How HR Regulatory Compliance and Changing Employment Laws Impact Your Company
Conventional employment has changed dramatically over recent years, and HR regulatory compliance mandates are continually evolving. In a recent article published by Forbes Magazine (written by Bryan Robinson, PH.D.) experts said, “Remote is here to stay and will increase into 2023.” According to their projections, “25% of all professional jobs in North America will be remote by the end of 2022, and these remote opportunities will increase through 2023.” As a result, keeping up with the latest employment and regulatory compliance mandates will bring new challenges for business owners and HR Managers.
In addition to all of the regulatory compliance mandate changes as a result of remote workers, there are a variety of long-standing employee regulations that businesses must navigate. These include: FLSA, FMLA/ADA compliance, Overtime regulations, HIPAA, COBRA, Harassment, DEI, Benefits notices, Employee handbooks, and more. While some mandates are more onerous than others, all require careful implementation in order to avoid penalties from regulators. Your company needs to understand, implement, and adhere to the continually changing regulatory landscape. They can require new processes and procedures, as well as the hiring and training of new personnel. So, what are the latest changes that are impacting businesses, startups, and nonprofits?
Why All The Changes?
State, county, and city governments have been passing laws expanding protections for certain classes of people. In some cases, these laws are in response to actions taken by changing administrations. For example, 21 states and 21 localities have now passed a law that prohibits employers from asking job applicants about their salary history as a response to a changing federal regulation that allows employers to ask applicants for their salary history. In 2021, the Paycheck Fairness Act was passed by the United States Congress. This Act is intended to address the gender wage gap.
These changes aimed at protecting employees from potential discrimination have caused businesses to face more lawsuits and higher costs. These laws are being passed without input from the business community, which is causing frustration among business leaders.
Recent legal mandates for HR management have increased the need for organizations to have a clear understanding of their HR regulatory environment. This includes knowing what laws and regulations specifically pertain to your HR practices, as well as ensuring that your HR policies align with these requirements.
Managing Employment Laws Across Multiple States
In addition to ensuring that your business is compliant with new and existing mandates, HR Managers or Business owners are now finding themselves facing new payroll challenges for remote employees, often across multiple states. Implementing a remote work policy can also present additional and perhaps unexpected challenges for employers.
Consider how employing workers in multiple states will affect your payroll processing procedures. For example, if your business is headquartered in Florida (which does not have State Employment tax), and you recently hired someone who is working in Pennsylvania (which has State Employment tax), you’ll need to create a PA State Tax ID number and make sure to pay the appropriate state and local taxes accordingly.
Manage Tax, Regulatory Compliance, and Other HR Issues by State
Challenges can arise from state and local tax obligations. This is based upon the state in which your business and employees are located. California, for example, is the most Pro-Employee state in the US and consequently, employee law in CA is very different from other states, and CA regulatory compliance laws are more stringent with regards to both employee screening, onboarding, and benefits. The CA Paid Family Leave law tops the list. This law provides up to six weeks of partial pay to employees who take time off from work to care for a seriously ill family member or bond with a new child (through birth, adoption, or foster care).
Other regulatory compliance issues include Whistle Blower Protection, Protecting employees who form or join unions, Workplace discrimination, Fair Salary regulations that prohibit employers from relying on the job applicant’s salary history, and strict overtime pay regulations.
Because each year brings changes to human resources legislation to federal, state, and local wage standards, IRS compliance notices, FLSA orders, and NLRB decisions, changes to your company policies will ensure regulatory compliance. This requires an understanding of each change and then adjusting your policies accordingly to ensure that your company’s HR approach satisfies the specific rules and requirements.
HR Regulatory Compliance Financial and Legal Risks
Whether you are a business owner, a startup CEO, or a nonprofit leader, having a trusted HR resource you can count on with the knowledge and capacity to manage HR regulatory compliance, payroll, employee benefits, workers’ compensation, company policies, HR administration, and all the other employment aspects for your company can be a challenge. Making mistakes in human resources can create a huge financial expense, as well as a legal liability.
Human resources management is becoming more complex with a wider variety of federal and state regulations. Gone are the days of a human resources department that is only responsible for handling the hiring, firing, and managing the payroll for employees. There is an ever-increasing number of laws and regulations that govern how businesses must manage their human resources. If your business is not compliant, there may be additional financial and legal risks.
If your company is not adhering to existing or new guidelines and an employee files a federal complaint, based on any one of these regulatory compliance issues, it can lead to substantial fines for your company and potentially back wages owed to the employee(s). Working with a professional HR organization can help you manage these daunting tasks and minimize the risk of noncompliance. By eliminating the amount of time you spend on managing HR issues, you will have more time to focus on daily operations and grow your business.
As labor costs continue to rise and regulatory compliance laws become more complex, business owners have found that outsourcing HR administration has many benefits. In an effort to ensure regulatory compliance, decrease expenses and increase productivity, many business owners have decided to seek assistance from HR consulting firms.
What Can You Do About Regulatory Changes?
Laws prohibit retaliation against any employee who makes valid discrimination or harassment claim. A discrimination or harassment complaint with a federal or state agency requires a related investigation, whether internally or by legal authorities. Additionally, it is important to have robust and up-to-date employee records in order to comply with anti-discrimination laws. Finally, it is crucial to have an effective communication strategy in place so that employees understand policy changes and how they will impact them.
Stay up to date with rulings and changes that will impact all workplaces. Review your policies, procedures, and actions to ensure all employees can exercise their rights. Ensure compliance with wage payment practices and employee or independent contractor classifications. HR regulatory mandates are becoming more common, as organizations attempt to comply with increasingly demanding regulatory compliance.
If all this seems like a lot, it’s because it is! If you need help with your HR compliance, payroll, benefits, policies, or administration, we have a dedicated team of experts ready to help you make sense of these overwhelming challenges. At Human Capital Concepts, we simplify being an employer. Find out how we can help you.