A big part of the work performed by human resources involves compliance. Many laws and regulations govern how employers treat their workers, what a standard workweek looks like, how people get paid, and how to classify different types of employees.
Because there are so many different HR regulations, it can be challenging for businesses to keep up. HR already has to worry about a lot of other employee considerations, like benefits management, payroll, timekeeping, and conflict resolution.
Many employers may not know what’s required of them and may make common mistakes when trying to implement policies. Let’s walk through five common pitfalls for HR compliance and how Resourcing Edge can step in to help.
Common HR Regulation Pitfalls to Avoid
It’s easy to make mistakes in the world of compliance given all the different laws you need to follow. One way to check in with how you’re doing is to look over these common mistakes that HR professionals make when following HR regulations and compliance best practices:
1. Including an FCRA Notice in the Employment Application
The Fair Credit Reporting Act (FCRA) was created to regulate how consumer information is used, including employment background checks. If you work with a consumer reporting agency (CRA) to conduct these checks on job candidates, you need to disclose to them that you might get a consumer report for them.
Additionally, it’s not enough to lump the report in with other information. They need to sign a disclosure form, which has to be separate from the employment application. Frequently, an employer errs by including this form within the application.
It can’t be buried in the other documents, though, since it’s important that applicants understand what they are signing. Candidates may miss the disclosure when they’re trying to sift through everything else in the application.
2. Asking Questions About Protected Characteristics of an Employee During the Hiring Process
In interviews with candidates, you can’t ask certain questions that would reveal personal details about them. These questions are protected by several laws that prohibit workplace discrimination. Employers cannot discriminate based on someone’s age, disability, genetic information, pregnancy, race, religion, sex, and other characteristics.
Laws enforced by the Equal Employment Opportunity Commission (EEOC) include the Age Discrimination in Employment Act, the Equal Pay Act, the Pregnancy Discrimination Act, the Americans with Disabilities Act, the Civil Rights Act, the Rehabilitation Act, and others. You cannot ask job candidates questions that relate to any of their personal characteristics because of these discrimination protections.
For example, you can’t ask someone what their ethnicity or age is, and you can’t ask about their family or marital status. It can be tricky, but avoid any question that would even hint at these details. Of course, it isn’t your fault if someone happens to disclose some of this information to you, but you cannot ask for it.
3. Failing to Display Required Policies and Compliance Information
Acts like the Fair Labor Standards Act (FLSA) and the Family Medical Leave Act (FMLA) require that places of business display regulatory compliance details in their establishments. All private, federal, state, and local government employers have to post employee rights under the FLSA, and the Department of Labor provides printable posters for this purpose.
Depending on the classification of a company, you may also have to post information about the FMLA, the Occupational Safety and Health Act (OSHA), the Employee Polygraph Protection Act Notice (EPPA), and others. Many employers, unfortunately, overlook these requirements and could face penalties or risks as a result.
4. Failing to Follow Wage and Hour Regulations
The FLSA also outlines guidelines for work in the U.S. All companies have to carefully read through these regulations and set up policies that address them. Guidelines include:
- The federal minimum wage: The minimum wage for the nation is currently $7.25, though states can also set their own.
- Overtime pay requirements: Covered nonexempt workers must receive overtime pay, which cannot be less than one and a half times the regular rate, for hours worked over the standard 40 hours per week.
- Recordkeeping requirements: In addition to posting the FLSA requirements mentioned above, employers must also keep detailed pay and time records.
- Youth employment guidelines: Minors cannot be employed in conditions that put their health, well-being, or educational opportunities at risk.
These guidelines must be carefully followed for employers to stay compliant. It’s best to create an employee handbook that outlines all policies of the company so employees can have one reference point, and there is no question about expectations and requirements at work.
5. Incorrectly Categorizing Employees
Some employers may want to categorize employees as independent contractors to avoid having to provide benefits like health insurance, workers’ compensation insurance, or payroll tax withholding, but it’s important that any regular employees are categorized as such to avoid penalties, legal issues, or tax issues.
On the other hand, independent contractors are workers who may provide one-time or ongoing services to the company but who are not considered regular employees. They fill out a W-9, as a vendor would, and receive tax form 1099 to report compensation instead of the W-2 that regular employees receive.
How to Stay Compliant With Resourcing Edge
There are many different areas of compliance employers must consider. To make things more confusing, all states have their own set of employment laws and regulations to follow. This makes it hard for business owners to know what they should implement to stay compliant with both federal and state laws.
Resourcing Edge, though, helps you ensure your business isn’t committing these common pitfalls of HR regulations. We are a PEO that delivers a range of HR services, including risk management and compliance services. We help with risk assessments, claims reporting, workers’ compensation, state and federal reporting, OSHA compliance assistance, and much more.
We’ll help you round out human resources with benefits, payroll, technology, and recruiting services as well.
Contact Resourcing Edge or sign up today to get started with better compliance practices.