HIGHER THINKING BLOG
3 Labor Law Issues that Can Destroy Your Organization
Are you complying with all the proper state and federal labor laws?
If not, it could cost you everything.
In large corporations, an entire human resources (HR) department navigates the complex minefield of federal and state labor laws. Most small organizations think of HR as an afterthought, or HR responsibilities like hiring, benefits, compliance, and payroll falls to a few people who aren’t properly trained. This can be a pricey mistake. Laws concerning overtime, unlawful termination, and equal rights are just a few areas that trip up organizations, big and small, all the time.
Labor laws fill volumes and are quite complex. Plus, labor laws vary from state to state! Even Walmart ran into trouble recently and incurred $4.83 million dollars in back wages, penalties, and fines for violating The Fair Labor Standards Act. The mistake? Managers were misclassified and not appropriately compensated for overtime work. Unlawful termination is another problem that has cost organizations like UPS, Carmike Cinemas, and Dial Corporation dearly. Yes, it’s tricky. Do you know the laws?
It gets worse—the government is ramping up efforts to check up on organizations and crack down. The Obama administration has allotted $25 million for the sole purpose of investigating those misclassified as “independent contractors,” hoping to reclaim lost tax revenue and pad the IRS’s coffers. Be smart. Remember that stiff penalties and lawyer fees can decimate your organization. Are your workers properly classified?
Stay legal and remember these 3 key points:
• Child labor, non-resident labor, and equal rights legislation are the three areas where small organizations most often fail to comply.
• Both state and federal labor information is free and available online.
• Outsourcing with an HR professional firm can save your organization a lot of time and money.
Most organizations with fewer than 100 people benefit from outsourcing labor law compliance and other human resource tasks to HR professionals. The alternative is risky: employees are often uninformed about and under-trained in labor law compliance. Look out! Federal fines could be in store for you. In addition, HR often falls outside an employee’s main job focus, so getting it wrong or spending valuable time away from primary tasks can cripple productivity in a small organization. Get the right person trained or on your team to comply with labor laws.
Regrettably, staying legal has never been more difficult or important.
Make sure to get the help you need right away.
Mark Griffin is founder and Chief Consultant at In His Name HR LLC. He has over 20 years of HR experience. Learn more about Mark’s journey in HR by watching this short video. In addition you can also follow him on Facebook, Twitter and LinkedIn.
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