Compliance

Compliance Issues Every HR Leader Should Know

September 08, 2022

Employers and HR leaders are acutely aware of the dynamic and sometimes unpredictable nature of labor law updates, including how they can affect a business and its ability to remain in full compliance. Designing and then successfully implementing company policies that keep your business aligned with federal and state labor laws while offering benefits, perks, and a company culture that appeals to job candidates and existing employees can be a considerable challenge.

We’re here to help you sort through these concerns and focus on addressing the major compliance issues that could impact your business. Wherever possible, we’ve included updates and trends specific to each category of compliance so you can remain up to date on the latest developments.

Wage & Hour Laws

Like all of the compliance issues we’ll explore in this article, wage & hour law is a multifaceted one, including rules on minimum wage, overtime, child labor, hours worked, paid & unpaid breaks, etc. Although the Fair Labor Standards Act establishes federal requirements for minimum wage and overtime, employers and their HR leaders should be cognizant of frequently shifting state laws that often differ from or enhance federal policy. 

As just one example, the federal minimum wage has remained stagnant at $7.25 since 2009, but a large number of states have legislated increased minimum wage rates since then. Thirteen states, including Virginia and Delaware, have introduced new hourly rates that take effect in January of 2023 – ranging from $10.10 to $15.00 hourly, depending on the state.

Similar pieces of state legislation impact regulations on overtime, paid and unbreak breaks and other labor law concerns. Sometimes, depending on your state, required compensation rates vary based on the size of your business, or even the city or county where you’re located. HR leaders should remain equally mindful of legal updates to other labor-related issues like predictable scheduling laws, bans on salary history, and more.

To avoid wage & hour law compliance issues, employers should focus on eliminating manual entry of payroll, instead relying on a streamlined and automated payroll + time & attendance system that ensures accuracy and optimized recordkeeping.

Family and Medical Leave

The Family and Medical Leave Act (FMLA) grants employees up to twelve weeks of unpaid leave in the event of a medical or family-related issue that requires an extended absence. This act protects employees against unfair job termination in the event of a critical medical or family situation, and guards against the exacting of penalties during or after the employee’s sanctioned leave period.

Traditionally, leave has been granted to treat a serious health condition (the employee’s or the employee’s family member); for the birth and caretaking of a newborn; for an employee with a child from foster care; for an employee who has adopted a child; and other permissible situations.

HR leaders and their employers should be aware that some states have introduced or enacted legislation that makes these leave periods paid (or “income-replaced”) rather than unpaid, and extends the overall leave period past the current federal threshold of twelve weeks. Additionally, in response to increased leave requests for mental health reasons, the FMLA recently released an updated fact sheet to assist employers in navigating leave requests for reasons of mental health.

Benefits: Retirement and Beyond

Benefits, including benefits programs and retirement plans, are legally impacted by federal legislation like the Employee Retirement Security Act, the Patient Protection Act, and the Affordable Care Act (ACA). 

Many states have also introduced, passed, or instituted state-mandated retirement plans (primarily Roth IRA plans) to assist low- and middle-income employees who lack access to viable retirement options provided by their employer. Employers should be aware that, in most cases, employers must offer enrollment in a state-sponsored program only if they fail to offer a private qualifying plan to their employees. A growing number of companies are offering robust 401(k) matching plans to appeal to new job seekers and current employees. For more information on the various strategies businesses are using to provide retirement benefits, please explore our recent guide on 401(k) plans and state retirement plan mandates.

Safety Laws: OSHA, Workplace Harassment, Workplace Discrimination

OSHA, the Occupational Health and Safety Act, was created to provide safe and healthy working conditions for employees in a variety of industries. For HR leaders and employers, OSHA compliance hinges on diligent and accurate recordkeeping (regarding injuries, incidents, or illnesses), reporting (sometimes annually, sometimes immediately), and proper safety training for qualifying employees. Reporting and recording requirements are regularly updated or refined, so HR leaders should do their best to remain attuned with new developments, regardless of industry.

With work and safety conditions in mind, workplace harassment is another concern that employers must responsibly address, predominantly through sexual harassment prevention training. States like California, Illinois, and New York have already passed legislation that requires workplace sexual harassment training and employers should be aware of the laws (impending or active) that apply in their states.

Anti-discrimination laws like the American with Disabilities Act (ADA), Age Discrimination in Employment Act (ADEA), and the Civil Rights Act of 1964, all inform federal regulations of employment discrimination. Fundamentally, federal law prohibits any discrimination based on race, sex, color, ethnicity, age, disability, veteran status, or genetic information. 

How Payday Can Help Your Business Ensure Labor Law Compliance

In addition to the compliance issues we explored in this article, businesses must also consider updates to privacy/security laws, union laws, immigration laws, and other state and local laws that impact their specific state or industry. For many businesses, it can be overwhelming to stay up to date with the latest legislative changes while implementing sustainable policies that keep your company in compliance.

With Payday in your corner, adhering to federal, state, and local business regulations has never been easier. We manage the ins and outs of filings, deadlines, eligibility, reporting, oversight, and everything else that compliance throws your way. Contact us today to start our collaboration and alleviate your compliance concerns.

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