionals know, these charges are often a result of
a manager or supervisor saying or doing the wrong thing due to his / her lack
of knowledge of the labor laws or not following organizational policies and
procedures.
Best Practice: In today’s diverse workplace, equipping management with the
training and information needed to effectively deal with people from different
backgrounds is critical. Providing training for managers and supervisors is one
of the best investments an organization can make. At minimum, every organization
should schedule Anti-Harassment / Discrimination / Retaliation training for
their managers and supervisors on a regular basis.
3. Updated Employee
Handbook: Employee lawsuits have risen 400% in the past 20 years, to
6.5 claims per 1,000 employees annually. Employers need to implement guidelines
for the prevention of discrimination in the workplace. A well-written handbook
and consistently applied policies & procedures are critical to maintaining
good morale, ensuring that employees understand their responsibilities, and
providing clear guidance to all levels of management. Workplace laws keep
changing; organizations need to be aware of the changes, make modifications,
and keep their policies & procedures current.
Every organization should be updating
its policies to address vibrant topics such as tele-commuting, social media,
use of organization issued equipment, and recent changes in FMLA.
Best Practice: Review your handbook, policies and procedures with a
workplace specialist to ensure that you are addressing current federal and
state regulations. Organizations should also be reviewing the need to translate
policies in the native language of their workforce. Be sure that you have a
signed receipt from every employee that acknowledges receipt of the organization’s
handbook.
4. Form I-9: PMP
has found that most employers are confused as to how and when to correctly
complete Form I-9. Must the employee complete Section 1 on the first day of
work? (YES!) Is the employer allowed to ask the employee for specific
documents? (NO!) Should the I-9 be kept in the employee’s file? (NO!) It is the
lack of knowledge of regulations that can cause organizations to receive fines
of $1,100 per form and up to $16,000 per worker for incorrect or missing forms.
The U.S. Immigration and Customs Enforcement (ICE) continues to escalate its
worksite enforcement and has announced that it will implement another round of
I-9 audits. Although organizations are allowed to do self-audits and correct
errors, this should only be done by a person who is familiar with the current
regulations.
Best Practice: Contact a knowledgeable HR Professional to schedule a
review of your organization’s I-9 forms.
By being proactive, an organization can
greatly diminish its exposure to expensive litigation. Budgeting time and money
to address these four areas of concern now is the smartest way to avoid a
large, negative impact on an organization’s bottom line.
**********
This article is intended for general
information only and should not be construed as legal advice.
For more
information on labor relations please visit us at:
About Portnoy, Messinger, Pearl and
Associates:
Portnoy, Messinger, Pearl and Associates, Inc. (PMP),
the oldest labor relations consulting firm representing management on Long
Island, was founded in 1964 by former union organizer and worker’s rights
advocate, Murray W. Portnoy. Initially, Murray offered human resource
consulting and union contract negotiating services to a handful of clients.
Today PMP has a full staff of experienced and talented human resources and
labor relations consultants, labor and employment attorneys, and administrative
personnel. Murray Portnoy's values and vision remain at the core of PMP's
mission and principles.
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