Category: HR Compliance

5 most frequent HR mistakes and how to avoid them

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Human Resources (HR) plays a critical role in managing an organization’s most valuable asset—its people. However, HR professionals can sometimes make mistakes that may have significant consequences for the organization. Here are five common HR mistakes and suggestions on how to avoid them:

  1. Inadequate Communication:
    • Mistake: Poor communication with employees can lead to misunderstandings, decreased morale, and a lack of trust.
    • Avoidance: Implement clear communication channels, regularly update employees on policies and changes, and encourage an open-door policy. Use various communication tools, such as newsletters, meetings, and emails, to keep everyone informed.
  2. Inconsistent Application of Policies:
    • Mistake: Inconsistency in applying HR policies and procedures can lead to legal issues and employee dissatisfaction.
    • Avoidance: Ensure that HR policies are well-documented, easily accessible, and consistently enforced. Provide training to managers and HR staff to ensure a unified understanding and application of policies.
  3. Insufficient Employee Development:
    • Mistake: Neglecting employee development can lead to a stagnant workforce, decreased job satisfaction, and higher turnover rates.
    • Avoidance: Implement robust training and development programs to help employees enhance their skills. Encourage ongoing learning and provide opportunities for career advancement. Regularly assess and address the training needs of employees.
  4. Ignoring Workplace Diversity and Inclusion:
    • Mistake: Neglecting diversity and inclusion initiatives can lead to a lack of innovation, increased turnover, and potential legal issues.
    • Avoidance: Develop and enforce policies that promote diversity and inclusion. Foster a workplace culture that values and respects differences. Provide diversity training and regularly assess and update diversity initiatives to ensure their effectiveness.
  5. Ineffective Performance Management:
    • Mistake: Poorly managed performance reviews can result in demotivated employees, talent loss, and legal challenges.
    • Avoidance: Train managers to conduct effective and constructive performance reviews. Implement regular feedback mechanisms, set clear performance expectations, and provide resources for employees to improve. Encourage ongoing communication between managers and employees to address concerns promptly.

To avoid these HR mistakes, it’s crucial for HR professionals to stay informed about industry best practices, continuously evaluate and improve their processes, and be proactive in addressing issues before they escalate. Regularly seeking feedback from employees and stakeholders can also help identify areas for improvement in HR practices.

Why Hire a online Dedicated HR Manager program system for 2024

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Hiring an online dedicated HR manager program system for 2024 can offer numerous advantages for businesses looking to streamline their human resources (HR) processes. Here are several reasons why investing in such a system might be beneficial:

  1. Efficiency and Automation:
    • Online HR systems automate many routine and time-consuming tasks such as payroll processing, leave management, and employee onboarding. This improves efficiency and allows HR professionals to focus on more strategic and value-added activities.
  2. Time and Cost Savings:
    • Automation reduces the time spent on manual tasks, enabling HR staff to allocate their time more effectively. This can result in cost savings as fewer resources are needed for administrative tasks.
  3. Accurate Data Management:
    • Dedicated HR systems ensure accurate and up-to-date data management. This helps in maintaining accurate employee records, tracking performance metrics, and ensuring compliance with regulations.
  4. Employee Self-Service:
    • Many modern HR systems provide self-service portals for employees. This allows them to access and update their information, submit leave requests, and view pay stubs, reducing the administrative burden on HR.
  5. Compliance and Reporting:
    • HR systems often come with built-in compliance features, helping organizations adhere to labor laws and regulations. Additionally, they provide reporting tools that facilitate data-driven decision-making.
  6. Talent Acquisition and Management:
    • Online HR systems often include tools for recruiting and applicant tracking. These systems can help streamline the hiring process, manage resumes, and track candidate progress.
  7. Performance Management:
    • Performance appraisal and management modules in HR systems assist in setting goals, tracking employee performance, and conducting regular assessments. This can contribute to employee development and organizational success.
  8. Remote Work Support:
    • As remote work becomes more prevalent, having an online HR system facilitates the management of remote teams. It enables communication, collaboration, and ensures that HR processes are accessible from anywhere.
  9. Security and Data Protection:
    • Online HR systems typically come with robust security features to protect sensitive employee data. This is crucial for ensuring compliance with data protection regulations.
  10. Scalability:
    • A dedicated HR system can grow with your business. Whether you’re a small startup or a large enterprise, these systems are often scalable to accommodate changing organizational needs.
  11. Employee Engagement:
    • Some HR systems include features to measure and improve employee engagement. This can be essential for maintaining a positive work environment and reducing turnover.
  12. Integration with Other Systems:
    • Many HR systems can integrate with other business systems such as accounting software, time and attendance systems, and enterprise resource planning (ERP) systems, creating a more cohesive and efficient business environment.

Investing in an online dedicated HR manager program system for 2024 can enhance overall organizational effectiveness, improve employee satisfaction, and contribute to the long-term success of your business. It’s important to carefully assess the specific needs of your organization and choose a system that aligns with your goals and requirements

Navigating Compliance, Employment Law, Ethics, and Legal Frameworks in the Workplace

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In today’s complex business landscape, organizations must prioritize compliance with employment law, ethics, and legal frameworks to ensure a fair and ethical working environment. Compliance encompasses adhering to the laws and regulations that govern various aspects of employment, such as hiring, wages, discrimination, and workplace safety. Moreover, ethical considerations play a critical role in fostering a positive workplace culture and maintaining the trust of employees, customers, and stakeholders. This article explores the importance of compliance, employment law, ethics, and legal frameworks in the workplace and provides insights into how organizations can navigate these areas effectively.

employment opportunity laws & ethics
I. Compliance in the Workplace
Compliance refers to the adherence to laws, regulations, and internal policies that govern employment practices. It ensures that organizations meet their legal obligations and maintain fair and ethical treatment of employees. Compliance covers a wide range of areas, including:
1. Hiring practices: Organizations must comply with equal employment opportunity laws, which prohibit discrimination based on race, gender, age, religion, disability, or other protected characteristics during the hiring process. They must also follow proper procedures to verify employment eligibility and avoid illegal practices such as hiring undocumented workers.
2. Wage and hour laws: Compliance with wage and hour laws is crucial to prevent wage theft and ensure fair compensation for employees. This includes adhering to minimum wage requirements, overtime regulations, and accurately recording hours worked.
3. Workplace safety: Organizations must comply with occupational health and safety regulations to provide a safe working environment for employees. This includes identifying and mitigating hazards, providing necessary safety training, and maintaining records of incidents and injuries.
II. Employment Law and its Significance
Employment law encompasses the legal framework that governs the relationship between employers and employees. It protects the rights and interests of both parties and ensures a fair and equitable work environment. Key areas covered by employment law include:
1. Anti-discrimination laws: Employment laws prohibit discrimination based on various factors, such as race, gender, age, religion, disability, and sexual orientation. It ensures that employees are treated fairly and have equal opportunities for advancement.
2. Labor rights and protections: Employment law protects employees’ rights to fair wages, benefits, and working conditions. It covers areas such as working hours, leave entitlements, and protection against unfair dismissal.
3. Collective bargaining and union rights: Employment law also governs the rights of employees to form unions, engage in collective bargaining, and participate in strikes or other industrial actions to protect their interests.
III. Ethics in the Workplace
Ethics form the foundation of a positive workplace culture and are integral to building trust and maintaining a good reputation. Ethical considerations in the workplace include:
1. Integrity and honesty: Organizations should promote a culture of integrity and honesty, fostering trust among employees and stakeholders. Ethical behavior includes transparency in financial matters, accurate reporting, and avoidance of conflicts of interest.
2. Respect and fairness: Treating employees with respect, fairness, and dignity is essential for a healthy work environment. This involves providing equal opportunities, valuing diversity, and maintaining a zero-tolerance policy towards harassment or discrimination.
3. Social responsibility: Ethical organizations consider the impact of their actions on broader society. They engage in sustainable practices, support community initiatives, and adhere to ethical sourcing and manufacturing standards.

New Rules on Arbitration for Sexual Harassment Claims

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  • Under a new law, employers can no longer force employees into arbitration on claims of sexual assault or sexual harassment. 
  • This new law invalidates previously signed arbitration agreements with respect to claims of harassment or assault that arise after the law takes effect. 
  • A strong anti-harassment program is your best deterrent and your best defense against these types of claims.


Last month on March 3, President Biden signed an amendment to the Federal Arbitration Act which upends the table on sexual harassment claims. This legislation was initially called the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Claims Act of 2021.” EFASASHCA doesn’t really roll off the tongue, so we’ll call it “the Act.” Up until now, many employees who experienced sexual harassment were forced into arbitration. But under this new law, they can have their day in court.

Employers prefer arbitration for several reasons. Among them, employees can’t shop for the most sympathetic jurors since the case is only heard by the arbitrator. It’s also less expensive than going to court. While plaintiffs can still win in arbitration, punitive damages are rare.

This model has another big advantage for employers: secrecy. Arbitration takes place behind closed doors. Additionally, settlement agreements almost always come with a confidentiality clause. So, an employee who has been harassed and gone through the arbitration process can’t discuss it with coworkers, prospective employers, or the media. This reduces the pressure on the employer to improve their culture and prevent future issues.

This new law prevents employers from requiring arbitration of these claims. But it doesn’t just apply going forward– it’s also retroactive. This means employers can’t even enforce current arbitration agreements around sexual harassment after the law takes effect, even though an employee willingly agreed to it.

So, what’s an employer to do now?

Many employers don’t use arbitration agreements in this way. Some who did use them also had good harassment prevention policies. But some employers relied on forced arbitration to provide cover for unchecked sexual harassment, considering this a simpler solution than changing their workplace culture. Employers who take that approach will now need to seriously rethink their policies.

Your company might have relied on forced arbitration or not. Either way, there are some things you can do to manage the risk of sexual harassment claims:

1. Develop clear, thorough harassment prevention policies.  

Draft policies in plain English. Share those policies with each employee and collect signed acknowledgments. Train on the policies on a regular schedule. When talking about sexual harassment, include a variety of examples – don’t just cite quid pro quo and physical assault.

2. Maintain clear, multi-channel complaint policies and procedures. 

Give your employees the ability to report harassment to more than just their manager. Their boss might be the harasser or could hold a bias. You might build a system where other managers, HR Specialists, or even an outside service can field these complaints. Ensure that anyone who has been named as a receiver of complaints has been trained on how to handle the complaint once they receive one.

3. Respond to complaints systematically, quickly, and thoroughly. 

Have a comprehensive plan for what to do when you receive a complaint. You must be able to prioritize and investigate the situation immediately. The speed and depth at which you handle these matters is important. Having a plan in place ensures that you do right by your employee and minimizes long term disruptions to your business.

4. Train your employees. 

Some states require that you train your employees, but it’s considered best practice for businesses everywhere. Remember that training isn’t shelf stable. You’ll need to reinforce this information periodically. This isn’t just a way to protect your business. It also protects employees from behaving in ways they may not realize are out of line.

5. Train your managers. 

Don’t forget that managers are employees too, but their authority exposes you to even greater liability if their behavior is problematic. Managers should know how these policies affect them as employees. They should understand how their specific roles present additional risks and expectations.

Managers should also be aware of their role in mitigating harassment among others. Even a strong harassment prevention program is worthless if managers don’t understand what to do with a complaint. Investigating complaints doesn’t have to be complicated. It does, however, need to be done quickly, thoroughly, without bias, and with the right documentation.

In conclusion

For many employers, this change won’t have much impact. But for those who have relied on forced arbitration in the past, it’s time to reevaluate your approach. You’ll need to focus more on preventing sexual harassment rather than simply containing its effects. The tips we outlined above can help you do both of those things. Together, they reduce your risk of devastating lawsuits, PR fallout, and disruptions to your business. They also help ensure that your workplace is a safe and welcoming environment for employees.

COVID-19 Vaccine Mandate News and FAQ

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COVID-19 Vaccine Mandate News and FAQ

The President’s COVID-19 Action Plan

On September 9, 2021, President Biden released his COVID-19 Action Plan requiring all employers with 100 or more employees to ensure their workers are vaccinated or tested weekly. According to the president, “The Department of Labor’s Occupational Safety and Health Administration (OSHA) is developing a rule that will require all employers with 100 or more employees to ensure their workforce is fully vaccinated or require any workers who remain unvaccinated to produce a negative test result on at least a weekly basis before coming to work. OSHA will issue an Emergency Temporary Standard (ETS) to implement this requirement.”

The ETS will also require employers with more than 100 employees to provide paid time off for workers to get vaccinated or recover from vaccination.

We are actively monitoring for the details of President Biden’s COVID action plan. Here is what we know and don’t know:

What We Know

  • The mandate applies to employers with 100+ employees.
  • It requires mandatory vaccination or weekly testing to come into work.
  • It also requires paid time off to get vaccinated and recover.
  • Fines will be assessed.
  • If you have fewer than 100 employees, no federal contracts, and no healthcare workers, these new federal requirements do NOT apply to you.

What We Don’t Know

  1. How do employers count to 100?
  2. Do remote employees have to get vaccinated or tested?
  3. What kind of proof do employers need to require?
  4. Do employers need to do “due diligence”?
  5. Will testing be done at home or at work?
  6. Who pays for testing?
  7. Will there be any funds or tax credits available?
  8. What are the recordkeeping requirements?
  9. Can employees claim religious exemptions from testing?
  10. How will fines be assessed?
  11. Will OSHA have the staff to enforce this?

FAQ

How should employers address pushback from their employees (or others) about having to follow the vaccine mandate?
  • Put someone in charge of the whole process and make sure that complaints go to them. Don’t count on your frontline managers to know how to deal with escalations. They aren’t trained for that, and it’s not fair to them.
  • Emphasize that this is a federal government requirement and that you have no choice about whether or not to comply. You can also emphasize that penalties may be very steep – so steep that even one or two violations could put the business in jeopardy.
  • Focus on the fact that this is about safety. If employees don’t want a vaccination, there is a simple alternative, but in order to ensure that the workplace is safe with highly infectious Delta making the rounds, vaccination or testing must be done.
How do I accommodate an employee if all of my clients require employees are vaccinated?

We recommend speaking with your clients about possible accommodations for those employees who request an accommodation for a disability or sincerely held religious belief. Federal law generally requires employers to provide accommodations for employees for these reasons unless doing so would cause an undue hardship. There isn’t an exception for client requirements, which puts you between a rock and a hard place.

 

The first step is asking your client about potential exceptions to their mandatory vaccination requirement. If your client says that they will not grant any exceptions, we recommend placing employees who require a religious or disability accommodation with a different client. If all your clients require employees to be vaccinated without exceptions, possible accommodations might be to reassign the employee to a vacant position that they‘re qualified for or to place the employee on a leave of absence. Either way, you should discuss the available options with the employee.

 

If the only option is leave, you’ll want to discuss the length of leave with the employee (it might be temporary, as with pregnancy). The estimated duration will help you evaluate whether granting leave would cause an undue hardship.

How is the Delta variant different than regular COVID?
  • The Delta variant is twice as contagious as original COVID.
  • Fewer people have a cough or loss of smell, more people have headaches, sort throats, and runny noses (looks more like the common cold).
  • It appears that Delta may cause more severe illness in unvaccinated people than the original.
  • Delta appears more likely to cause breakthrough infections for the fully vaccinated, but the vaccines remain highly effective against severe illness, hospitalization, and death from Delta.
  • When a vaccinated person catches Delta, their viral load is as high as an unvaccinated person for a time (unlike earlier strains of COVID), but it goes down faster than for the unvaccinated, so they will be infectious for shorter periods of time.
What should I do if an employee says they can’t get vaccinated due to a religious belief or disability?

Assuming no state law or collective bargaining agreement prohibits it, employers can generally require employees to get the COVID-19 vaccine as a condition of continued employment, although they may need to make exceptions for employees who can’t get vaccinated because of a sincerely held religious belief, disability, or possibly pregnancy.

 

Religious Belief

Title VII of the Civil Rights Act of 1964 requires employers that have 15 or more employees to accommodate employees’ religious beliefs that are sincerely held if it doesn’t create an undue hardship. Title VII defines religion very broadly. It includes traditional, organized religions such as Christianity, Judaism, Islam, Hinduism, and Buddhism. It also includes religious beliefs that are new, uncommon, not part of a formal church or sect, or only held by a small number of people or possibly just one person.

 

Here’s the basic framework. If the answer is no to any question, generally no accommodation is required; if the answer is yes to all questions, an accommodation is required.

  • Does the person have a belief that is religious?
  • Is the belief sincerely held?
  • Can an accommodation be made that would enable the employee to do the job, without creating an undue hardship?

 

According to the Equal Employment Opportunity Commission (EEOC), employers should generally assume that the employee’s religious belief is sincerely held, but if “they have an objective basis for questioning either the religious nature or the sincerity of a particular belief or practice, the employer would be justified in seeking additional supporting information.”

 

Under Title VII, undue hardship is defined as “more than a de minimis cost.” The EEOC explains this further in its guidance here.

 

Disability
The Americans with Disabilities Act (ADA) generally requires employers to provide accommodations to employees who have disabilities to enable them to perform the essential functions of their job, provided the accommodation doesn’t create an undue hardship. The definition of disability under the ADA is pretty broad and includes both physical and mental disabilities.

 

If an employee requests an exception to your mandatory vaccination policy because of a disability, then you would be required to engage in the interactive process. The interactive process is essentially an ongoing conversation with the employee to explore potential accommodations. You can require the employee to provide documentation from their health care provider confirming that the employee’s health condition prevents them from getting vaccinated and, if temporary, an estimate of the expected duration of the need for the accommodation.

 

The company would then determine whether it’s possible to make an accommodation that would enable them to perform their essential functions without creating an undue hardship.

 

Safety Assessment
Companies who are considering excluding unvaccinated employees from the workplace will ultimately need to assess whether allowing an employee to be unvaccinated, while engaging in other safety measures, would pose a direct threat in the workplace.

 

We recommend reviewing the EEOC’s guidance on what qualifies as a direct threat before making this determination. If you conclude that allowing an employee to remain unvaccinated rises to the level of a direct threat, then you are required to evaluate whether potential accommodations would eliminate that threat or reduce it enough so that it no longer meets the standard of being a direct threat. If no accommodations exist that would reduce the threat sufficiently (without creating an undue hardship), then you wouldn’t be required to make an exception for the employee.

 

If you believe there is no accommodation that will make it safe enough for that employee to be in the workplace, and they are not able to work from home, we recommend working with an attorney to assess the risk of termination or exclusion from the workplace.

 

Documentation
Employers should keep documentation as to how their determination to grant or deny a request for an exception to their mandatory vaccination requirement was made, which could include:

  • Accommodation request form and supporting documentation, if any
  • Emails to/from the employee about their request
  • Notes on the employer’s decision-making process
What do I do if I have doubts about the legitimacy of a religious accommodation request?

Title VII of the Civil Rights Act of 1964 requires employers that have 15 or more employees to accommodate religious beliefs that are sincerely held if it doesn’t create an undue hardship. Title VII defines “religion” very broadly. It includes traditional, organized religions such as Christianity, Judaism, Islam, Hinduism, and Buddhism. It also includes religious beliefs that are new, uncommon, not part of a formal church or sect, only held by a small number of people (and maybe even just one person).

 

We understand it can be challenging when you’ve received a religious accommodation request that you have reason to doubt. We’re happy to give some general guidance but are unable to give definitive guidance as to whether this employee has a sincerely held religious belief or whether you would be required to provide an accommodation in this situation. We recommend speaking to legal counsel to help you make this determination.

 

According to the Equal Employment Opportunity Commission (EEOC), employers should generally assume that the employee’s religious belief is sincerely held, but if “they have an objective basis for questioning either the religious nature or the sincerity of a particular belief or practice, the employer would be justified in seeking additional supporting information.”

 

Typically, the following are not considered religious beliefs and therefore don’t require an exemption from your mandatory vaccination policy:

  • Political beliefs (e.g., “Vaccination infringes on my personal liberty.”)
  • Personal preferences (e.g., “I prefer to risk getting COVID rather than getting vaccinated.”)
  • Medical beliefs (e.g., “COVID isn’t that bad.”)
  • Concerns about the vaccine’s Emergency Use Authorization (EUA) status (if the employee can’t access a vaccine with regular FDA approval)
  • Conspiracy theories (e.g., “COVID is a hoax.”)

 

Please note that there could be overlap between a sincerely held religious belief and another belief, such as a political belief—that overlap does not place it outside the scope of Title VII’s religious protections.

 

We recommend documenting the information you used to make an accommodation decision.

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Employer Medicare Part D Notices Are Due Before October 15, 2021

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Medicare Part D

Purpose

Medicare began offering “Part D” plans — optional prescription drug benefit plans sold by private insurance companies and HMOs — to Medicare beneficiaries many years ago. People may enroll in a Part D plan when they first become eligible for Medicare.

If they wait too long, a late enrollment penalty amount is permanently added to the Part D plan premium cost when they do enroll. There is an exception, though, for individuals who are covered under an employer’s group health plan that provides creditable coverage. (“Creditable” means that the group plan’s drug benefits are actuarially equivalent or better than the benefits required in a Part D plan.) In that case, the individual can delay enrolling for a Part D plan while he or she remains covered under the employer’s creditable plan. Medicare will waive the late enrollment premium penalty for individuals who enroll in a Part D plan after their initial eligibility date if they were covered by an employer’s creditable plan. To avoid the late enrollment penalty, there cannot be a gap longer than 62 days between the creditable group plan and the Part D plan.

To help Medicare-eligible plan participants make informed decisions about whether and when to enroll in a Part D drug plan, they need to know if their employer’s group health plan provides creditable or noncreditable prescription drug coverage. That is the purpose of the federal requirement for employers to provide an annual notice (Employer’s Medicare Part D Notice) to all Medicare-eligible employees and spouses.

Employer Requirements

Federal law requires all employers that offer group health coverage including any outpatient prescription drug benefits to provide an annual notice to plan participants.

The notice requirement applies regardless of the employer’s size or whether the group plan is insured or self-funded:

  • Determine whether your group health plan’s prescription drug coverage is creditable or noncreditable for the upcoming year (2022). If your plan is insured, the carrier/HMO will confirm creditable or noncreditable status. Keep a copy of the written confirmation for your records. For self-funded plans, the plan actuary will determine the plan’s status using guidance provided by the Centers for Medicare and Medicaid Services (CMS).
  • Distribute a Notice of Creditable Coverage or a Notice of Noncreditable Coverage, as applicable, to all group health plan participants who are or may become eligible for Medicare in the next year. “Participants” include covered employees and retirees (and spouses) and COBRA enrollees. Employers often do not know whether a particular participant may be eligible for Medicare due to age or disability. For convenience, many employers decide to distribute their notice to all participants regardless of Medicare status.
  • Notices must be distributed at least annually before October 15. Medicare holds its Part D enrollment period each year from October 15 to December 7, which is why it is important for group health plan participants to receive their employer’s notice before October 15.
  • Notices also may be required after October 15 for new enrollees and/or if the plan’s creditable versus noncreditable status changes.


Preparing the Notice(s)

Model notices are available on the CMS website. Start with the model notice and then fill in the blanks and variable items as needed for each group health plan. There are two versions: Notice of Creditable Coverage or Notice of Noncreditable Coverage and each is available in English and Spanish:

  • Model Notice for Group Plan that is Creditable Coverage (English)
  • Model Notice for Group Plan that is Noncreditable Coverage (English)
  • Model Notice for Group Plan that is Creditable Coverage (Spanish)
  • Model Notice for Group Plan that is Noncreditable Coverage (Spanish)


Employers who offer multiple group health plan options, such as PPOs, HDHPs, and HMOs, may use one notice if all options are creditable (or all are noncreditable). In this case, it is advisable to list the names of the various plan options so it is clear for the reader. Conversely, employers that offer a creditable plan and a noncreditable plan, such as a creditable HMO and a noncreditable HDHP, will need to prepare separate notices for the different plan participants.

Distributing the Notice(s)

You may distribute the notice by first-class mail to the employee’s home or work address. A separate notice for the employee’s spouse or family members is not required unless the employer has information that they live at different addresses.

The notice is intended to be a stand-alone document. It may be distributed at the same time as other plan materials, but it should be a separate document. If the notice is incorporated with other material (such as stapled items or in a booklet format), the notice must appear in 14-point font, be bolded, offset, or boxed, and placed on the first page. Alternatively, in this case, you can put a reference (in 14-point font, either bolded, offset, or boxed) on the first page telling the reader where to find the notice within the material. Here is suggested text from the CMS for the first page:

“If you (and/or your dependents) have Medicare or will become eligible for Medicare in the next 12 months, a federal law gives you more choices about your prescription drug coverage. Please see page XX for more details.”

Email distribution is allowed but only for employees who have regular access to email as an integral part of their job duties. Employees also must have access to a printer, be notified that a hard copy of the notice is available at no cost upon request, and be informed that they are responsible for sharing the notice with any Medicare-eligible family members who are enrolled in the employer’s group plan.

CMS Disclosure Requirement

Separate from the participant notice requirement, employers also must disclose to the CMS whether their group health plan provides creditable or noncreditable coverage. To submit your plan’s disclosure, use the CMS online tool and follow the prompts. The process usually takes only 5 or 10 minutes to complete. It is due with 60 days after the start of the plan year; for instance, for calendar year plans that will be March 1, 2022. If the plan’s prescription drug coverage ends or its status as creditable or noncreditable changes, submit a new disclosure within 30 days of the change.

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HR Compliance: What It Is and Why It’s So Complicated

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HR Compliance

Running a business comes with no shortage of perks. You get the freedom to be your own boss, invest in an idea, steer its trajectory, and create wealth. It has its challenges, too. Competition may be fierce. Demand for what you offer may be low. Costs may not be sustainable. But even if everything else is going your way, there’s one challenge that’s ever-present. We’re talking, of course, about HR compliance.

The Definition of HR Compliance

HR compliance is the work of ensuring that your employment practices conform to federal, state, and local laws. This work requires learning which laws apply to your organization and understanding what they require you to do. That’s easier said than done.

HR compliance is truly an art. It requires knowledge, skill, and cooperation. You have to be able to decipher legalese, know where to go to ask and get the right answers and create policies and procedures that minimize business risk. You have to ensure that everyone from the executive team to newly minted managers know what they can and cannot do. You have to conduct investigations and enforce your rules consistently. And all this is just the bare minimum—necessary, but not enough to create a truly successful culture.

The work of compliance is never entirely done. Not only do new legal requirements appear frequently, but, as you’ll read below, compliance obligations are often unclear. While some compliance obligations are definitive, others are unresolved, and a good number require you to make a judgment call. Let’s look at each of these in turn.

Why HR Compliance Can’t Always Be Assured

Some employment laws take the form of “Do this” or “Don’t do that.” The requirements may be simple, like minimum wage, or complex, like FMLA, but either way there’s usually no real question about what you need to do or not do. Compliance with these laws is pretty straightforward. Don’t pay less than the minimum wage. Provide leave to eligible employees for the reasons that qualify, continue their health benefits (if applicable), and return them to their position when their leave ends. As long as you’re clear on the details, you’re not likely to lose sleep wondering if you’re compliant.

Sometimes, however, those details are unsettled. Lawmakers don’t always specify everything a law requires before it passes or takes effect. Even when laws seem clear, trying to put them into practice often raises a lot of questions. And the legislature isn’t the only source of law: regulatory agencies demand their say, and courts get involved, too. To complicate matters, these branches of government don’t always agree with each other, and what they say today may not be what they say tomorrow. Keeping up with the latest official guidance takes time and persistence. It can feel like a marathon, when what you want is a quick sprint to the answer. You have other demands on your time, after all. 

Finally, a lot of employment laws have standards you have to follow, but they don’t tell you how. Neither the IRS nor the DOL, for example, tells you whether your workers are employees or independent contractors—unless there’s an audit or complaint. Instead, these agencies publish tests with general criteria that you use to make case-by-case determinations.

The Americans with Disabilities Act (ADA) works this way, too. The ADA requires employers to provide reasonable accommodations to employees with disabilities, with a few exceptions. One of the exceptions is that the accommodation doesn’t create an undue hardship on the employer’s business. The basic definition of an undue hardship is an action that creates a significant difficulty or expense. Although the law provides factors to consider in making this determination, the onus is on you to decide whether an expense or difficulty from an accommodation is significant. And, ultimately, your conclusion could be challenged in court.

Why HR Compliance Looks Like This

If HR compliance seems overly-complicated, that’s because it is. Our current legal landscape is the result of three competing philosophies about how the workplace should be governed, who should govern it, and whose rights in the workplace should be prioritized in the law.

Owner Control

According to the first view, business owners should have control over their workplaces for one simple reason. They own the business. It’s their property, and as owners they should have the legal right to govern it. Employees have no right to control aspects of the workplace because the workplace isn’t theirs. They don’t own it. It’s not their property. If they don’t like the terms and conditions of their employment, they can and should go elsewhere.

While an owner might employ managers or an executive team to make decisions about who to hire and fire, what to pay, how to assign work, and other such matters, the owner remains in charge. Advocates of this view include the economist, Milton Friedman. In 1970, he famously argued that corporate executives should bow to the desires of the owners. The will of the owners reigns supreme. 

Worker Control

According to the second view, workers should have a say in the decisions that get made simply because those decisions affect them and their livelihoods. In this line of thinking, the governance of the workplace should adhere to the principles of democracy. However, proponents for this view differ on how democracy in the workplace should be practiced.

In the 1930s, Senator Robert F. Wagner introduced the National Labor Relations Act. He wanted to guarantee the “freedom of action of the worker” and ensure that workers were “free in the economic as well as the political field.” Today, talk of democratizing the workplace usually refers to bolstering unions. But there are other proposals to note. Some champions of workplace democracy, like Senator Elizabeth Warren, have pushed for employee representation on corporate boards. Others favor cooperative models in which the division between employers and employees doesn’t exist.   

Full-fledged workplace democracy is still a fringe view, though. The very definition of an employee remains a worker who does not have the right to control what the work is, how it’s done, or how it’s compensated. Employees may be given authority to make decisions. They may have influence over their superiors. But they are not legally in charge. 

Societal Control

Advocates of the third view argue that the government has an interest in exercising some measure of control over the work and the workplace. In the employer-employee relationship, employers typically have significantly more power than employees—especially an employee acting as an individual. Frances Perkins, who served as Secretary of Labor and was a key architect of the New Deal, believed that government “should aim to give all the people under its jurisdiction the best possible life.” She saw a role for legislatures in countering long hours, low wages, and other conditions unfavorable to employees. 

How These Philosophies Have Played Out

In the United States, HR compliance is the result of these three competing and arguably incompatible philosophies. Government action with respect to employment has tried to empower workers and afford them certain rights, protections, and freedoms in the workplace, all while preserving the employer’s control over their business.

We can see this balancing act in the differences among state laws. Some states prioritize the right of owners to control their workforces and are loath to restrict that right through legislation. Other states act out of what they see as a duty to secure the rights of workers. Imposing obligations on employers doesn’t bother them.

We also see this balancing act in the way that employment laws tend to set parameters rather than dictate exactly what employers must do. You can pay employees whatever you want, so long as you pay at least the minimum, offer an overtime premium when applicable, and meet equal pay requirements. You can theoretically terminate employment for any reason or no reason at all (though we don’t recommend it); but you can’t fire someone for an illegal reason. Even laws that require a new practice, such as paid leave, allow flexibility provided you meet minimum conditions.

Takeaways

First, when you’re assessing your compliance obligations, understand that not all compliance obligations are clearly delineated or settled law. Unsettling as that may be, it’s how our system has been set up. In those cases, you’ll have to weigh your options and the risks involved, and then make a decision. Sometimes you may need legal advice in addition to HR guidance. Remember, however, that despite all the many employment laws on the books and in the imaginations of legislators, the system is designed to keep employers in charge. You can’t eliminate all risk, but by understanding the nuances and open questions, you can significantly minimize it.

Second, document your actions and decisions. It only takes an employee filing a complaint for enforcement agencies to get involved, but you are better protected if you can quickly and clearly explain to them the reason for your actions.

Third, evaluate whether your policies, procedures, and practices are satisfactory to employees. No employment law gets written in a vacuum, and no law is truly inevitable. Lawmakers passed the Fair Labor Standards Act because workers and the general public felt that labor standards were unfair. Today we wouldn’t have people pushing for predictive scheduling laws if they felt that work schedules were already sufficiently predictable. Harassment prevention training wouldn’t be mandatory (where it is) if sexual harassment weren’t widespread.

Fourth, lead by example. Make good employee relations a key part of your brand and competitive advantage. Employees have higher expectations today than they used to. Meet those expectations and motivate other employers to do the same, and you may find that the compliance landscape of the future is less winding and boggy than it could have been.

Finally, spend some time each day learning about your compliance obligations. Use resources that break down federal and state employment laws in a way that laypeople can understand. Keep up to speed on the latest compliance obligations and contingencies you should consider. HR compliance is an art. The first step to mastering it is learning what it entails and how it works.

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