By Mary Dunlap, CFP®, and Debra M. Girvin, SPHR
If you employ anyone other than yourself, there are myriad personnel issues you need to be aware of, including how to handle workplace harassment and implications of the Family and Medical Leave Act. As a follow-up to the November/December 2009 Practice Management Solutions article, "Human Capital Best Practices," here are six more HR topics to keep on your radar screen. Remember: good employees can be the key to your success, and fumbling the employer-employee relationship can create unnecessary stress and ill will for you and your employees.
Maintain Complete I-9 Forms
The purpose of a Form I-9 is to document that a new employee is authorized to work in the United States, whether the employee is a U.S. citizen or not.
The new employee must furnish original documents that establish his or her identity and citizenship within three business days of the employment start date. The employee must choose the documents he or she furnishes. Any guidance you give can be interpreted as discrimination. Acceptable documents include U.S. passports or passports cards, permanent resident cards or foreign passports with proper immigrant visas.
If any right-to-work document supplied has an expiration date or if any employee is hired again in the future, you must re-verify the information.
A self-employed person who is an employee of a business, say a partnership or corporation, will also have to complete Form I-9.
As an employer, if you fail to properly complete, retain or make these forms available for inspection as required by law, you could pay up to $1,100 for each violation. If you commit discrimination through specifically requesting or denying use of certain documents, or an employee perceives discrimination, you could face a fine up to $3,200 for a first offense and up to $6,500 for a second offense. Download a PDF version of the form from the U.S. Citizenship and Immigration Services Web site at www.uscis.gov.
Post Required Notices
It may seem like a minor detail, but ensuring you have the appropriate posters and notices required by state and federal law visible in your workplace can prevent penalties and audits.
The Department of Labor mandates several workplace poster requirements for small businesses, including equal employment opportunity notices and minimum wage information. However, not all small businesses are required to post all notices. The Department of Labor offers information on which posters are required by which businesses at www.dol.gov/osbp/sbrefa/poster/matrix.htm, where you can also access and print free copies of any required posters. If you need help determining which posters may be required for your business, go to www.dol.gov/elaws/posters.htm, for guidance.
Also, be sure to visit your state's Department of Labor Web site for information on state-required posters and notices.
Some companies provide all the required postings-state and federal-for a fee, including G. Neil (www.gneil.com), which will send you notification of any changes. Many required posters can also be purchased at office supply retailers such as OfficeMax and Staples.
Check Your Workers' Compensation Insurance
Workers' compensation insurance policies cover employees when there is an injury at the employer's workplace. Working on company business off site-especially working from home or working on the road-that results in injury or illness should also be accounted for in a workers' compensation policy. You may need to check with your insurer or your state's insurance department for details on how to account for work-related injuries and illnesses that happen outside the workplace.
Employers can obtain insurance from private carriers, and some jurisdictions require employers to participate in state funds. Find out what is required in your state by contacting your state insurance department.
Premiums for workers' comp policies can be controlled by giving accurate descriptions of the injuries, determining if the affected employee could come back to work in a different position, communicating with the workers' comp adjuster on the progress of the employee and using professional counsel when determining your options.
Accurately Classify Independent Contractors and Employees
In an effort to potentially save money, business owners may be taking a closer look at hiring an independent contractor or hiring an employee. Both situations have pros and cons, and the article, "Independent Contractor or Employee?" from the July/August 2009 issue of Practice Management Solutions delves into this issue in detail.
Understanding how the Internal Revenue Service and state regulators classify independent contractors and employees will help you determine who to hire so you don't waste thousands of dollars, end up dissatisfied, deliver poor results to clients or risk government penalties from audits.
Incorrectly classifying a worker can lead to a variety of penalties, ranging from 15 percent to more than 40 percent of worker compensation for the effective time period. You could also incur penalties for not collecting Social Security payments. The IRS also looks to see if you intentionally misclassified workers to avoid certain levels of compensation from being considered in retirement plan contributions. As a result, your retirement plan could lose its tax-qualified status.
Know the Implications of the Family and Medical Leave Act
The first thing to know about the Family and Medical Leave Act (FMLA) is that it only applies to employers with 50 or more employees. If this excludes you, keep reading, because the act could still have implications for your business.
For example, you may want to use the act as a guideline for putting together your own leave policy to help balance your business's and your employees' personal obligations. Having a clear policy for maternity, paternity and family medical leave can boost employee morale. And, by understanding FMLA, you can offer a competitive alternative to what other businesses with 50-plus employees offer.
The act is designed to assure employees that they will not lose their jobs if they needed to take time off for family or personal needs. Here are the basics:
- Employees are eligible for leave if they have worked for an employer a minimum of one year-at least 1,250 hours during the 12 months previous to the start of leave.
- The employer provides up to 12 weeks of unpaid leave with the condition that the employee's position or the equivalent is available upon return.
As an employer, you can be proactive and avoid misunderstandings during emotional times by putting into place a comprehensive FMLA or other leave policy. This policy should cover:
- Statement that any leave for FMLA purposes (paid or unpaid) count toward the allowed 12 weeks
- Clear definition of conditions that warrant use of FMLA time so that there is no misunderstanding that time was taken for FMLA purposes
- The employee provides sufficient information so that the employer knows the leave is under FMLA
- Encourage employees to work with you to verifying eligibility for FMLA leave in advance of use
- Encourage employees to question decisions or information about the leave so that appeals by employees can occur internally and be resolved without outside intervention
- The employer should communicate policies on items left to employer discretion so that all employees know what to expect
Provide Training on Workplace Harassment and Safety
In today's culturally diverse workplace, there are possibilities for unintentionally offending others through language, jokes and touches.
Employers need to have a process for employees to communicate what is happening, for employers to investigate appropriately and discipline according to severity with steps to prevent future happenings. Provide training to all team members on harassment prevention, reporting and investigation.
Some things to keep in mind:
- The victim of harassment does not necessarily need to be the opposite sex.
- Someone can be a victim of harassment without being directly harassed.
- Victims do not have to directly complain to the harasser or report harassment to the employer for an employer to be liable.
- Someone does not have to suffer a concrete economic loss to be harassed.
For more information specific to small businesses visit the U.S. Equal Employment Opportunity Commission's Web site at www.eeoc.gov/policy/docs/harassment-facts.html.
As an employer, you also need to address other workplace safety issues, such as violence, particularly when employees are terminated and escorted off the property. Employers may be liable for inaction to prevent hazardous or violent acts conducted in the workplace.
To ensure you have the appropriate policies, training and forms in place, conduct a human resource audit each year. Using an expert will help address these issues comprehensively and effectively.
Mary Dunlap, CFP®, of Mary Dunlap Consulting, helps financial planning firms attract, develop and retain the best people for their teams. Debra M. Girvin, SPHR, has worked in human resources and benefits management since 1985. Both Dunlap and Girvin are members of the Society for Human Resource Management. Contact them at email@example.com . This article provides general information, which is not a substitute for legal or other professional advice.