The regulations that apply to small firms are numerous. As soon as you begin hiring staff, you must follow these constantly evolving legal requirements. You need to keep an eye on changes at the state and municipal levels in addition to the criteria set by federal agencies. We’ve highlighted eight key developing employment and HR compliance requirements you’ll need to keep an eye on, despite the fact that there are innumerable HR compliance difficulties you may encounter.
- Avoiding discrimination on job applications
It is prohibited to discriminate against applicants and workers based on a protected class, according to statutes that are enforced by the United States Equal Employment Opportunity Commission (e.g., race, color, religion, sex, national origin, age, disability, genetic information). You run the danger of facing a discrimination lawsuit if you request specific information on a job application. Avoid inquiring about the following to keep yourself safe:
- Previousconvictions:“Ban the Box,” which forbids employers from inquiring about applicants’ arrest or conviction history before evaluating their qualifications, is supported by 37 states and more than 150 communities. This makes it easier for people who have been sentenced to apply for jobs fairly.
- Salary history:making inquiry about someone’s prior earnings may perpetuate the gender wage gap.
- Age, birthdate or graduation year:The Age Discrimination in Employment Act of 1967protects workers 40 and older against hiring bias.
- Citizenship:Ask potential employees just if they are authorized to work in the United States in order to avoid accusations of racial or national origin discrimination.
- Pregnancy, children or marital status:A applicant might be eliminated if you believe they will frequently miss work to take care of their family.
- Religious holidays: You must respect people’s differing religious views and customs. If you inquire about holidays, candidates can feel you are prejudiced against them.
- Alcohol or tobacco usage:Alcohol and tobacco use can impact a person’s productivity and the cost of their health insurance with your firm, but it cannot affect your recruiting decisions. Ask them instead if they have ever been penalized for disobeying an employer’s rules.
- Disabilities:Under the Americans with Disabilities Act, you must make reasonable accommodations for workers with disabilities.
- Protecting your staff from workplace harassment
In organizations of all sizes, harassment occurs. Even if this has long been the case, the #MeToo movement has made it more widely known. Due to this, some states have proposed legislation that imposes harsher punishments, demands staff training, or forces the adoption of anti-harassment policies. If you don’t take action to prevent workplace harassment, your reputation could suffer, and there could be serious financial repercussions.
You can protect your team by taking three steps:
- Adopt and enforce anti-discrimination and anti-harassment policies.In your employee handbook, list specific instances of unacceptable behavior. These illustrations can assist in avoiding ambiguity and preventing issues before they occur. Declare that the business would handle all complaints in a private manner and conduct a timely, complete, and unbiased investigation. Then, reaffirm your commitment to taking appropriate action as necessary.
- Develop a reporting system to act quickly if someone submits a harassment complaint. Specify who to contact with complaints and how to do so. Consider assigning a number of individuals to receive and investigate harassment accusations. If the principal investigator is the subject of the charge, this will safeguard victims. Pick at least one guy and one woman if you can to encourage your staff to bring up problems.
- Teach your employees to promote a fair, civil and harassment-free work environment.Your workers could be unable to identify harassment or know how to help victims. Teach your staff how to keep themselves, their coworkers, and your business safe.
- Classifying your workers correctly
In comparison to an independent contractor, you have different duties. An employee’s federal and state taxes, for instance, must be deducted from their paychecks, and you must file a W-2 on their behalf at the end of the year. Although you often don’t have to deduct taxes from contractors’ paychecks, you still need to provide them with a 1099-MISC at tax time. You must assign the proper roles to your team members in order to satisfy these various standards. It can be challenging because “contractor” has no standard definition, which is unfortunate.
To determine a worker’s status, examine three aspects of your relationship:
- Control over behavior: If you are able to dictate how your employee behaves, they are probably an employee.
- Financial oversight: The worker is presumably an independent contractor if you pay them per project and don’t reimburse them for work-related expenses.
- Connection type: If the relationship is permanent or you provide benefits, you should regard the person as an employee.
- Paying your employees at least minimum wage
For covered nonexempt workers, the federal minimum wage as of right now is $7.25 per hour. You may be liable for back wages and severe fines if you pay your employees less than that.Despite the fact that the rate has been unchanged for more than ten years, there is a widespread campaign to raise the minimum wage to $15 per hour. In actuality, over half of the states and a number of localities have set their minimum salaries higher than the DOL’s (U.S. Department of Labor) requirement.You will often have to pay your employees the larger of the two minimum wages if your state’s differs from the federal cap.
- Knowing when to pay overtime
Different overtime pay laws must be followed by employers. If an employee satisfies all of the following requirements, they are free from overtime pay, according to the DOL:
- They receive wage payments.
- They make a minimum of $684 per week, or $35,568 annually.
- They carry out exempt work responsibilities like managing two or more employees.
For any time worked over 40 hours in a workweek, you will likely need to pay the rest at least 1.5 times their hourly wage.
Like with other employment laws, federal law is not the only one you need to take into account in this situation. Each state has its own overtime regulations. For each time worked over eight hours in a day, for instance, you must pay your employees 1.5 times their standard hourly rate in Alaska.
Consider using payroll software that links with a timeclock to track overtime and make sure you’re paying your staff correctly.
- Understanding your medical coverage requirements
At the start of 2019, the tax penalty for not having health insurance was removed. However, the Affordable Care Act requires businesses to offer health insurance to those that employ 50 or more full-time equivalents (FTEs). Anyone who works an average of 30 hours or more each week is considered an FTE. If you don’t provide health care when you should, you could be subject to severe penalties.Start evaluating your alternatives after your team reaches about 50 members to make sure you’re ready to cover any potential medical expenses.
- Offering paid sick and parental leave
Paid time off is not required by federal regulations, and many firms do not provide it. This implies that employees frequently have to decide between taking home a reduced paycheck and reporting to work sick. Many states have passed paid sick leave legislation that permits employees to spend such time for themselves or a family member in an effort to stop this.Employers with 50 or more employees are required by the Family and Medical Leave Act to offer employees up to 12 weeks of unpaid, job-protected time off for legitimate family and medical reasons. The eligible employee must have put in a minimum of 1,250 hours during the previous 12 months. This law may have several exclusions.
- Preparing your employees for retirement
A number of states now have laws requiring companies to offer retirement plan options. California, Colorado, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Vermont, Virginia, and Washington are some of these.Due to the expenses and maintenance required, providing these perks can be difficult for small enterprises. Use a state-run option to reduce the administrative load if you are compelled to give retirement benefits. For instance, Illinois firms can administer their employees’ retirement plans through the Illinois Secure Choice retirement savings program. The program is free; all that is required is that you deduct the retirement contributions from each employee’s paycheck and report the total to Illinois Secure Choice via its website.Bottom Line
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