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CONTENTS:
1. Introduction 2. Strengths of HR Professionals 3. Communication is Key 4. Difficulties of New Regulations 5. Top 5 Compliance Concerns 6. What Makes an Effective Compliance Program? 7. 7 Pillars of Compliance Programs 8. Evaluate your Compliance Program 9. How to Make an Impact 10. Federal Labor Laws
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Introduction This guide serves to help HR Professionals develop/enhance their new/current Compliance Program and to raise awareness about government regulations that effect the Human Resource industry. HR has a role to play in establishing an organization’s Compliance Program (CP) and culture, according to workplace law experts. Breaking down crossfunctional silos, building credibility by knowing relevant laws and drawing on existing competencies are the strengths and tools HR needs to use. Compliance and ethics programs need to be embedded into an organization to prevent non compliant conduct and to provide a mechanism for detecting and deterring it.
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Strengths of HR Professionals HR in many organizations is really looked at as the standard-bearer for ethics and compliance, and many people now leading up this function started in HR. Below, are some of the key strengths that HR Professionals possess: █ Drafting, deploying and enforcing workplace policies █ Fielding formal and informal complaints █ Directing, conducting or participating in investigations █ Recommending employee discipline for policy violations █ Training
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Communication is Key HR professionals should ensure there are clear and appropriate avenues through which employees can raise concerns and help monitor compliance developments and the compliance culture. They should also coordinate with the Chief Compliance Officer on the design and implementation of comprehensive communications strategy to promote compliance throughout the organization.
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Difficulties of New Regulations It’s not surprising that compliance is keeping the C-suite awake, driving board expectations and generating more scrutiny from audit committees and government regulators. Penalties for non-compliance can include multimilliondollar fines and, in some cases, jail time. Recent cases, governmental guidelines and new statutes are raising the bar. Be aware of specific laws and regulations that affect your industry and/or organization and make certain that they are at the core of every decision you make for your program.
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Top 5 Compliance Concerns It is difficult to pinpoint which issues will be of most concern, but with as the economic horizon continues to shift - and with the implementation of the Affordable Care Act (ACA) - here are the issues that HR Professionals should keep an eye out for. █ Affordable Care Act (ACA). Specifically, the “30/130” rule that says employees with more than 30 hours of service per week or 130 hours of service per month must be offered health care benefits. █ Misclassification of Employees. Employee vs. Independent Contractor, Exempt vs. Non-exempt █ I-9 Compliance. ICE has been dealing record numbers of administration fees due to improper completion of Form I-9. █ EEOC / ADA Enforcement. Race, pregnancy, and disability discrimination are at the forefront of the focus along with retaliation claims. █ Federal Contractors and Compensation Discrimination. Promoting equal pay is another focus of the Obama Administration. The fact that the Lily Ledbetter Act was the first piece of legislation that the President signed into law speaks to this focus.
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What Makes an Effective CP? Auditors and government regulators are stating that most companies compliance programs are too individual-based. Having a good compliance officer is not enough, compliance needs to be at the core of every organizations DNA. There is no such thing as a “plug-and-play� code of conduct or compliance program. Instead, companies need to take into account their culture, size, industry, geographic location, history and risks and make decisions based on what is right for their organization.
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7 Pillars of Effective CP’s
â–ˆ Written standards, policies and procedure, such as a code of conduct and gift and entertainment policies.
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7 Pillars of Effective CP’s
█ Independent senior compliance authority. The program is run by someone with a “high level of visibility and respect” who is independent from revenue generating areas, such as sales.
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7 Pillars of Effective CP’s
â–ˆ Education and training. The program broadcasts written standards and procedures and promotes them through on-line or live training.
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7 Pillars of Effective CP’s
█ Self auditing and monitoring. Try making a “fake” call to the company on-line to see how the compliance officer responds.
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7 Pillars of Effective CP’s
â–ˆ Enforcement, discipline and incentives. The program makes clear that there are consequences to wrongdoing and incentives for reporting misconduct.
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7 Pillars of Effective CP’s
â–ˆ Reporting channel. In addition to anonymous hot-lines, a good compliance program has things like business unit compliance liaisons for reporting concerns.
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7 Pillars of Effective CP’s
█ Response and prevention. If the same issues arise repeatedly, it’s clear that it may be time to adjust policies and training.
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Evaluate Your CP Compliance programs can be evaluated using surveys, benchmarking and focus groups to gauge employee understanding. Review invoices and expenses in “high-risk areas” and conduct regular self-assessments. A lot of companies have compliance committees that meet on a monthly basis and conduct qualitative analysis. Exit interviews can also provide candid feedback on a company’s compliance program. Click here to learn more about how to get better employee feedback
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How to Make an Impact HR Professionals that are looking to make an impact on their organization’s commitment to compliance should do the following: █ Learn and Research. Your impact starts with having credibility, and credibility starts with knowledge. █ Influence the structure of the organization’s compliance program. Are essential stakeholders involved and does the program allow people to work in an integrated and coordinated way? █ Leverage policy and training expertise. Make sure policies are consistent and coordinated. Consider “curriculum mapping.” Determine appropriate training groups, and then sequence training to cover necessary topics and provide an adequate refresher without overwhelming employees. █ Ensure clear and appropriate avenues for employees to raise concerns and to ask ethics and compliance questions internally. Make sure managers are trained to recognize a complaint, address it—almost always involving HR or senior management—and to not retaliate. █ Help monitor compliance developments, culture, and the work environment, and then adapt the compliance program accordingly. Check out our blog “6 HR Competencies That Matter Most” to learn how to maximize your level of impact!
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Federal Labor Laws Below is a list of federal labor laws with a brief description and a link to a website for more information. They are broken down by number of employees in an organization. 1-14 EMPLOYEES Health Insurance Portability and Accountability Act (HIPAA)
Provides protections for participants and beneficiaries in group health plans, including limiting exclusions for preexisting conditions and general health conditions. Also establishes privacy protections for employees against unauthorized disclosure of health related information.
Fair Labor Standards Act (FLSA) (1938)
Regulates the status of employees (versus independent contractors) and provides for a minimum wage and overtime unless the employee meets an exempt classification.
Immigration Reform & Control Act (IRCA) (1986)
Requires that new employees provide specific documents to employers showing that they are who they claim to be and that they have a legal right to work in the United States. (I-9 forms)
Employee Polygraph Protection Act (1988)
Prohibits employers from requiring pre-employment polygraph examinations.
Uniformed Services Employment & Re-employment Rights Act (1994)
Prohibits discrimination against military service members because of past, current, or future military service. Protects military service workers‚ employment rights and benefits of employment.
Equal Pay Act (1963)
Prohibits wage discrimination by requiring equal pay for equal work of the same skills, effort, and responsibilities.
Consumer Credits Protection Act (1968)
Sets a national maximum limit on the amount of an employee‚s wages that can be withheld to satisfy wage garnishment.
National Labor Relations Act (NLRA) (Wagner Act) (1935)
Prohibits employers from certain unfair labor practices. Primary responsibility for enforcement rests on the National Labor Relations Board.
Labor-Management Relations Act (Taft-Hartley) (1947)
Protects management rights by prohibiting certain unfair labor practices by unions.
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Federal Labor Laws 1-14 EMPLOYEES Employee Retirement Income Security Act (ERISA) (if offer benefits) (1974)
Establishes standards and requirements for the administration of employee benefit and welfare plans, to ensure employees will actually receive monies they set aside for a pension plan. The act also covers part-time employees working 1,000 hours a year.
Uniform Guidelines on Employee Selection Procedures (1978)
Prohibits selection polices and practices from having an adverse impact on the employment opportunities for any race, sex, or ethnic group unless it is a business necessity.
Federal Insurance Contribution‚s Act (FICA) (1935)
A federal payroll tax imposed on both employees and employers to fund Social Security and Medicare, which provides benefits to retirees, disabled, and children of deceased workers.
Occupational Safety & Health Act (OSHA) (1970)
Mandates compliance with federal health & safety standards. Employers with fewer than 10 employees are exempt from certain reporting requirements.
15-19 EMPLOYEES (ADD) Genetic Information Nondiscrimination Act (GINA)
Prohibits health insurers from discriminating based upon genetic information. Also prohibits employers from requesting or requiring employees or family members to provide genetic information.
Title VII, Civil Rights Act (1964) (1991)
Prohibits the discrimination in all terms and conditions of employment (including pay and benefits) on the basis of race, religion, ethnic group, sex, national origin, or disability.
Title I, Americans with Disabilities Act (1990)
Protects qualified individuals with disabilities from unlawful discrimination in employment. Discrimination is prohibited if the individual can do the essential job functions. An employer must make reasonable accommodations for such individuals unless doing so would place an undue hardship on the employer.
Pregnancy Discrimination Act (1978)
Protects pregnant employees from being forced to resign or take a leave of absence.
Fair Credit Reporting Act (FCRA) (1970)
Defines employees’ and potential employees’ rights regarding employers using information obtained by reports compiled by third party credit reporting agencies as the basis for employment decisions.
Fair and Accurate Credit Transactions Act (FACTA) (2003)
A federal law that requires employers to take reasonable measures to reduce the risk of identity theft and other harm to their employees, resulting from the employer’s failure to properly dispose of confidential records.
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Federal Labor Laws 20-49 (ADD) Age Discrimination in Employment Act (ADEA) (1967)
Prohibits discrimination in employment for persons 40 and over. Prohibits mandatory retirement ages.
Consolidated Omnibus Budget Reconciliation Act (COBRA) (1985)
Requires employers to permit employees to extend their health insurance coverage at group rates for up to 36 months following a qualifying event.
50-99 (ADD)
Family Medical Leave Act (FMLA) (1993)
Provides that employees who have worked at least 12 months and at least 1,250 hours in the previous 12 months are eligible to take up to 12 weeks leave during any 12 month period for the purposes of: birth, adoption, or foster care of a child; caring for a spouse, child, or parent who has a serious health condition; or serious health condition of employee. Additionally, the National Defense Authorization Act of 2008 amends FMLA to allow a spouse, parent, son, daughter or next of kin up to 26 weeks to care for a member of the armed services suffering injuries or illness sustained while on active duty. Allows 12 weeks unpaid leave for a “qualifying exigency� for a son, daughter, parent or spouse on active duty.
(Federal Contractors) EEO-1 Report filed annually with EEOC
Requires federal contractors, with contracts valued at > $50,000, to submit a list of the number of employees by race and sex for each EEO job category.
GREATER THAN 99 (ADD) Worker Adjustment & Retraining Notification Act (WARN) (1989)
Requires employers to give notice of plant closings or layoffs.
EEO-1 Report filed annually with EEOC if not a federal contractor
Requires employers to submit a list of the number of employees by race and sex for each EEO job category.
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Federal Labor Laws FEDERAL CONTRACTORS (Federal Contractors) Executive Orders 11246 (1965), 11375 (1967), 11478 (1969)
Prohibits federal contractors, with contracts valued at > $10,000, from discrimination on the basis of race, color, religion, sex, or national origin. In addition, the federal contractor must develop a written affirmative action plan, based upon the stipulations of each Executive Order.
(Federal Contractors) Vocational Rehabilitation Act (1971)
Prohibits federal contractors, with contracts valued at > $10,000, from discriminating against people with physical or mental disabilities by requiring the contractor to take affirmative action in employing and advancing disabled individuals.
(Federal Contractors) Drug Free Workplace Act (1988)
Requires some federal contractors to have a written drug-use policies and follow certain requirements to certify that they maintain a drug-free workplace.
(Federal Contractors) Vietnam-Era Veterans Adjustment Act (1974)
Requires federal contractors, with contracts valued at > $25,000, to take affirmative action in hiring and promoting of Vietnam-era veterans, special disabled veterans, and veterans who served on active duty during a war or in a campaign or expedition for which a campaign badge has been authorized. All job opportunities must be registered with local employment services.
(Federal Contractors) Davis Bacon Act (1931)
Requires federal contractors, with contracts valued at > $2,000, performing construction, alteration, repair, painting or decoration on public buildings or public works to pay minimum wage rates for similar jobs in the community.
(Federal Contractors) Copeland Act (1934)
Precludes federal contractors from inducing an employee to give up any part of compensation they are entitled (anti-kickback).
McNamara-O’Hara Service Contract Act
Requires federal contractors, with contracts valued at > $2,500, performing service, using service employees for the United States, to pay minimum wage rates for similar jobs in the community.
(Federal Contractors) Walsh-Healy Act (1936)
Requires federal contractors, with contracts valued at > $10,000, to pay wages equal to the area including minimum wage and overtime.
*This is a summary of some of the federal human resources legislation which growing businesses should be aware of. It is by no means meant to be exhaustive of all legislation, nor is it meant to be interpreted as detailing the exact requirements of each law. Specific questions and actions should be directed to a consultant or employment attorney.
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Sources http://www.compdrug.org/guide.htm http://www.lectlaw.com/files/emp03.htm http://www.thirteen.org/closetohome/pdf/CTHemployer.pdf http://www.businessgrouphealth.org/pub/f3151957-2354-d714-5191-c11a80a07294 http://www.tn.gov/labor-wfd/Publications/WC/df_employer_pro_book.pdf http://www.abramslaw.com/a_guide_to_dealing_with_workplace_substance_abuse_-_nysba__publication_ media_id_1104
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