In discussions with many of our clients with under 50 employees, they underestimate the importance of maintaining compliance with employment laws and various state and federal regulations. This can be a very costly mistake – the cost of being audited or sued, ultimately being found non-compliant – can be extremely detrimental to a company. Not only can it seriously impact your profits, but it can also damage your reputation, one you likely took years to build. When it comes to dealing with compliance, small businesses are often subject to the very same laws and regulations as their counterparts in larger corporations. Even if you do not know you are out of compliance, that is generally not accepted as a valid excuse.
New Hires and Form I-9 – For instance, upon hiring new employees, ensure you have the proper and up-to-date eligibility to work documents completed. If you fail to obtain documentation or have missing or incomplete I-9 Forms, incomplete or inaccurate documentation can be grounds for legal action. Before you file the new hire paperwork, make sure all forms are completed in full, including all proper dates and signatures. Also be advised that you must be able to provide valid documentation with the I-9 Form. You, as the employer, have the responsibility to advise employees or applicants of the acceptable identification and authorization to work documents to provide. You can provide new hires with the Form I-9 which allows them to review the list and make their own decision as to which documents they wish to provide. The I-9 Forms should be kept current, if someone offers a temporary work visa, employers are responsible to obtain updated documents when appropriate. Also note, all forms must be completed within three days of the hire date or you could potentially be subject to fines. Finally, do not forget to destroy all I-9 Forms for former employees one year after their termination date or three years from the date of hire, whichever comes later.
Exempt or Non-Exempt Status – Oftentimes companies believe it is their responsibility as to how to classify employees as exempt or non-exempt, salaried or hourly. Most to not realize the Department of Labor (DOL) has specific rules about how to determine the classification. It is actually based on job duties, responsibilities and pay rates. It becomes very important to classify correctly due to required record keeping differences between the classes.
Occupational Safety and Health Administration (OSHA) – One large area of oversight for small employers is OSHA. Safety regulations apply to ALL businesses, not just those of a certain size or industry type. OSHA requires every employer, regardless of size, to provide every employee with a place of employment that is free from recognized hazards. Safety rules must be communicated both verbally and in writing. We encourage our employer clients to conduct staff meetings, training meetings and post current copies of regulation. We also dictate that everyone must post injury logs. The Department of Labor requires businesses to officially record any lost-time injuries using the OSHA 300 Form each year. If you have an accident or injury at your place of business, take action immediately. Failure to document, record and implement corrective action in response to any incident can also jeopardize compliance.
Affordable Care Act (ACA) – Once employers reach the threshold of 50 or more full-time employees or full-time equivalent employees, they must report and comply with the Affordable Care Act. Some employers attempt to stay under the 50 employee threshold by starting other organizations with different tax ID numbers, or classifying employees as contractors. These “work-arounds” can lead to costly mistakes. Ownership is also a provision tied to ACA and while independent contractors sound appealing in theory, there are rules for what constitutes an independent contractor as well.
We find the biggest roadblock small employers face is failure to keep up with rules and regulations imposed upon your organization. After all, you started your business to do business, not keep up with sick leave policies, hiring regulations, workplace safety and health laws, overtime pay laws, travel expense regulations, local, state and federal family leave laws, or when and how to pay taxes.
If all of these issues concern you as an employer, now may be a great time to consider a visit with our team to find out if a partnership would be suitable for your organization. Please contact us – we look forward to learning about your company and needs!