Whether you have a very small team in your office, or lead a business that has thousands of employees, it’s incredibly important to ensure that your venture is compliant when it comes to employee relations. This includes hiring workers, as well as governing their work and relevant documentation when they’re on the job.
For many small-business owners in particular, legal compliance can be a challenging and overwhelming task that often isn’t outsourced. As a result, it can be something that you struggle to get your head wrapped around. Unfortunately though, if you mess up when it comes to compliance, your business can face fines and other major penalties which cause issues. To avoid this, it is a must to know what you need to do to be compliant. If you’re keen to get some tips in this area, read on for some ideas you can follow today.
Compliance starts before you have even hired a new employee. For example, when you post a job listing, it is essential that you avoid any type of discriminatory language. Federal laws are in place to ensure Equal Employment Opportunity for everyone, and prohibit any type of employment discrimination that occurs not only intentionally, but also through seemingly neutral policies and practices which have a disproportionately adverse effect on members of a protected group.
This “Disparate Impact” rule governs employment policies and ads which appear okay at first but which may actually exclude certain groups through effect rather than intent. For instance, job ads which mention they’re “seeking new graduates” or looking for “energetic” people can be red flags because, while they don’t directly refer to the age of candidates, they may in effect discriminate against older workers.
It is important to be aware that the Federal employment laws prohibit job discrimination based on a range of factors. Some of these include race, sex, color, age, religion, national origin, disability, and genetic information.
When putting together job advertisements, you must also be careful about the type of information you ask applicants to provide. Unless there is a good, legal reason why you ask for something for a particular job, you can’t request that candidates let you know things such as their date of birth, marital or family status, or religious affiliations. While on occasions there may be a legal reason for this type of request, it is not common at all, and something that you should watch out for.
Next, when setting up new positions, it is necessary to properly classify them according to whether they are “Non-exempt” or “Exempt.” There are a few things that this classification, as governed by the Fair Labor Standards Act (FLSA), affects.
For instance, non-exempt employees are covered by FLSA rules and regulations, while exempt workers are not. If employees are non-exempt, they work on an hourly basis and must be paid at least the federal minimum wage for every hour they work. They must also earn overtime for all hours over 40 worked in a given week; and receive a meal break. There is no set time duration for this break, as it varies from state to state.
As for exempt employees, they receive a salary rather than an hourly wage, and are excluded from overtime regulations, minimum wage rates and other rights and protections which are afforded to non-exempt employees. You’ll find that typically only professional, supervisory, executive or outside sales positions are exempt ones.
Another vital part of employment compliance is completing, lodging (on time), and holding onto all the necessary forms which are involved in hiring staff members. As an example, the I-9 form is used to verify the identity and authorization for employment of people who are hired in the U.S. The form must be filled out by both employees and employers (or a firm’s authorized representatives), and it needs to be lodged within three days of a new worker’s start date. Be aware that missing this strict deadline can result in fines.
To be compliant, the I-9 form has to have all the proper dates and signatures, and be accompanied by the necessary supporting documentation. New hires should be given the list of acceptable supporting documents that they can choose from; employers cannot specify which ones are acceptable. After an employee has been terminated, firms must destroy their I-9 form either three years after the person began working for the employer, or within one year of their termination date (whichever comes later).
When it comes to withholding forms, the W-4 tax form (also known as the Employee’s Withholding Allowance Certificate) is very important. The W-4 comes from the Internal Revenue Service (IRS) and is completed by an employee to show their employer what their tax situation is when it comes to status, exemptions, and the like. This will affect how much tax is withheld from every pay check they receive. Employers are not to guide or instruct employees on what to fill in on this form; workers must input the relevant withholding information of their own accord, as per their own personal situation.
The W-4 form must be completed straight after a person is hired, and before they receive their first pay check. While the most crucial time for workers to fill in the form is when they first start at a firm, please note that the documentation must also be kept current at all times. As such, it pays to get employees to submit a new W-4 each year so that the information on file is up to date and the business maintains compliance.