Is managing labor law compliance difficult? Absolutely!
A company with at least one employee needs to understand up to 15 federal and state labor laws. A company with 15 employees needs to understand up to 19 federal and state labor laws. A company with 50 employees needs to understand up to 21 federal and state labor laws.
And knowing the law is only part of the battle.
The prediction for 2007 is that employers will face increasing scrutiny at both the state and federal level. Although some of these violations are honest mistakes, ignorance of the law is not a defense, and employers are required to comply with all applicable requirements.
Establishing policies and procedures that comply with the law is key.
Policies and procedures also help employees understand company expectations.
Over the years I have reviewed and enhanced many policies and procedures and have learned that there are common, honest mistakes that are made. Following are two examples I have seen:
Faulty overtime policy:
The Fair Labor Standards Act establishes standards for minimum wage and overtime pay. Recently a lot of attention has been given to the standards surrounding overtime pay. In my experience, one of the biggest areas a company needs to pay particular attention to is their policy on payment of overtime.
Many employers want to prevent employees from working unauthorized overtime, so a policy is developed that “employees must receive approval by the supervisor prior to working overtime.”
The statement on its face is lawful – it can, however, lead to a violation if it is enforced to block payment for overtime. The policy statement may be perceived as indicating an employee will not be paid overtime if he or she did not receive approval. Under the Fair Labor Standards Act, overtime must be paid regardless of whether it was approved ahead of time.
I agree that an employer should have a statement regarding authorization of overtime, in order to avoid employees working overtime unnecessarily. If you want an overtime authorization policy, consider a policy that states:
“An employee will be paid for overtime if the position is classified as ‘nonexempt’ according to federal and state wage and hour laws.
Overtime is paid for all actual hours worked over 40 in one week. All overtime must be authorized by your supervisor. Failure to receive prior approval for overtime may result in disciplinary action.”
This policy statement clearly outlines that the employer pays overtime in accordance with the law and further defines potential consequences if an employee fails to receive approval.
Failure to notify a new employee of conditions of employment:
Employers seem to remember to inform applicants that an offer of employment is contingent upon successfully completing a background investigation or receiving satisfactory references. Yet many employers fail to inform applicants of the Immigration Reform and Control Act of
1986 requirement (on the I-9 form) that applicants considering employment must verify that they are authorized to work in the United States.
I know of two points in the pre-employment pro-cess where an employer can provide this notification. One is on the employment application that the candidate will sign, and the other is contained within the offer of employment letter or form. Employers can include a statement such as:
“I understand that I will need to provide proof of eligibility to legally work in the United States in accordance with all requirements of the Immigration Reform and Control Act of 1986 (I-9 form), which requires new employees to provide documentation of identity and authorization to work in the United States within three days of employment, and the employment offers will be contingent upon providing proof of authorization.”
Providing this information up-front not only keeps an employer in compliance with the law, but it also provides the company with documentation in the event someone does not comply within the three days and employment must end.
Whether an employer decides to invest in developing an entire employee handbook capturing policies and benefits, or just documents critical policies and procedures, is a decision that will likely be driven by the size of the organization. Policies or a handbook should be reviewed by an experienced human resources professional or attorney to make sure the policies are lawful and meet the needs of the employer.
Also, remember compliance does not end with a written document. It is an ongoing process, and employers need to stay abreast of how the law is being interpreted in the court system in order to stay compliant.
I always encourage employers to establish a “policy checkup” each year to insure the documentation is still a “best practice” and in compliance with the interpretation of federal and state labor laws.
Carrie Beers manages the Human Resources Consultant Group at USI New England and has more than 20 years’ experience in HR management. She can be reached at carrie.beers@usi.biz.
