Posts Tagged ‘HR Consulting’

Proactive Measures Employers Should Take to Protect Themselves Against the DOL

Monday, May 17th, 2010

In our last post, guest author Stephanie R. Thomas, Ph.D., discussed the Department of Labor’s new ‘We Can Help’ campaign. In this post, she examines some of the proactive steps employers should take to protect themselves.

Take Proactive Measures Now

The Department of Labor’s ‘We Can Help’ campaign highlights the importance of taking a proactive stance and meeting this challenge head-on. It is more important than ever for employers to review their classification of employees, pay practices and compensation document creation and retention policies. Employers, in conjunction with legal counsel, should perform self-audits to identify any potential problem areas, and take corrective action where required. It’s important to involve legal counsel in the self-auditing process at its inception. There are a variety of privilege issues that need to be addressed, and legal counsel is best positioned to advise employers on these issues to protect both the employer and the employees.

Key areas employers should be examining include:

•    Misclassification of employees as exempt
•    Misclassification of employees as independent contractors
•    Failure to pay otherwise exempt employees on a salary basis
•    ”Off the clock” work
•    Proper calculation of the regular rate of pay
•    Donning and doffing activities
•    Unpaid on-duty meal breaks
•    Miscalculated commissions and bonuses

The U.S. Department of Labor has estimated that approximately 80% of employers are not in compliance with applicable wage and hour laws. The risk of being targeted for a wage and hour lawsuit is now greater than ever. Wage and hour litigation is expected to remain a source of significant exposure to employers well into the future. The old adage “an ounce of prevention is worth a pound of cure” couldn’t be more appropriate. Don’t wait for a lawsuit or an investigation – take action now.

CPEhr Offers DOL Compliance Services

“Take action now” is perhaps easier said than done. Where to begin? With whom to consult? CPEhr’s Human Resources Consulting services offer a turn-key HR compliance system, that will walk you through every step of the process.  From job descriptions and classifications, to payroll worksheet audits and review, CPEhr’s compliance team will help protect you against a DOL audit, and will work vigilantly to remove a claim, should one arise. Contact CPEhr today for more information.

(This guest post was authored by Stephanie R. Thomas, Ph.D. the Director of the Equal Employment Advisory and Litigation Support (EEA/LS) Division of Minimax Consulting. Her division specializes in the application of economics and statistic to employment decisions and employment related issues. Stephanie can be reached at http://www.theproactiveemployer.com.)

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What to Look For When Selecting HR Outsourcing Firm

Monday, April 26th, 2010

If you are at the stage of investigating if a PEO (Professional Employer Organization) or Human Resources Outsourcing firm is right for your company, there are several important factors to take into consideration. An outsourcing relationship can continue for many years, so selecting the right firm is a serious decision that should be given a great deal of thought.

Consider the following criteria when selecting a provider:

Years in Business
PEO firms, and many HR firms, are entrusted to pay payroll, taxes and insurance premiums. Look for a firm that has strong financial credentials, long-term banking relationships and the ability to prove taxes and insurance premiums have been paid timely.

Proven Service Track Record
Stable finances and longevity does not necessarily equate to good human resource practices or customer service. The HRO firm must have a strong team of licensed human resources professionals with a proven track record of assisting clients in all areas of regulatory compliance, safety and benefits.

Size and Diversity of Client Base
The ideal HRO firm will have a large and diverse client base, serving a wide range of industries. The diversification insulates the firm from fluctuations within a particular market and dilutes the risk over many industries. Diversification can take the form of industry, size of employee base, and geographic location. A large, diversified base of clients also adds to the depth of experience of the firm and their ability to service your particular business.

Local Market Presence
Many labor and tax laws vary from state to state. Look for a firm that has expertise in the state in which you do business, and has strong relationships with local vendors and insurance companies. For California employers, this is particularly critical as California regulations differ greatly from federal guidelines. Additionally, a local corporate office will ensure quicker response time and on-site presence.

Flexibility in Service Offering
Many HR firms take the “one size fits all” approach by requiring clients to take all the services offered, from payroll and insurance, to benefits and training. It is important to look for a vendor that is flexible in their offering and is able to customize an HR solution to match your company’s individual needs.

High-Touch Service Model
Many HRO firms follow a high-tech/low-touch approach with services provided primarily through on-line self-service platforms. While this is attractive to many employers, look for a firm that is also available for on-site appearances. It is crucial for the HRO firm to have a qualified team available to meet live with your staff, whether for benefits open enrollment, claims investigations, employee relations, or manager training seminars.

CPEhr: An HR Outsourcing leader for close to 30 years.

Headquartered in Los Angeles, Human Resources Outsourcing firm CPEhr is one of California’s leading Professional Employer Organizations. Founded in 1982, CPEhr has assisted hundreds of clients understand and comply with California’s complex regulatory and insurance systems.

CPEhr began as a small payroll and HR provider, with 10 corporate employees. Over the past two-and-a-half decades, CPEhr has grown to employ close to 90 corporate professionals in the areas of Employment Administration, Labor Law Compliance, Management Training, Safety and Risk Management, Employee Benefits, Retirement Planning, Payroll and Accounting. CPEhr services 15,000 employees at over 300 client locations nationwide.

CPEhr offers a flexible HR Outsourcing solution, wherein you can select from three programs, based on your company’s needs:

  • A PEO Solution offers the ultimate in employer service and protection. CPEhr creates a “Co-Employment” relationship in which they share the employment liability and administration with you.
  • An HRP Solution offers the complete range of services offered under the PEO, without creating a Co-Employment relationship.
  • The HRO Solution enables you to pick-and-chose the exact services needed, in a completely customized relationship.

If you are researching PEO or HRO vendors, contact CPEhr to request a quote for our services.

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Employee Personnel Files – What To Keep and For How Long?

Monday, April 12th, 2010

Record keeping plays an important role in the administration of any organization. It assists in managing human resources and helps prove compliance with government regulations. It also provides the documentation to defend—and even drive—employment decisions. Employers are well aware that various laws require them to keep records covering employment decisions and actions, but how long they are to be kept varies and can be confusing.

Who Should Have Access?

Retention can range depending on the documents from 1 to 30 years, but good judgment and sound business practice may suggest that certain records should be retained longer.

Records should be stored in a safe and secure place so that only authorized personnel have access to them. Just because someone is a supervisor or a manager does NOT mean they should have access to all documents.  In addition, certain files must be separate from personnel files, such as payroll and medical records.  Especially sensitive documents, such as disciplinary actions and investigation information regarding any unlawful or sexual harassment complaints, should be kept secured and apart from normal personnel files with very restrictive access.

Since many employment records contain personal or confidential information about employees and the organization, they need to be discarded properly. Paper records should be shredded or burned and computer files completely erased.

New Hire Applications and Paperwork

When a company seeks to hire an applicant, specific state and federal laws apply to the hiring process. In fact, multiple governmental agencies such as Title VII, FEHA, ADA, and ADEA drive the requirements for handling hiring records. If you specifically advertise for a position, online, in the paper or internally, you must keep copies of ALL ads run, all applications and resumes received in response to the ads whether they are paper or electronic form, and all evaluations of each interview for a period of 2 years.

If you do not hire the individual, all these records must be kept in an applicant file.  The easiest filing format is by month and year.  This way, as the two-year demarcation point passes, you can pull the entire month and shred it. If you do hire the individual, this information should go to the individual’s personnel file.

Personnel files

Employee personnel files contain generic information about the individual, the job and all associated trainings, and interactions in the life cycle of the employee. It is not uncommon that different areas of record keeping overlap, such as a request for reasonable accommodation under the Americans with Disabilities Act. Never keep details regarding the request in the personnel files, but rather reserve the detailed information for the employee’s medical or health files. We will discuss overlapping record keeping in future posts.

The following records must be kept for a period of TWO years:
•    Hiring Records
•    Applications, resumes
•    Pre-employment tests, reference checks
•    Evaluations of interviews
•    Ads for open positions (external)
•    Internal postings of open positions
•    Job orders submitted to employment agencies
•    Applicant file or personnel files

Again, there are state and federal agencies including Title VII, FEHA, ADA, and ADEA that drive these requirements. The personnel files must be kept for a period of TWO years after the end of the employment relationship in a very secured location.

•    Employee Personnel Files
•    Job title, description and classification
•    Offer letter
•    Promotions, demotions, and performance evaluations
•    Training, testing including certificates
•    Disciplinary notices, attendance records
•    Discharge, transfer, lay-off and recall files
•    Acknowledgments of policy, handbook
•    Request for reasonable accommodations

If you have any questions or concerns regarding your employee files record keeping, feel free to contact us. CPEhr’s Human Resources Consulting team is available to work on-site to conduct a complete audit of your documentation and record keeping practices.

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Government Announces Plans to Crackdown on Illegal Independent Contractor Usage

Monday, December 7th, 2009

If you are like most employers, the chances are you use Independent Contractors. Employers engage the services of Independent Contractors (IC’s) instead of employees for numerous reasons. Mostly, to save money on a range of employment costs, such as:

  • federal and state tax,
  • workers compensation insurance,
  • unemployment insurance,
  • employee benefits,
  • overtime, vacation and sick pay.

However, now more than ever, employers must be aware that federal and state lawmakers are beginning to crack down on employers who hire ICs that do not meet the strict IRS requirements.

What are the guidelines to be an Independent Contractor?

The following are excerpts from the IRS website, Section 762 – Independent Contractor vs. Employee:

  • Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done through instructions, training, or other means.
  • Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker’s job. This includes:
  1. The extent to which the worker has unreimbursed business expenses
  2. The extent of the worker’s investment in the facilities used in performing services
  3. The extent to which the worker makes his or her services available to the relevant market
  4. How the business pays the worker, and
  5. The extent to which the worker can realize a profit or incur a loss
  • Type of Relationship covers facts that show how the parties perceive their relationship. This includes:
  • Written contracts describing the relationship the parties intended to create
  • The extent to which the worker is available to perform services for other, similar businesses
  • Whether the business provides the worker with employee–type benefits, such as insurance, a pension plan, vacation pay, or sick pay
  • The permanency of the relationship, and
  • The extent to which services performed by the worker are a key aspect of the regular business of the company

Government crack-down

As the government is looking for ways to bring in revenue in a down-economy, they are paying serious attention to the losses incurred by the usage of ICs. Reports estimate the misuse of ICs lowers income tax revenues by about $4.7 billion annually. In Illinois, for example, the  University of Missouri–Kansas City Department of Economics estimates that from 2001 through 2005, the state lost $124.7 million PER YEAR year in income taxes as a result of IC misclassification by employers.

In August, Congress began reviewing several bills that tighten restrictions on the use of ICs and exact tougher penalties on employers who bend the rules. The IRS also announced plans to randomly audit six thousand businesses nationwide to curb abuse.

Don’t take shortcuts

If your company engages the use of ICs, don’t let the lure of bypassing a few tax and insurance dollars distract you from the real-life risks at hand. You should take the time to seriously review your IC relationships and determine if they do, in fact, match the IRS guidelines. If you are uncertain where to begin, there are professional human resource outsourcing and consulting firms that specialize in these employment relationships and can guide you to make the right decision for your company.

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The New Minimum Wage – Do You Know What it Is?

Tuesday, June 30th, 2009

Effective July 24, 2009, the Federal Minimum Wage will increase from $6.55 to $7.25 per hour, representing more than a 10 percent increase. All employers, regardless of size, are required to post the most recent Minimum Wage poster (that went into effect on January 16, 2009) even if your state’s minimum wage differs.

If  you employ staff in California, the new law will not affect your state-based employees, as the California minimum wage is $8.00. However, be aware that employees residing out of state are subject to their states’, or federal, guidelines.

The Federal Minimum Wage is governed by the Fair Labor Standards Act of 1938. The FLSA establishes minimum wage, overtime rules, record-keeping requirements, and youth employment standards affecting employees. Remaining compliant with the myriad of FLSA requirements is daunting, as employers often confuse the federal guidelines with their state rules.

If you are concerned about compliance, contact an HR Consulting firm who can guide through the FLSA maze.

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