Archive for the ‘Employment Laws’ Category

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2012 HR Strategy #2: Mitigate Employment Risks

Monday, January 30th, 2012

Employment litigation is at historical highs. The Equal Employment Opportunity Commission (EEOC) reports they received close to 100,000 discrimination claim charges during the 2011 fiscal year, the highest level in the commission’s history. The poor economic conditions and sustained layoffs, coupled with new laws and expansion of existing laws, are all likely to lead to an increase in claims filed in 2012.

With lawsuits on the rise, employers must do all they can to stay ahead of the employment curve and to make compliance with 2012 labor laws a priority in the new year. The challenge for small employers, however, is understanding and complying with the multitude of regulations that affect their business. Particularly in certain states, such as California, employment laws are overwhelming and can be significantly different than their federal counterparts.

Outsourcing Human Resources with a PEO

There is a solution! In a Professional Employer Organization (PEO) relationship, the business owner outsources human resources administration to the PEO and relies heavily upon the PEO firm to to stay abreast of changing laws and regulations. The PEO/HRO firm provides clear direction and support, assisting them in all areas of HR compliance. Typically, clients are assigned a Human Resources expert to personally help them understand the law, and how the law impacts their business and employment practices. HR consultants provide support in all of the following areas:

  • Resolving employee complaints
  • Fielding general inquiries
  • Performing terminations
  • Assisting in exit interviews
  • Assisting with investigations
  • Auditing employee files and records
  • Conducting salary surveys
  • Speaking confidentially with employees regarding complaints or grievances.

Studies show that businesses that offer an outlet for employees to speak to professionals not only experience a reduction in lawsuits, but also lower health insurance costs, turnover, and workplace injuries.

The PEO also assists businesses comply with HR forms, documents, and employee management. They review the client’s current Employee Handbook and Policy Manuals, and update it to enhance compliance with all mandatory state and federal guidelines. By taking a hands-on, proactive approach, clients enjoy increased protection against unnecessary and expensive employment litigation.

EPL Insurance

Finally, most PEOs offer Employment Practices Liability Insurance (EPLI). EPLI is a comprehensive insurance that provides protection to employers against a wide range of employment practices and is designed to cover certain claims and lawsuits brought by employees alleging wrongful termination, discrimination, unlawful harassment, and other related torts, including but not limited to:
• Discrimination • Wrongful employment decision or act • Comprehensive omnibus wording • Wrongful termination or demotion • Sexual and non-sexual harassment • Wrongful demotion • Assault and battery.

While companies have long recognized the value of General Liability or Errors and Omissions insurance, many now understand the importance of EPLI.

In short, a PEO relationship can help employers in all aspects of their employment compliance, significantly reducing the chance of being the victim of an employee lawsuit. Perhaps investigating how a PEO can help protect your business should also be a priority in 2012.

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Posted in Employment Laws, Outsourcing, PEO/Co-employment | No Comments »

3 Employment Strategies for an Uncertain 2012 – Part 1

Monday, January 23rd, 2012

From the Republican primary race, to the future of Health Care Reform, to employer tax cuts, it seems that 2012 can be dubbed, “The Year of Uncertainty.” However, despite the unknown, employers can take control of their future by focusing on three important employment strategies for the coming year. Those three priorities are: 1) containing employment costs; 2) Reducing employment risks; 3) improving employee performance.

In part one of this two-part series, we will discuss these three strategies and what they mean to employers. In part two we will analyze how employers can effectively implement these strategies into their organization.

Stabilizing operating expenses. Following years of flat sales, employers should investigate ways to manage a lower operating budget and to minimize unnecessary expenditures. While there are potentially hundreds of areas that can be considered, employment costs usually account for one of the largest percentage of expenses in any business. These expenses include hard costs, such as payroll and tax overhead, health insurance premiums, workers’ compensation insurance, legal and recruiting fees, and payroll processing costs. They also contain soft costs such as employment administration, employee training, responding to employee questions or complaints, employee reviews and general labor law compliance. Reducing these labor costs can have a significant impact an employer’s bottom line.

Reducing employment risks. With years of experience and research to support the claim, it has been well documented that there is a direct correlation between difficult economic periods and an increase in employment related lawsuits. Stephen C. Dillard, head of Fulbright’s global litigation practice, states “Generally, litigation rises in an economic downturn as regulators tend to step up enforcement, laid-off workers head to court, and companies need to file more suits in order to collect money owed.” To head off the potential of an employment-related lawsuit, employers should be diligent in training managers on appropriate termination policies, updating various employment forms and policies, and reviewing internal accounting and HR process to ensure they are in compliance with payroll-related labor laws and regulations. As the economy strengthens, employers may find themselves looking to rebuild their workforce. In preparation for growth, they should update employee handbooks and new-hire procedures, train management on proper interviewing techniques, and review all forms, new-hire packets and offer letters for compliance.

Enhancing employee performance. Even as companies begin to hire again, it will probably take some time before staff reach pre-recession levels. This translates to managers still trying to maximize productivity with their smaller workforce. With all the downsizing, reduced bonuses, and increased workload of the past years, it is obvious that employees continue to face a stressful work environment. Furthermore, both employees and management struggle to find a healthy balance between productivity and the decreased manpower. In order to maintain employee morale and commitment to work, employers are challenged to find new ways of motivating and incentivizing their staff to maintain a positive attitude while managing the increased workloads.

In our next post, we will discuss how Human Resources Outsourcing should be considered as a viable business solution to actualize these three employment priorities.

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Posted in Employment Laws, Training and Development | No Comments »

2012 Human Resources Updates: What Employers Need to Know.

Wednesday, January 11th, 2012

We are proud to announce the release of our annual report, highlighting various 2012 labor law updates. The report, titled “2012 Human Resources Updates,” covers a wide range of topics that directly affect employers in the coming year.

Over the past several months, dozens of new employment laws and legislative bills were signed into law that went into effect on January 1, 2012. These changes will directly impact the way employers conduct business, including areas such as payroll tax limits, new employment guidelines, and changing insurance markets.

Ari Rosenstein, CPEhr’s Director of Marketing, explains:

“Not only are employers throughout the country burdened by the weak economy, but they are confused and troubled by the seemingly unending flow of employment regulations. Many small employers recognize it is virtually impossible to stay up to date on a regular basis, especially at the turn of a new year when many new laws go into effect. It is for this reason we publish our annual HR Updates report.”

The report draws from CPEhr’s human resources experience on a wide range of employment, payroll, tax and insurance areas. Topics covered in the report include:

• New employment laws effective in 2012
• The IRS Voluntary Worker Reclassification Program
• Understanding the importance of correct employee/1099 classifications
• New 2012 Tax and 401(k) limits
• The value of employee training and development
• Rising Workers’ Compensation costs and how to mitigate them
• Creative approaches to reduce increasing health care premiums

“Our hope is that employers will read the report and, at the least, become aware of the important changes coming in 2012. At best, we hope they will take the time to investigate the new laws and adjust their business activities accordingly,” said Rosenstein.

 

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Posted in Employee Benefits, Employment Laws, Management, Outsourcing, Payroll and Tax, Training and Development, Workers' Compensation | 1 Comment »

Most Popular Blog Posts of 2011

Monday, January 9th, 2012

As we begin 2012, we wanted to look back at our most popular blog articles posted throughout 2011. It came as no surprise to see that employers were eager to understand the impact of new laws and tax changes that would impact their business in the new year. While many of these were more timely back towards the beginning of 2011, the laws still apply today. Below are the top 10 most popular posts – Enjoy!

#5. The Five Steps of Progressive Discipline

#4. 9 Lawsuits that are Changing the 2011 Landscape

#3. Important Changes to I9 Form Documentation

#2. California Labor Law Updates – 2011

#1. Maintaining Employee Personnel Files

 

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2012 Employment Law Updates, Part 2.

Tuesday, December 27th, 2011

In the second installment of our 2012 Employment Law Updates, our guest Guest Contributor, Stephanie R. Thomas, Ph.D. offers additional insights into what we can expect in the coming year.

Wage and Hour

I’m predicting that wage and hour issues will continue to be a hot-button issue next year. The Department of Labor has launched The Misclassification Initiative and recently has signed a Memorandum of Understanding with the Internal Revenue Service. Under this agreement, the Department of Labor and the IRS will work together and share information to reduce the incidence of employee misclassification, to help reduce the tax gap, and to improve compliance with federal labor laws.

Additionally, eleven states have signed similar memoranda with the Department of Labor’s Wage and Hour Division, and in some cases the Employee Benefits Security Administration, OSHA, OFCCP and the Office of the Solicitor. According to the Department of Labor, these memoranda will enable the Department to share information and to coordinate enforcement efforts with participating states to “level the playing field for law-abiding employers and to ensure that employees receive the protections to which they are entitled under federal and state law.” I’m expecting that more states will enter into similar agreements with the Department of Labor during 2012.

Upcoming State Regulations

These are only some of the regulatory changes we’re likely to see at the federal level during 2012. We haven’t talked about the changes we may see from OSHA, the Employee Benefits Security Administration, and the rest of the federal regulators, and we haven’t mentioned the regulatory changes coming at the state level. California, Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington are just some of the states with labor and employment-related regulatory changes coming.

“Regulation” is the 2012 buzz word.

Regulation is likely to pose a significant challenge for employers in 2012. To meet this challenge, it’s important to stay on top of what’s happening on the regulatory front. Take advantage of the many newsletters, blogs and white papers that will inevitably be written and the webinars that will be held, and check in with the regulators’ websites. The EEOC and the Department of Labor (including all of the sub-agencies) have entire sections of their websites dedicated to compliance assistance. They even offer an email service that will send important updates right to your inbox. Once you fall behind, it can be hard to catch up. Make a New Year’s Resolution to check in routinely on what’s happening, and you’ll be able to get – and stay – compliant.

Guest Contributor:

Stephanie R. Thomas, Ph.D., is the CEO of Thomas Econometrics. She specializes in the quantitative analysis of discrimination. Dr. Thomas has authored numerous papers published in professional journals and regularly speaks to legal and industry groups on litigation avoidance, the use of statistics in litigation, equal employment opportunity and affirmative action compliance issues, and the statistical analysis of employment decisions.

 

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New Employment Regulations Expected in 2012 – Part 1

Monday, December 19th, 2011

Guest Contributor: Stephanie R. Thomas, Ph.D.

As 2011 draws to a close, we naturally start to think about what the coming year has in store. We wonder about the new opportunities – and challenges – 2012 will bring. In past years, I’ve predicted increases in employment-related litigation. This year, the watchword is “Regulation”.

Reducing Barriers to Employment

In light of the unemployment situation in the US during the last three years, the government is eager to get as many people back to work as possible. The EEOC, in particular, has been spending a lot of time looking at barriers to employment for various groups of people. The Commission held hearings to explore the barriers faced by veterans with disabilities and by individuals with mental disabilities. They also explored the barriers to employment created by using unemployment status and arrest and conviction records as candidate screening tools. Furthermore, they examined the prevalence of intentional employment discrimination based on gender, race, national origin or other prohibited basis. If the EEOC believes that employers are engaging in intentional or unintentional discrimination against segments of the unemployed population, then it’s likely that we will see some proposed regulations to reduce or remove these barriers at some point next year.

Proposed Mandatory Hiring Regulations

But the EEOC isn’t the only agency focusing on employment. On December 9, the Office of Federal Contract Compliance Programs (OFCCP) published a proposed rule that would require contractors to set a hiring goal of having individuals with disabilities comprise seven percent of their workforces. The proposed regulatory changes detail specific actions employers must take with respect to recruiting and training individuals with disabilities, accommodations record-keeping and data collection regarding the number and percentage of disabled candidates and hires. According to Secretary of Labor Hilda Solis, “this proposed rule represents one of the most significant advances in protecting the civil rights of workers with disabilities since the passage of the Americans with Disabilities Act.” The OFCCP is accepting comments to the proposed rule through February 7, 2012. I’m expecting that we’ll see some movement on this proposed rule by early summer.

More Documentation Regulations

The OFCCP has also proposed some changes to its scheduling letter that would require employers to produce detailed employee-level compensation data, among other changes. This data would have to be produced for all full time, part time, contract, per diem, day laborers and temporary workers. Under the proposed changes, compensation is defined as the base salary, wage rate and hours worked. Additional compensation or adjustments such as bonuses, incentives, commissions, merit increases, geographic differentials and overtime would be produced as well. The OFCCP is encouraging employers to submit information regarding any other factors used to determine pay, such as educational attainment, prior experience, location, department, function, etc. The proposed changes would also require employers to submit organizational policies to reasonably explain compensation practices. With this new detailed data set, OFCCP is planning on reviewing each employee’s compensation at the individual employee level. The general consensus is that the proposed changes to the scheduling letter will be adopted during the first quarter of 2012.

In part 2 of this series, we’ll view additional regulations and other 2012 labor law updates that are looking to become important employment factors in the coming year.

Guest Contributor:

Stephanie R. Thomas, Ph.D., is the CEO of Thomas Econometrics. She specializes in the quantitative analysis of discrimination. Dr. Thomas has authored numerous papers published in professional journals and regularly speaks to legal and industry groups on litigation avoidance, the use of statistics in litigation, equal employment opportunity and affirmative action compliance issues, and the statistical analysis of employment decisions.

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Posted in Employment Laws, Management | No Comments »

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