Compliance is a company’s commitment to creating policies and procedures to ensure all team members are demonstrating work practices and personal interactions within the confines of local, state, and national laws.
Almost all departments have some form of compliance focus, but with HR, laws and regulations tend to change more frequently, and it’s important to make an effort to stay informed to avoid legal repercussions. Failure to comply with certain regulations can result in huge fines, other civil lawsuits, and even government audits. Making an effort to be mindful and up-to-date on HR compliance is considered a good move by the majority of business advisors.
This article will take a look at 15 common errors HR teams make that can lead to punitive action being levied for failed compliance with laws and regulations.
1. Unpaid Time that Should Have Been Paid
They vary from state-to-state, but each state has a set of regulations that dictate just when an employee legally has to receive compensation. This includes breaks (for instance, in California, employees are required to provide a 10-minute paid rest break for every four hours worked), mandatory training, and travelling for work.
Failing to comply with payment regulations in your area can result in lawsuits from the individuals who did not receive their legally protected compensation.
2. Off-Limit Interview Questions
One of the major objectives of the powers of HR compliance is avoiding prejudicial hiring practices. Here is a list of some questions you should avoid during communications leading up to an interview, as well as in the interview process:
- Age or genetic information
- Birthplace, country of origin, or citizenship status
- Gender or sexual orientation (It is a great practice to ask for preferred pronouns!)
- Marital status or family composition
- Race or ethnicity
- Religious and spiritual practices
3. Money Talks
In many jurisdictions, it’s illegal to directly ask about previous salaries in addition to the personal questions mentioned above. It is, however, commonplace for a potential hire to offer this information during discussions about pay. If they choose not to, though, it can’t legally be a reason for denying that individual employment.
4. Prohibiting Salary Discussions
In addition to it being illegal for you to ask your employees about their previous salaries, it is also illegal to prohibit your employees from discussing their current pay and benefits with each other. The National Labor Relations Act is the legislation that dictates this, so if you think your organization has a rule prohibiting salary talks, take action to correct it before it gets your team in trouble.
5. Overtime Rules
On a national level (and some local laws are more strict), it is mandated that employees receive 1.5 times their regular wage for any hours worked in a single work week after 40. Any other weeks in a given pay period do not matter regarding overtime. Even if an employee only works two hours in each week in a pay period, the extra time cannot be shifted in an attempt to avoid paying overtime.
6. No Such Thing as “Unauthorized” Overtime
Employers are allowed to have policies in place that require employees to ask before working overtime, but no matter the circumstances, if overtime is worked it must be paid, even if these policies are in place and have been broken. Not paying time and a half for any time over 40 hours is illegal and can result in punitive action.
7. There Are “Overtime Exempt” Employees, but be Wary
Some jobs do require structures that make employees exempt from overtime, but often it is thought that all salaried employees fall into this category, and they do not. In many jurisdictions, salaried employees are legally entitled to overtime, so be sure to check the overtime exempt regulations in your area.
8. Doctor’s Note Requirements
These requirements vary from state to state, but most areas have laws that protect employees from requiring documentation for taking sick leave. The thought behind these laws is that not everyone should have to go to the hospital just to prove they were sick.
9. Withholding Pay
It is illegal on a national level to withhold a final paycheck under any circumstances. Employees must be paid before their next scheduled payday, and in many states the timeframes are even smaller. Even if an employee has company property that has not been returned, they still legally need to be compensated for all hours worked prior to their documented termination.
10. Unused Vacation Pay
These laws also vary from state to state, but in most places, unused vacation time must be paid out as hours worked for employees who have been terminated. Some states allow for “use it or lose it” policies, but these should be clearly stated to employees during their onboarding to avoid legal issues.
11. Whistleblower Protection
Companies must provide their employees a safe and clear path to submit complaints for both personal issues and those that employees believe may be violations of some of the regulations mentioned in this article. Ultimately, encouraging employees to be honest and making them feel comfortable bringing issues to light is good for compliance and employee retention.
12. I-9 Restrictions
There is a page on the I-9 form that lays out which pieces of documentation are acceptable when submitting work authorization paperwork. It is the employee’s right to choose which documents they use, and requiring a certain document or not allowing others is not a compliant practice.
13. Criminal History
There is no national law strictly stating that you can’t ask about criminal history on an application, but many local jurisdictions do have laws regarding this, so be sure to look into it. The national recommendation laid out by the Equal Employment Opportunity Commission is to wait until late in the selection process and be sure that inquiries about criminal history are relative to the job (for instance, if driving is required, asking about driving records is justifiable).
14. FMLA Notifications
The Family Medical Leave Act (FMLA) is a piece of legislation that allows for continued health insurance for employees who take unpaid leave to care for a loved one who meets the criteria below. Failing to inform employees on their rights relative to the FMLA is a common compliance error that can result in legal repercussions with the business. Managers and supervisors can be sued for personal damages as well.
The FMLA dictates that employees retain their health insurance if they take unpaid leave for these reasons:
- The birth of a child (insurance protected for 12 weeks)
- Caring for an adopted child (insurance protected for 12 weeks)
- To care for a spouse, child, or parent with a serious health issue (insurance protected for 12 weeks)
- To care for themselves if they have a serious health issue (insurance protected for 12 weeks)
- To care for an injured military service member who is a child, spouse, or parent (insurance protected for 26 weeks)
15. COBRA Noncompliance
Similar to the FMLA, the Consolidated Omnibus Budget Reconciliation Act was created to help families remain insured for a given period following a major life event that resulted in job loss, or reduction in hours that would put them below the threshold of requiring health insurance.
Avoiding punitive action relative to noncompliance is the responsibility of an entire organization. However, getting the wheels in motion is often a task given to HR teams. Staying up to date on all things compliance is no easy task, but KnowledgeCity’s compliance training courses are created to help HR teams do just that.
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