The CheckPoint HR Blog

Keep calm and comply on: Preparing for HR change in the face of uncertainty

Posted by Denise Bauwens on Mon, May 1, 2017

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With a new administration come uncertainty, questions and concerns. Here's how to navigate those complexities and maintain compliance


The rapid shifts unfolding for employers this year are bringing concern, confusion and complexity to the human resources landscape. From policy changes to new litigation, these transformations greatly influence how employers and HR professionals approach all aspects of employee administration, talent acquisition and HR management. 

The chaos is constant. Just as organizations finish scrambling to prepare for a new regulation to take effect, it is halted, delayed or appealed - and the possibility of another ruling that could disrupt current business strategies is introduced.  Right when you think you know the direction an aspect of the industry is headed, something happens to give you pause or require a pivot in thinking and execution. 

While it's exhausting to monitor and manage, staying current with compliance requirements is critical - not just from a performance standpoint but from a legal one as well. When legislative changes occur - however minor or short-lived - employers must adjust their operations and methods to comply. Failure to do so can lead to reputation damage as well as costly fines and litigation.

Let's take a look at some of the major areas where changes are raising questions and concerns for HR professionals.

"In today's regulatory landscape, chaos and uncertainty is constant."

Overtime legislation
Last year, the Department of Labor was blocked from enforcing an overtime rule that would have increased the minimum salary threshold for overtime exemption from $23,660 a year to $47,476 a year. Until a federal judge blocked it, employers were forced to implement major changes in anticipation, including reclassifying workers and raising wages. It even ushered in the need to reconsider the way employee time and schedules are tracked and managed.

Many didn't expect the rule to be halted - and definitely not the day before it was supposed to take effect. Now, with a new administration in the Oval Office, there's a lot of talk that not only could the delay be extended, but it could lead to a new litigation all together.

Health care
One of the most significant issues affecting employers right now is health care, with many organizations wondering whether President Trump's administration and legislators will reach a decision that amends, repeals or replaces the Affordable Care Act - and what kind of impact it will have on employers.

Of course, employers still need to comply with the ACA reporting requirements. Companies with at least 50 full-time employees must complete and submit their reporting forms to the Internal Revenue of Service.

While employers must continue to comply with ACA reporting requirements,  it's impossible and unwise to not consider the relationship with their benefits broker and what kind of flexibility they will have in changing plans. For example, if the DOL's overtime rule had - or does - pass, many employers are going to have to reclassify workers and, in turn, adjust their reporting practices.

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Changes to the Affordable Care Act will likely impact employer reporting requirements.
Paid leave

Currently, the Family and Medical Leave Act mandates that companies with at least 50 workers give 12 weeks unpaid leave. However, more employers are starting to offer paid family leave as part of benefits and compensation plans to be more competitive to talent. According to HR Magazine, only 18 percent of U.S. organizations offer paid maternity leave and just 12 percent provide paid paternity leave.

Additionally, there are possible changes in sick leave that may occur. As Benefits Pro explained, the paid sick leave rule currently says that 56 hours can be used by employees for health needs - including caring for a family member's health. And many Americans, it seems, want this to stay how it is. Citing findings from a Pew Survey, the source said that 85 percent of employees are in favor of paid time off for critical illnesses and nearly 70 percent agree that the PTO should be given for individuals who have to care for a family member. 

Work authorization
Since President Trump took office, it's been clear that a large area of focus of his administration will be on immigration crackdown - which likely means a stronger emphasis on work authorization documentation and employment eligibility verification processes.

"The immigration crackdown highlights the importance of employment verification."

Employers must double down on efforts to ensure compliance - making sure they have the systems, documents and tools in place to adhere to Form I-9 and other paperwork for employee authorization identity and verification. Internal audits should be conducted on existing documentation. Additionally, it's recommended that organizations leverage technology that makes it easier to ensure compliance is maintained, such as E-Verify systems. 

Properly verifying - and reverifying - the work authorization of employees is essential to avoid penalties and, in some cases, jail time. And although E-Verify isn't required at a federal level, that could certainly change.

On the other hand, wrongfully or unlawfully discriminating against resident immigrations authorized to work in the U.S. can lead to anti-discrimination claims and lawsuits. Therefore, it is essential for HR managers to fully understand their obligations under the law - or work with a compliance partner who does. 

Equal pay and opportunity
Aside from avoiding discriminatory practices against workers based on nationality or origin, it's becoming increasingly important for employers to ensure their recruitment and hiring processes don't violate the age and gender protections of anti-discrimination regulations. 

The Wall Street Journal recently reported that PricewaterhouseCoopers was sued over its hiring practices in a class action lawsuit regarding age-discrimination laws, which the article author explained is "part of an emerging wave of litigation that is testing the boundaries of age-discrimination liability and casting a legal cloud over college recruitment programs."

The two plaintiffs allege that PwC intentionally screens out applicants above the age of 40, putting the company in violation of the federal Age Discrimination in Employment Act.

Last year, Massachusetts became the first state to pass a law prohibiting employers from inquiring about a candidate's salary history - an effort to help prevent wage gaps due to unfair biases. 

Even when legislative changes are being made on a state rather than federal level, it's important for employers to stay informed, as the shifts can indicate changes that may be coming their way.

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Violating anti-discrimination laws can lead to costly penalties.

Complying with change and uncertainty
Maintaining compliance is always a pressing matter for HR professionals and organizations. And the above are just a few examples of aspects involved in the legislative limbo. There's a lot to keep track of - and modification to regulations can put in motion a whole series of complex changes to make and questions to address.

What changes is my business going to go through? How are my employee benefit plans going to be affected? How can I prepare for all these different contingencies? Answers to these questions vary and are far from simple. 

But with more scrutiny expected from nearly every federal agency - from the U.S. Department of Labor and Equal Employment Opportunity Commission to the National Labor Relations Board and U.S. Department of Justice - it's clear the biggest issue that needs to be addressed is: How can I maintain compliance in this expansive and ever-changing environment?

The first steps are to have a plan of action, stay informed on what policy changes may be coming, and familiarize yourself with the different ways in which they could affect you. Many times, once these laws are announced, employers must act quickly. However, as we've already seen, this is far easier said than done. Most companies don't have the time to spend on this, even if they wanted to. 

This is why, above all else, the uncertainty, complexity and confusion involved in today's regulatory and policy landscape underscores the importance of working with a partner who can provide the expertise, support and technology to align HR processes with business strategy and ensure compliance, no matter what - or when - changes unfold.

Being forced to employ a wait-and-see approach to employee and HR administration can be frustrating. But it becomes a lot easier to handle when you know your organization is built on and backed by a strong yet flexible foundation, including a knowledgeable compliance partner and an HR solution that gives you the agile, scalable and accessible support you need.  

 

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The information contained in this blog is for informational purposes only and should not be construed as legal advice. If you need legal advice, please contact an attorney. 

Topics: employee benefits, Affordable Care Act, human resources, onboarding