For finance leaders, it might seem easy to understand the evolution of tax regulations and how that evolution impacts current and future tax compliance. But does the same hold true for employer HR regulations?
Your HR department is increasingly affected by compliance measures changed or updated by evolving regulations, potentially new legislation, and judicial actions. Failure to comply with changing requirements can not only negatively impact employee and employer performance, but can also drastically affect an organization's bottom line. By understanding the progression of employer HR regulations, finance leaders can better grasp the changes to these regulations and implement the necessary compliance to cope.
A Myriad of HR Regulations
HR departments must comply with a myriad of regulations, including:
- The Equal Pay Act (EPA)
- The Civil Rights Act of 1964 (Title VII)
- The Civil Rights Act of 1991
- The Age Discrimination in Employment Act (ADEA)
- The Occupational Safety and Health Act
- The Equal Employment Opportunity Act
- The Family and Medical Leave Act (FMLA)
- The Health Insurance Portability and Accountability Act of 1996 (HIPAA)
- The Employee Retirement Income Security Act (ERISA)
- The Affordable Care Act (ACA)
These pieces of legislation address wage and hour, discrimination, safety, leave, medical, disability, retirement and privacy issues. These issues continue to be at the forefront of HR compliance, as the laws affecting these issues change rapidly. By looking at how these regulations have progressed and how these laws have changed your industry, finance leaders should be able to gain an understanding and perspective about the changes that must be made to remain compliant with these evolving regulations moving forward.
FLSA Overtime Rules
In May 2016, the DOL issued final regulations with respect to overtime pay protections of the Fair Labor Standards Act (FLSA). According to the DOL, this new legislation extends the right to overtime pay to an estimated 4.2 million workers who are currently exempt. Understanding these FLSA rules, including the salary benchmarks and the duties test, allows finance leaders to put appropriate compliance safeguards in place, such as appropriate internal controls, while this law surges between current and updated legislation.
*Note that eight days prior to the implementation of this new FLSA rule, a Texas judge issued a national preliminary injunction, effectively halting the implementation of the new rule. As such, organizations must use the FLSA overtime pay regulations currently in effect. Although the new FLSA rule is halted for now, it is expected to go into effect at a delayed date.
Pay Equity Reporting: Revisiting Equal Pay
In February 2016, the Equal Employment Opportunity Commission (EEOC) reported that it issued proposed regulations revising the Employer Information Report (EEO-1) to include collecting certain pay data — such as data on race, ethnicity, sex and job category — from employers with 100 or more employees.
According to the EEOC, the data provided allows the government to make a determination as to compliance with pay equity regulations. Further, this data will provide a foundation to federal agencies for compliance inquiries and audits. Additionally, the new administration has stated that pay equity will be one of its key legislative reforms, with potentially new legislation being proposed next year.
With this law changing rapidly, finance leaders should first understand the history of such pay equity laws, including all required employer duties associated with pay equity that have come about over time, so that your organization as a whole comprehends the vitality of this issue, both for compliance and employee morale purposes.
Other HR Issues Geared for Change
With a new president being sworn into office in January 2017, finance leaders could see rapidly changing legislation related to the FMLA, the ACA, employer-provided retirement plans, among many others. Compliance expertise will be essential with a possible rapid evolution of employer HR changes on a federal, state, and local level. As instrumental players in their organizations, finance leaders must have thorough knowledge of these regulations, so as not to unnecessarily expose their organizations to liability and keep their organizations on the compliant path toward success.
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