When it comes to compliance, what should your organization be focusing on in 2020?
Published in NH Business Review (2/14/2020)
It is officially 2020 — the beginning of a new year and a new decade. The holiday madness is over, and now it is time to get back to work and make sure your company is on track and in compliance in the new year.
Here are some recommendations, reminders and tips to get your company off to a good start in 2020.
1. Review exempt employees’ salary to ensure they meet the new federal overtime salary threshold of $35,568.
To be exempt from overtime under the Fair Labor Standards Act (FLSA), an employee must be paid a minimum salary and meet certain duties tests, for example, as an executive, administrative or professional employee. On Jan. 1, the minimum annual salary increased from $23,660 ($455 per week) to $35,568 ($684 per week).
If an employee is not paid this minimum salary, the employee is not exempt and must be paid overtime, regardless of whether the employee meets the duties test. Now is a good time to review the salaries of your exempt workers to make sure they are equal to or greater than the new salary threshold.
2. Perform a self-audit to ensure your company is in compliance with state and federal laws.
• Worker classifications: While you are reviewing the salaries of your exempt workers to ensure they meet the new FLSA salary threshold, you should at the same time review your worker classifications to ensure employees are properly classified as exempt or non-exempt based on the duties test and workers are properly classified as employees or independent contractors.
• Personnel files: Are your personnel files up to date and in compliance with the law? For example, make sure you are storing confidential medical and background check information separately. If you require some or all of your employees to sign noncompetition and/or non-solicitation agreements, make sure those agreements comply with New Hampshire law. Remember, as of September 2019, New Hampshire employers are prohibited from requiring certain low-wage employees from signing a noncompetition agreement.
• Payroll practices: How accurate is your timekeeping system? Do time records accurately reflect all hours employees work? Are employees being paid the correct rate for time worked? Are supervisors changing time entries without notice to the employee? The law requires companies to keep accurate time records for exempt employees and to pay them overtime at their “regular” rate of pay.
The U.S. Department of Labor recently issued some guidance to clarify that sometimes confusing calculation.
• Massachusetts employees: If you have Massachusetts employees, make sure you are complying with the new Paid Family and Medical Leave Act by remitting the appropriate contributions for these employees through MassTaxConnect. Massachusetts employees are also subject to the Massachusetts Equal Pay Act, which requires equal pay for comparable (not simply the same) work. Now is a good time to review your pay practices to ensure pay equity for all of your employees.
3. Update your employee handbook.
When was the last time you updated your employee handbook? New laws go into effect each year, so it is important to update your handbook on at least an annual basis. Look at how effectively (or ineffectively) your handbook sets out your company policies.
Is your handbook a useful tool for your employees? Some handbooks are too dense and legalistic. Some are confusing, poorly written and inconsistent. Take the time to review yours now. And if your company does not have an employee handbook, there is no better time than 2020 to create one.
4. Train your managers to manage within the law and to follow company policies.
Do you have a training specifically for your managers, i.e. all of your employees who supervise other employees in one way or another? These are the employees who can get your company into legal trouble.
They should have a working knowledge of employment laws. They should know when to document an employee issue or concern and when to report a matter to human resources. They should also know the company’s discipline policy and its procedures for addressing employee complaints, disputes and other potentially problematic situations. Do not leave them in the dark. Give them the tools to be a great manager and avoid a sticky legal situation for the company.
5. Conduct comprehensive training for your entire workforce.
After you train your managers, you should also conduct comprehensive training for your entire workforce on harassment, discrimination, bullying and civility. The costs of not doing so are too great. Workplace harassment, discrimination and bullying can expose the company to liability, especially where the company has not shown an effort to avoid these issues through proper training.
You might ask why should you train your employees on civility? Incivility in the workplace can lead to high employee turnover, distracted and inefficient workers, low morale, depression and stress, and a loss of reputation. It is also a precursor to harassment and discrimination. The world is not the same as it was a decade ago. Customers, supervisors and employees are more demanding and entitled. We all have the ability to communicate at all hours of the day through electronic devices and social media. The Equal Employment Opportunity Commission recommends including incivility in workforce training and that the training be live, interactive and workplace specific rather than generic and done over the internet.
6. Consult with counsel.
Some of the recommendations and reminders above involve complex areas of the law. If you have questions about any of them, do not hesitate to consult with your attorney.
Charla Stevens, a director in McLane Middleton’s Litigation Department and chair of the firm’s Employment Law Practice Group, can be reached at 603-628-1636 or [email protected]. Alexandra Geiger, an attorney in McLane Middleton’s Employment Law Practice Group, can be reached at 603-628-1483 or [email protected].