For business owners and HR professionals, ensuring HR (human resources) compliance is a must. With 2020 underway, it’s time to take inventory of which annual HR compliance to-dos you’ve already checked off your list and which ones are still pending. As always, it’s best to be proactive. Waiting for an incident to occur and then updating policies is never a good idea and can leave your business at risk for lawsuits, penalties and fines. Not to mention, a tarnished reputation. Here are seven annual HR updates critical to the success of your small to medium-sized business.
1. Update Your Business’ Employee Handbook
An employee handbook is an important communication tool between you and your employees, and is a must-have for your business. All expectations are clearly defined, along with your legal obligations as an employer and your employees’ rights. But creating a great employee handbook isn’t a one-time thing. Employee handbooks should be reviewed and updated annually, then redistributed to your employees. When making updates, consider thoroughly addressing the following policies:
- Equal Employment Opportunity Policy: Confirm your policy follows federal, state and local laws.
- Dress Code Policy: When reviewing your dress code policy, define exactly what is acceptable, or not, in terms of clothing (i.e. what does business casual mean); address tattoos, non-traditional hair colors, body piercings, and strong perfumes and colognes that could bother coworkers or customers.
- Mobile Phone Policy: Include what is acceptable in terms of talking and texting while at work, and appropriate volume setting for ringers (i.e. silent, vibrate, or ring).
- Social Media Policy: Are employees allowed to access their Twitter, LinkedIn, Facebook, Snapchat, Instagram, and YouTube accounts while at work? What about posting from work? Also, include guidelines on whether or not managers are allowed to “friend” or “follow” company employees on social media.
- Dating in the Workplace Policy: Without a policy in place regarding romantic relationships between coworkers, your business can be at risk of sexual harassment lawsuits. The most common ban on office dating exists between a supervisor and subordinate.
- Other Policies: A review of your business’ anti-harassment, anti-discrimination, bullying, workplace violence, drugs and alcohol, smoking, and disciplinary policies should be completed, too.
2. Review Employee Classifications
Do you know the difference between an employee and an independent contractor? Misclassifying employees as independent contractors can have big consequences. But it isn’t always an intentional, ill-willed act. Often, small business owners simply don’t know the difference.
Further, to remain compliant with the Fair Labor Standards Act, you’ll need to understand worker status - are they exempt or non-exempt? Under the Department of Labor’s new overtime rule, which took effect January 1, 2020, the minimum salary threshold for exempt executive, administrative and professional employees increased to $684 per week, equivalent to $35,568 per year. An internal audit of current pay and hours worked for all salaried employees who are below the new salary threshold will help employers make the most strategic decisions for their businesses when it comes to overtime pay in 2020.
3. Update Job Descriptions
Having accurate, up-to-date job descriptions serves as an important communication tool between you and your employees. It tells them exactly what is expected in terms of job performance, sets standards, and even lays out rules. Descriptions also help applicants understand if a particular position at your organization would be a potential good fit.
But job descriptions aren’t just good practice, they actually help protect your business from potential lawsuits when it comes to reasonable accommodations under the Americans with Disabilities Act (ADA). Further, they help justify an employee’s exemption status.
4. Affordable Care Act
One thing we’ve learned since the Affordable Care Act (ACA) took effect is employer penalties and fines for failure to comply can add up quickly. If your business is close to the threshold of 50 full-time equivalent employees, it is critical to perform the Applicable Large Employer (ALE) calculation. If you determine you are an ALE, your insurance must be affordable and proper paperwork must be filed, or ACA penalties will be in your near future.
5. Labor Law Posters
The Department of Labor (DOL) requires employers to post current notices of applicable statutes and regulations. Posting requirements vary, as not all employers are affected by every statute. For example, the Family Medical Leave Act would not apply to some small businesses and, therefore, would not be subject to the Act’s posting requirements. Electronic versions of posters can be found on the Department of Labor website.
6. Recruiting and Interviewing Compliance
Are your recruiting and interviewing practices in compliance with federal, state, and local laws? Key areas to check are Ban the Box laws, Salary History Bans, and credit check restrictions. In Kansas City, for example, it is illegal to inquire about salary history or whether the applicant has ever been convicted of a crime. How about Americans with Disabilities compliance? Are candidates given access to adequate ADA information during the interview process?
Another key compliance area to assess are interview questions asked by your management team. It’s important to note that some questions, though commonly asked, are actually illegal. For example, questions that aren’t directly related to determining if a candidate is qualified for the position are irrelevant and may be illegal if the information gained from the answers could be used to make a determination about the applicant’s race, age, sex, disability, national origin, religion, marital status or gender.
7. Management Training Plan
Annual training gives your management team the knowledge and skills necessary to confidently recognize and handle issues that could result in a risk to your organization. Training sessions to consider include, but are not limited to:
- Giving Performance Reviews. In 2020, consider ending the outdated practice of annual performance reviews and instead beginning the practice of managers meeting with associates regularly throughout the year.
- Managing Difficult Employees. Toxic employees aren’t uncommon. In fact, some experts predict it’s likely every organization has at least one on their team right now. And while many business owners and hiring managers believe the best defense is a good offense - never hire a toxic candidate in the first place - it’s inevitable one will slip through the hiring cracks and their destructive behavior will begin to damage your business. Whether the toxic employee is your high-performer or a major procrastinator, you must have one set of rules by which all employees must abide.
- Preventing Sexual Harassment and Handling Harassment Allegations. In just 18 short months, the #MeToo movement has jolted the workplace in ways few other issues ever have. As women – and men – come forward to speak out about having been victims, sexual harassment has grabbed headlines and become a key issue business owners and managers face.
- Terminating an Employee. Even when it becomes clear the best decision is to stop investing in a particular employee and let him or her go, saying goodbye is tough, especially for small businesses. Everyone in the company will have eyes on the manager in charge, and how the termination is handled can have both short- and long-term effects.
- Keeping a Safe Workplace. While some industries inherently have a greater safety risk than others, hazards exist in all workplaces, even your typical office environment. While the degree of impact to your workforce and bottom line will vary from risk to risk, there’s one thing that won’t — the preventative action a positive safety culture provides.
To find out more about key law changes that took effect January 1, 2020, including payroll changes, see these two must-read blog posts:
Remember, help is just a phone call away. Professional Employer Organizations, like Axcet HR Solutions, are in the business of understanding the ins and outs of human resources and legal compliance, helping protect business owners from HR non-compliance.
No Legal Advice
The information and materials on this site are provided for informational purposes only. They do not necessarily represent the position or opinions of Axcet HR Solutions or its employees, and they do not constitute legal advice. You should consult with a qualified lawyer of your choice who is familiar with all of the facts of your situation before making a decision about any legal matter.