November 5, 2020 | HR Compliance | Posted by Ascentis
It's Time to Reduce Risk and Automate Your Compliance Processes
On its face, compliance seems as though it should be a relatively cut-and-dried issue. After all, every business is required to follow certain rules and regulations, so shouldn’t that be the end of the discussion? In reality, though, staying compliant with all of the federal, state, and local laws and guidelines governing your organization often takes an active, coordinated approach.
The events of 2020 have made compliance a bigger challenge than ever, as factors like remote work, flexible scheduling, increased safety precautions, and pandemic-related layoffs and rehires have further complicated an already complex slate of requirements. All of this makes it essential for employers to explore their options for automating regular tasks and functions that could put their operations at risk of noncompliance and the substantial fines and penalties that go with it.
Know the RisksBeyond the obvious risks of fines and sanctions for noncompliance, businesses also face a loss of reputation that could be even more damaging. Word spreads quickly in the era of social media. When a company violates the rules or doesn’t provide adequate protection for its employees, intentionally or not, there are more avenues for whistleblowing than ever before. For repeat offenders, there is also a substantial risk of class-action lawsuits that can do major financial and reputational harm to an organization.
The risks to employers are magnified in the COVID-19 era, as employees value both workplace safety and economic security more than ever. Studies show that employees who witness compliance violations in the workplace are twice as likely to leave a company. When hiring eventually ramps back up after the pandemic, quality employees will likely think twice about applying for roles with companies with a record of noncompliance.
Stay Up to Speed on Wages and HoursIt’s all too easy to fall into the trap of thinking that good intentions are enough to keep an organization on the right side of compliance. The fact is that a large percentage of violations are the result of avoidable errors rather than intentional wrong-doing. That makes sense, as laws dictating wage and hour requirements are constantly evolving and vary widely from state to state and even city to city. Regardless, a violation is a violation, and businesses that make honest mistakes have to deal with the same consequences as ones who try to game the system.
In what the Department of Labor’s lead solicitor described as an “epidemic,” 79% of organizations investigated by the U.S. Department of Labor in 2015 had committed some degree of wage and hour violations. Without knowing the specifics of each case, it still seems reasonable to assume that at least some of those violations could have been avoided with a stronger reliance on technology and automation. Employing HR and payroll software that automatically checks your regular processes for compliance with the most recent updates to the Fair Labor Standards Act (FLSA), state and local minimum wage requirements, and regulations governing overtime and paid time off can go a long way toward avoiding noncompliance due to human error.
Understand Your Benefits ResponsibilitiesThere’s a frequently cited statistic in the HR world noting that around 80% of workers say they would value expanded benefits over increased pay. That only underlines how important it is to stay compliant with legally mandated employee benefits. The most pressing of those is likely the Affordable Care Act (ACA), which ties an employer’s healthcare benefits responsibilities directly to the number of workers a business employs and the number of hours each individual works per week. The ACA also requires businesses to file IRS forms 6055 and 6056 to ensure that employees are being properly covered.
Other key compliance considerations related to benefits include the Health Insurance Portability and Accountability Act (HIPAA), which in part ensures that employees can maintain uninterrupted coverage when changing jobs, and the Consolidated Omnibus Budget Reconciliation Act (COBRA), which is designed to provide healthcare to workers who have lost their eligibility. All of these healthcare regulations involve complicated tracking of hours worked, changes in status, workforce size, and other factors. This is another situation that carries a strong risk for human error if handled manually, or if various functions are handled by multiple departments. An automated, software-based approach with a centralized dashboard can help eliminate many of those risk factors.
Manage Your Time Off and Leave PoliciesWhile employers have some flexibility around the amount of time off they allow their workers, there are also some hard-and-fast rules to abide by. At the federal level, the Family and Medical Leave Act (FMLA) sets specific standards for the minimum amount of time off employees are afforded for medical emergencies, child births or adoptions, caring for ailing family members, and more. Most states create similar, and in many cases stricter, protections for medical and family leave.
Each state also sets its own standards for sick leave and paid time-off, and the requirements vary widely from state to state. This can pose some problems for employers with workers in multiple states, especially in an era where more and more employees are working remotely. Setting workable leave policies for your entire workforce can be a challenge without the benefit of a software solution that ensures they are applied fairly and consistently across your business.
Staying compliant with all applicable federal, state, and local regulations is a necessary consideration for organizations of all sizes. Fortunately, there are now more compliance-oriented technological tools at your disposal than ever before.
Learn more about how Ascentis software solutions can keep you in compliance and let you focus on the tasks that keep your business growing.