Memphis Business Journal.Compliance Challenging In A Complex Regulatory Environment.9.14.12
Friday, September 14, 2012Compliance challenging in a complexregulatory environmentMemphis Business Journal by BARBARA RICHMANToday, employers are facing a complex and evolving regulatory and enforcement environmentduring a time of weak economic recovery. Concerns related to these challenges were confirmedby the findings of a global survey of business leaders. According to the survey, The ConferenceBoard CEO Challenge 2012, top executives in Europe and the United States say global politicaland economic risk and government regulation are their most pressing concerns. CEOs in the U.S.say government regulation is their most critical challenge, followed by global political andeconomic risk, innovation and human capital.The current activity level of a number of federal agencies that deal with employment issuesreinforces the concerns of American business. Insights can be found by examining the focus ofagencies such as the Equal Employment Opportunity Commission, National Labor RelationsBoard and Department of Labor.The NLRB has expanded its oversight of the workplace and taken additional steps to educateemployees about their rights to act together for their mutual aid and protection, even if their workforces are not unionized. In May 2012, the board’s acting general counsel issued a third report onthe legality of policies governing social media use, cautioning that certain clauses, such thoseprohibiting discussions of confidential information, could be unlawful. In June 2012, the agencylaunched a web page, www.nlrb.gov/concerted-activity, which describes employees’ rights andcases brought against employers in a range of industries.The EEOC announced that its combined enforcement, mediation and litigation programs in 2011resulted in a record $455.6 million in relief for private sector, state and local employees andapplicants. This amount represented an increase from the past fiscal year and continued theupward trend of the previous three years. In April 2012, the agency issued enforcement guidanceon using background checks in employment decisions. Employers, with the assistance of legalcounsel, are evaluating and revising policies and practices to ensure consistency with theguidance and applicable laws.The DOL has been aggressive in its pursuit of wage and hour violations under the Fair LaborStandards Act. One of its primary efforts, an employee misclassification initiative, is designed tocrackdown on instances of employers misclassifying workers as independent contractors when infact they are employees.
It is essential in today’s environment that employers stay abreast of legal developments andcontinuously examine their policies, procedures, processes and personnel actions for compliancepurposes. A “head-in-the-sand” approach is not a viable alternative.The following are tips regarding actions that employers can take to safeguard their organizations:1. Determine which federal, state and local employment laws are applicable to the organization.Applicability depends on factors that include number of employees, nature of the business, statusas a public- or private-sector employer, designation as a federal contractor, and businesslocations.2. Identify common sources of current employment charges and litigation. Legal updates,advertisements of plaintiffs’ attorneys, websites of federal agencies, and similar communicationsoften highlight areas of contention. Knowledge of specific sources, such as increasing EEOCcharges alleging retaliation, can be a signal for management to take preventive action.3. Stay abreast of new and revised laws and regulations and of timeframes for compliance. Inaccordance with the Patient Protection and Affordable Care Act, employers must implementhealth reform requirements at established intervals throughout a phase-in period. It will benecessary for employers to monitor effective dates to ensure compliance.4. Provide information and/or training for supervisors and employees on the organization’sexpectations for compliance. For example, supervisors need to understand their responsibilitiesfor harassment prevention, adherence to organizational policies and avoidance of actions that cancreate liabilities for their employers.5. Train supervisors to document effectively. Accurate, objective and timely documentation isessential in making well-founded decisions about an employee’s performance and conduct. Theorganization can be exposed to risks if management’s actions are challenged and deficiencies indocumentation are identified.6. Write employee handbooks in a manner that establishes expectations for employees andmanagement and provides a defense for the employer in the event of litigation or scrutiny by afederal or state agency. Cover topics that address areas of compliance, such as harassment,retaliation, military leave, overtime for non-exempt employees, electronic communications andsocial media, and reasonable accommodations for disabilities.7. Administer discipline in an objective, timely and consistent manner. Prior to deciding uponany action, conduct an investigation and consider the seriousness of the violation and otherrelevant factors. Also, ensure that an employee’s legally protected status or involvement inprotected activities does not influence the decision and subject the employee to potentialretaliation or other forms of discrimination.8. Conduct a human resource audit of employment policies, processes and practices on a periodicbasis. An audit is an objective tool that can be used to examine the human resource function andpinpoint gaps in compliance that require the attention of management. Areas to consider in
determining the scope of the audit include recruitment and hiring processes, disciplinaryprocedures, use of independent contractors, exempt and non-exempt employee classifications,training, performance management and employee handbooks.BARBARA RICHMAN is a senior consultant with HR Mpact, a Memphis human resourceconsulting firm, www.hr-mpact.com. She can be reached at (901) 685-9084, (901) 496-0462 firstname.lastname@example.org.