The human resources field can be extremely complex. Not only do you need to navigate an assortment of personalities, positions, and descriptions, but you also need to ensure compliance to a a wide array of regulations and laws. One simple mistake can cost a fortune in fines and penalties, not to mention employee morale and productivity. Even the most unassuming, by-the-book businesses can fall prey to HR compliance issues if they’re not careful.
Is your company on the verge of crossing a compliance line? Here are some top HR compliance issues and how to solve them.
Misclassifying Employees as Contractors
The Issue: Tax complications
If you don’t have a solid grasp on whether someone is an employee or an independent contractor, you could be hit with huge penalties when the IRS comes knocking at your door. Classification mainly comes down to three aspects of the work agreement: behavior, finances, and the type of relationship you have with your employees.
The Solution: It’s always best to review the IRS’s Employer Supplemental Guide before making decisions. Consult with your CPA or a professional human resources firm if you’re not 100% certain as to the proper way to classify your team in order to maintain HR compliance.
The Issue: Penalties associated with employment eligibility verification
Immigration laws are constantly in the news and the last thing you want to do is to be the company that’s found in non-compliance of federal regulations as they pertain to hiring immigrant workers. Know your company’s policy about work eligibility sponsorship and have procedures in place to filter out illegal hiring practices or you could be faced with serious penalties.
The Solution: Vet candidates thoroughly, and be sure your onboarding process requires candidates to complete a federal I-9 form, which requires proof of valid U.S. work authorization.
The Issue: Penalties associated with the Equal Employment Opportunity Act (EEO)
The Equal Employment Opportunity Act protects your employees for discrimination based on a number of federally protected classes and most states further protect other employees. The EEO ensures that employees cannot be hired, fired, placed in a certain position, be given or denied access to benefits, be given a certain pay rate, or have other HR actions taken based on a protected class .
The Solution: Follow fair workplace standards and review the Equal Employment Opportunity Act thoroughly to ensure that your company is in compliance.
The Issue: Not understanding your responsibility to provide access to healthcare coverage as an employer
Healthcare is by far one of the most concerning issues that employers face today. The Affordable Care Act requires that certain companies offer health coverage if they have over a certain number of employees. Employers who do not abide by requirements set forth by the Affordable Care Act may face substantial fines. Not staying abreast of changing laws can result in a company falling out of compliance with healthcare requirements.
The Solution: Consult with HR and benefits professionals who have experience in the requirements set forth by the ACA and any upcoming legislation to eliminate any potential violations
Are you feeling overwhelmed by the HR compliance issues facing your company? You’re not alone. Many small and mid-sized companies are facing similar dilemmas every day. What’s the difference between worrying about compliance and working under an umbrella of guidance and protection?
At Insight Performance, our team is here to help your business stay in compliance with ever-changing employment rules and regulations. Contact us today to learn more!