End-of-Year Checklist: Top Three Employer Compliance To-Do’s

by Howard Tarnoff, Senior Vice President of Customer Success at Ceridian Corporation

The end of the year is upon us. That means you’re checking your regulatory compliance one last time before the start of 2014. With reports that the National Labor Relations Board is upping its investigative activity, employers must do everything they can to make sure they’re in compliance with federal and state employment law. In my opinion, following are the top three things to do, check or be ready for at any year’s end….

1)     Conduct an FLSA Health Check-up:
The Fair Labor Standards Act comprises an array of practices that, over the decades, have become a perfunctory list of must-do miscellany for employers. Even so, the risk of failing to dot an I or cross a T remains. Here’s a run-down of top things to watch:

  1. Meals and Rest Periods—make sure you gave your hourly workers the correct amount of time, at the correct times, for meals and rest periods. Now is the time to rectify matters, if necessary.
  2. Minimum Wage—currently, the federal minimum wage is $7.25 per hour. In many states, it’s higher or likely to be so, soon. Organizations operating in multiple states must monitor related laws extra closely. Conduct an end-of-year review of where the organization operates and whether pay reconciles with minimum wage in these regions.
  3. Overtime—hours that non-exempt workers accrue in excess of the standard 40 per week can be tough to track. But failure to appropriately and accurately compensate employees with overtime pay is no less necessary. The end of the year is the time to review records and correct discrepancies—i.e., cut checks for overtime pay missed.
  4. Employment of Minors—this applies particularly to employers in retail and food service, where entry-level positions are common and younger people are more apt to be employed. Highly prescribed rules apply to the employment of minors vs. adults, and even a technicality can land an employer in court. Review the age of employees.

2)     Classify Employees Correctly:
As I noted in my previous post here, nearly half of HR professionals are concerned about the consequences of employee misclassification, according to a survey. Which of your employees are exempt and non-exempt? Who receives tips? Is the organization recording everything properly? Missteps can land employers costly fines—and, once final yearly tallies and calculations are recorded, and 2014 has begun, it’ll be too late to make amends.

3)     Get Ready for the ACA Numbers Game:
Related to the Affordable Care Act are two issues worth a gut check right now:

  1. The 29ers—most employees who average more than 29 hours per week according to complex calculations outlined in the Affordable Care Act will be eligible for employer-provided healthcare coverage. Employers failing, under an array of conditions, to provide that coverage will be subject to a corresponding penalty. This is the Employer Mandate. Though postponed for one year, the time to prepare is now. There is fertile ground for error and attendant, heavy costs.
  2. The 49ers—companies employing fewer than 50 employees—again, according to complex calculations outlined in the ACA—need not comply with the Employer Mandate. When new business calls for an increase in the employee population, however, what should a company with an employee population in the high 40s do? Hiring could subject the employer to the ACA’s costly requirements. Year’s end is as good a time as any for employers to figure out, definitively, under category they fall.

Revisit Your HCM Technology

Much of the compliance detailed above depends on employers having effective technology for human capital management—technology that’s consistent in accurately categorizing employees and tracking their activities. And plenty of the HCM technology out there right now isn’t. That’s why the end of the year is a good time, too, to revisit your organization’s technology situation: Employers need to know, with certainty, whether or not they’re in compliance with the ever-growing constellation of regulations governing the employer–employee relationship.

About Howard Tarnoff

Howard Tarnoff, a senior vice president at Ceridian Corporation, joined the company in February of 2009 and leads its critically acclaimed XOXO Customer Success Program. A frequent speaker on technology for human capital management, Tarnoff has worked for several well-known brands in the marketplace over the course of his career, which spans more than three decades in software sales and management.