Compliance is one of the most challenging HR elements to navigate. Many employers can't keep up with how frequently existing laws and regulations change, while mistakes can incur fines, reputational issues, and lawsuits.
Staying compliant is an ongoing process that requires continuous monitoring, navigation, and mitigation. When the compliance strategy is faulty, HR specialists face various serious problems.
Let's take a closer look at the most common HR compliance issues.
Wage and Hour Compliance
The employer is responsible for complying with all wage-related regulations that apply to their employees.
Wage and hour laws define how U.S. employers must compensate employees for time worked. They also regulate what hours your employees are allowed to work and establish rest and mealtime standards. The primary wage and hour law in the United States is the Fair Labor Standards Act (FLSA). The Wage and Hour Division of the U.S. States Department of Labor enforces it.
Payroll processing can be complicated, especially for employers with large workforces and varying salaries, age ranges, and requirements. It can be even more challenging for those whose states of residency are different from the employer's state of operation.
Overpaying and underpaying wages are serious issues. Correcting these mistakes requires a diligent approach. You can pay significant fines if you can't fix the problem before the Wage and Hour division steps in. Fines may range from $10,000 to imprisonment.
Payroll Taxes
Staying compliant with HR-related tax laws isn't easy either. Since the employer is responsible for withholding taxes from employees' paychecks, they must ensure that calculations are precise.
Paying the wrong amount is a common but serious mistake. The company may face fines and legal action if the IRS believes you are evading taxes.
You can incur fines if you fail to submit payroll taxes on time. Just one day of delay results in a 2% tax penalty.
Family and Medical Leave
Family and Medical Leave Act allows employees to take a 12-week paid time off when they need it the most. However, complying with this act is not as easy as it seems. Numerous nuances make it hard to implement the leave and ensure that employee rights aren't violated
According to the law, an employee can take this leave if they:
- Become a biological parent
- Adopt a child or take a child into foster care
- Need to take care of a new child (biological, adopted, or foster) within one year of birth or placement
- Care for a parent, child, or spouse with a serious health condition
- Have a serious health condition that keeps them from working
- Face an urgent need related to their parent, child, or spouse being on active duty in the armed services.
The amount you are supposed to pay the employee while they are on this leave varies from state to state. Usually, it is a percentage of the employee's wages, capped at a certain amount. Failing to pay the employee what they are entitled to can result in a penalty.
Common FMLA violations are:
- Refusing to authorize an FMLA leave for qualified employees
- Discouraging employees from using this leave
- Using the employee's request for an FMLA leave as a factor when taking employment actions (e.g., promoting)
- Not allowing an employee to return to the same position after the leave
- Asking employees to continue working (even part-time) while on FMLA leave
Employers must also remember that FMLA leave doesn't exclude other paid time leaves. It can be taken once in a 12-month period.
Health and Safety
The health and safety of employees are prevalent concerns in industries such as manufacturing or trucking, though it's not limited to these. However, a lack of safety measures can quickly turn a seemingly safe office into a hazardous environment.
The employer is responsible for ensuring the health and safety of the workforce. Failing to implement the necessary elements could cause injuries, incurring a workers' compensation claim.
It's up to the employer to maintain OSHA standards, which help you minimize workers' comp claims and improve the workplace environment.
The most common health and safety compliance issues include:
- Lack of employee training
- Absence of written health and safety programs
- Ignoring or not knowing applicable OSHA regulations
- Lack of safety rules
Unfortunately, not all employers have the time and resources to ensure total health and safety compliance.
How PEOs Help Businesses Maintain HR Compliance
The most common issues that keep employers from maintaining HR compliance are small HR teams, lack of knowledge, and limited resources.
By partnering with a professional employer organization (PEO), you can delegate all HR compliance matters to a team of professionals for a fraction of the cost of doing the same in-house.
A PEO partner can handle payroll processing, payroll taxes, safety training, FLSA compliance, and much more. They can give your internal HR team enough time to focus on supporting and expanding the workforce. Contact PRO Resources today to learn more about services PEOs can help cover!
