The 12 Months of HR Compliance


8 minute read

The 12 Months of HR Compliance

Now that we are all off and running in 2018, we want to warm your heart with a take on an old favorite. Instead of the "12 Days of Christmas," we present "The 12 Months of HR Compliance," a (hopefully) catchy way to make sure your organization is in compliance with key employment issues that expose employers to liability. With that said, let's begin.

In the first month of HR Compliance, my employment lawyer said to me: "Review your sexual and discriminatory harassment policy and program, and schedule harassment compliance training."

The issue of sexual harassment has received a great deal of attention in recent months. Employers that do not take steps to prevent sexual and discriminatory harassment from occurring and/or do not promptly address it when it does occur risk exposure on a number of fronts, ranging from loss of goodwill to legal liability. In March, review your harassment compliance policy and program, and schedule harassment compliance training for all employees.

In the second month of HR Compliance, my employment lawyer said to me: "Review your exempt and non-exempt employee classifications."

Determining which employees are exempt from the minimum wage and overtime requirements of state and federal law can be tricky. Salaried does not necessarily mean exempt and, in fact, many salaried employees are entitled to overtime pay. The failure to properly classify employees can lead to significant liability, including unpaid overtime and/or minimum wage, double damages and attorneys' fees. In April, review your exempt and non-exempt employee classifications to assess compliance with both federal and state law.

In the third month of HR Compliance, my employment lawyer said to me: "Review your restrictive covenants."

To ensure that an employer is protecting its confidential information, business relationships and other legitimate business interests to the fullest extent allowed by applicable law, non-competes, non-solicitation covenants and confidentiality agreements must be carefully written and tailored to the employer's industry, business and practices, as well as for the particular employee's role within the business. The law in this area is continually changing and the laws of each state differ. In May, review the restrictive covenants contained in the agreements you require employees to sign to assess enforceability in the state(s) where your employees work.

In the fourth month of HR Compliance, my employment lawyer said to me: "Take a hard look at your workers who are classified as independent contractors."

Many employers believe that if they enter into an independent contractor agreement with an individual and/or if an individual requests to be "a 1099," that person is automatically an independent contractor. However, this decision is not left to employers. Federal and state government entities such as the IRS, Department of Labor and state agencies that administer unemployment laws are charged with assessing whether individuals are properly classified. Employers that misclassify employees as independent contractors risk significant financial exposure. There are numerous factors that are used to determine whether an individual is an independent contractor or an employee, and each government agency utilizes its own unique test. In June, take a hard look at your workers whom you have classified as independent contractors to ensure that you have done so in compliance with applicable laws.

In the fifth month of HR Compliance, my employment lawyer said to me: "Review your leave of absence policies and procedures."

There are a variety of federal, state and local laws that govern whether an employee is entitled to a leave of absence, and these intertwining laws can be difficult to navigate. The nature and extent of medical leave, workers' compensation leave, and leave under federal and state disability laws to which an employee is entitled can conflict. Understanding how they can work together is critical to ensuring legal compliance. In July, review your leave of absence policies and procedures in order to gain an understanding of the interaction among applicable laws.

In the sixth month of HR Compliance, my employment lawyer said to me: "Review your accommodation policies and procedures."

Employers are required to provide reasonable accommodations to qualified individuals with disabilities if such accommodations would allow them to perform the essential functions of their jobs. In addition, in certain circumstances, an employer may be required to accommodate an employee's sincere religious beliefs. A reasonable accommodation may include a change to the employer's policies or work environment or how a job is performed. It also may include an extension of a leave of absence provided under another federal or state law. Typically, but not always, some type of accommodation can be provided for a qualified individual unless it poses an undue hardship on the business. In August, review your accommodation policies and procedures for compliance with applicable laws.

In the seventh month of HR Compliance, my employment lawyer said to me: "Review your employee handbook."

Smart employers review their employee handbooks once a year to make sure that they are up to date with developments under federal, state and local laws, as well as to ensure that policies are consistent with actual business practices and are being enforced. As new laws are enacted and existing laws are interpreted by courts and government agencies, make sure that your handbook reflects such developments in all states and locales where your employees work. An employee handbook also is an important way for an employer to set conduct expectations for which employees will be held accountable. In September, review your employee handbook to assess whether it is current, with respect to changes in both the law and your actual practices.

In the eighth month of HR Compliance, my employment lawyer said to me: "Review your discipline, performance management and termination processes, and schedule management training."

One of the greatest mistakes an employer can make is failing to document disciplinary and performance issues and the reasons for termination decisions. Managers often lack training regarding how and when to document performance and disciplinary issues, and many employers assume that an employee's at-will status will justify termination of employment in all instances. While the law of most states does allow employers to terminate employees for any lawful reason, juries often determine liability based on what they consider to be fair. If you are sued for wrongful termination, make sure that you can demonstrate why you terminated an employee and have documentation supporting your decision. More importantly, communicating expectations in terms of performance and conduct, communicating when an employee fails to meet those expectations and documenting those communications can avoid surprises and allow employees to feel that they have been given a fair opportunity to succeed. In October, review your discipline, performance management and termination processes, schedule management training and communicate expectations.

In the ninth month of HR Compliance, my employment lawyer said to me: "Review your procedures for conducting workplace investigations."

At some point, every employer will need to conduct a workplace investigation, whether with respect to allegations of harassment or discrimination, workplace violence, theft or other misconduct. Conducting a prompt and thorough investigation can minimize legal exposure, as well as allow employers to address unacceptable workplace conduct. In November, review your policies and procedures for conducting workplace investigations.

In the tenth month of HR Compliance, my employment lawyer said to me: "Review your applications and hiring procedures."

In December, get ready for the new year by making sure that your application and hiring procedures are up to date. Does your application ask about criminal convictions or salary history? In some jurisdictions, this is no longer legal. Have all personnel who participate in the interview and hiring process been trained regarding the questions they can lawfully ask? Asking illegal questions can create exposure for your business. In December, review your applications and hiring procedures to ensure they are up to date and legally compliant.

In the eleventh month of HR Compliance, my employment lawyer said to me: "Review your 'form' separation agreements."

Many employers are unwittingly using separation agreements that are outdated or are not customized to fit their actual business practices, policies and benefit plan requirements. It is important to review your standard separation agreements annually to ensure they are written in a manner that provides your organization with the greatest legal protection and do not contain any illegal provisions that may taint the enforceability of the release. The last thing an employer wants is to be on the receiving end of a claim that wasn't properly released after the employer's severance payment has already been deposited. In January, review your form separation agreements to make sure you are providing your business with the greatest legal protection.

In the twelfth month of HR Compliance, my employment lawyer said to me: "Review your personnel files."

Employers are not required to maintain personnel files, but if such files are maintained, they should contain certain information such as job applications and the acknowledgement of receipt of the employee handbook and other policies, as well as performance appraisals and disciplinary documentation. Other information, such as employee medical records and Forms I-9, should be maintained separate from employee personnel files for a variety of reasons. Failing to properly maintain personnel records can be problematic in the event of an audit by a regulatory agency or in the context of a dispute with a current or former employee. In February, review your personnel files for compliance with best practices and applicable laws.

We hope you will use our 12 Months of HR Compliance as a reminder of how, one month at a time, you can keep up with many of the important issues for your organization. Doing so will allow you to implement best practices and minimize exposure for you and your business. For additional information or assistance with any of the matters discussed above, contact your Much Shelist attorney.