How Do Your Clients Deal with HR Compliance?

How Do Your Clients Deal with HR Compliance?

Managing compliance can be a never-ending, uphill battle, especially for your smaller clients. From recruiting to hiring to payroll and HR regulations, wrangling compliance rules can very easily turn into a full-time job.

So, how are your clients managing? Are they burying their heads in the sand, pretending that a lot of legislation simply won’t touch them? Do they have someone (or several staff members) in charge of ensuring nothing slips through the cracks? Or, like many companies, are they doing a little of both? Failing to make sure that they’re buttoned up when it comes to government compliance can result in disastrous consequences. As a trusted advisor, it’s incumbent on you to make sure they’re toeing the line. Here are some hot button topics to make sure they’re focused on.

Recruiting Compliance

Recruiting, especially in a tight labor market, is a fast-paced game. A company’s recruiters help make rapid and sensitive yes/no decisions, so the pre-hire phase of the employee lifecycle can be a risky time. EEOC (Equal Employment Opportunity Commission) and OFCCP (Office of Federal Contract Compliance Programs) ensure that companies’ hiring practices are fair to everyone and, in addition, do not discriminate against protected classes of applicants.

Who does it affect?

  • EEOC: All employers, state agencies and labor unions with 15 or more employees who have worked in that capacity for a minimum of 20 calendar weeks are required to comply with EEOC regulations.
  • OFCCP: All federal contractors who conduct business with the government in excess of $10,000, fall under the jurisdiction of the OFCCP.

Potential penalties:

  • EEOC: $355M in fines in 2017, on pace for more than 100K discrimination charges filed in 2018.
  • OFCCP: $40M in back wages and fines paid in 2017, more than $100M since 2000.

Hiring Compliance

Federal law requires all employers to use certain forms to verify the employment eligibility and identity of all employees hired to work in the United States. ICE (the U.S. Immigration and Customs Enforcement) has become far more active this past year, and fines for simple errors, such as incomplete forms, range from $110 to $1,100 per violation. Fines increase up to $16,000 per violation for knowingly employing unauthorized workers.

Who does it affect?

  • I-9: Form I-9 verifies employment eligibility, and it is required for every person a company hires. The I-9 does not require gathering a Social Security number or photo identification.
  • E-Verify: E-Verify is operated by the Department of Homeland Security and, like the I-9, allows employers to verify the employment eligibility of employees. While E-Verify is still a voluntary process* in many states, some states have made the process mandatory. Your HR teams are required to gather Social Security numbers and photo identification for E-Verify.

*E-Verify is also mandatory for employers with federal contracts or subcontracts that contain the Federal Acquisition Regulation (FAR) E-Verify clause.

Potential penalties:

  • I-9: Since early 2018, ICE has relied on I-9 inspections to discover and impose penalties on businesses that have not appropriately verified employment eligibility. The number of companies that have had their I-9 processes audited every year has rocketed from a few hundred to thousands.

If you’re searching for a trusted compliance partner for your clients, look no further than Paycor. For nearly 30 years, we’ve maintained a core expertise in payroll and compliance. To learn how we can support the businesses your work with, contact our expert team.

*Employment law firm Littler recently issued its seventh annual report on EEOC developments.

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