How to Avoid Common HR Fines
It’s critical to understand your responsibilities for dealing with the ever-changing whirlwind of local, state and federal regulations to avoid HR fines. One practical solution is hiring dedicated HR guides to set company guidelines of behavior and develop a zero-tolerance policy for violations. Some of the critical issues include:
- Establishing Policies and Procedures
Establishing firm guidelines prevent workplace bullying and discrimination and heighten employee awareness.
- Ensuring Compensation Compliance
Make sure your managers and payroll staff are aware of the nuances of wage, work-hours limits and overtime regulations.
- Offering Coaching and Guidance
It’s important to offer coaching inappropriate company behavior and support services for in-house employees and an increasingly mobile workforce when they file complaints.
- Benefits Compliance
You need to make sure you understand the fine print about your responsibilities when dealing with employee benefits, health insurance and other benefits.
- Recruiting Behavior
If you discriminate in hiring, you’re violating the law. By the same token, tokenism, hiring to meet diversity quotas, can raise important compliance issues if not handled carefully.
The above issues primarily deal with workplace behaviors, but there are many HR fines that deal with administrative issues, workplace safety and hiring policies.
The Most Common HR Fines for Non-Compliance
Compliance issues run the gamut of workplace actions and behaviors so that it seems impossible to keep track of every possible violation. However, the larger your business, the more important it is to hire an HR team to push the envelope on compliance. Here are some of the reasons for the most commonly assessed HR fines:
The Affordable Care Act
The Affordable Care Act levies HR fines of $3,000 for each employee who is not covered by affordable insurance health insurance and $2,000 for employees who are not covered by any health insurance. That seems backwards, but both violations can accrue penalties for 12 other related violations and an additional $100 per day until the situation is corrected. You could end up paying $500,000 in HR fines and penalties.
1. The Equal Pay Act
The Equal Pay Act requires that men and women be paid equal amounts for the same job in the same workplace. The jobs must be relatively equal and not require a more experienced or skilled worker in one job and not the other. It’s important to know that this law only affects pay between men and women and not any inequities based on race, color, religion or national origin. Pay inequities among these groups are covered by federal anti-discrimination laws.
2. Americans with Disabilities Act
The Americans with Disabilities Act has complicated rules. Some people with disabilities genuinely can’t do certain jobs, but accommodations can be made for many disabled workers. The law prohibits discrimination based on a disability that doesn’t affect a person’s ability to do the job. Violations of the ADA are prosecuted by the Justice Department, and it doesn’t mess around. First-time violations can result in up to a $55,000 fine. Repeat offenses can result in a penalty of $110,000.
3. The Fair Labor Standards Act
This employer regulation establishes a minimum wage, child labor standards, overtime pay, and record-keeping guidelines. Violations can result in awards of back pay with interest and up to a $1,100 fine per violation. There is an additional penalty of $50,000 if work-related activities result in the death of a minor.
4. COBRA – The Consolidated Omnibus Budget Reconciliation Act of 1985
COBRA mandates that employers continue an employee’s health insurance coverage for terminated employees and their families. Termination can be for any reason other than gross misconduct. Further caveats include:
- The insurance plan must be covered by COBRA.
- The employee must be a qualifying beneficiary, which means he or she must have been covered on the day of the qualifying event.
- Qualifying events include reduction of hours, layoffs, separation or divorce, death of the worker or his or her child or a child losing dependent status while under the plan.
The length of time that insurance coverage must continue varies based on the qualifying event and certain special circumstances. The maximum length of coverage is usually 18 months, but it can be extended in special circumstances.
Under President Trump’s immigration-tightening policies, I-9 violations have increased substantially. I-9 forms are used to verify a worker’s right to work in the United States. They’re used to prevent illegal immigrants from working and to identify tax evaders. The information also has to be checked over the phone or the internet to receive employment authorization. Failure to comply can result in I-9 violation penalties, which were recently increased to the following HR penalty amounts:
- Minimum fine for technical violations – $230
- Maximum fine for technical violations – $2,292
- First offense when knowingly hiring an unauthorized worker – $573 – $4,586
- Second offense when knowingly hiring an unauthorized worker – $4,586 – $11,463
- Third offense when knowingly hiring an unauthorized worker – $6,878 – $22,927
Employers who rely on paper I-9s run the risk of audits. ICE typically flags 60 percent to 80 percent of these.
If you have had HR fines in the past or want to avoid ever being fined, outsource your HR to our experts who will prevent HR compliance fines for your company.
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