For hospitality and service operators, years of experience and training make front-of-house responsibilities feel like second nature. Yet, when it comes to the back office, critical processes such as payroll management, job application review, and HR compliance present potentially dangerous pitfalls that could leave your business vulnerable to fines and lawsuits.
A survey from the U.S. Department of Labor (DOL) found about 56 percent of employees are eligible for the Family Medical Leave Act (FMLA). Do you know which employees qualify and what steps you are taking take to ensure compliance? Every operator needs to know the answers to these types of questions.
We sat down with Gene Cabrera, one of Fourth’s Payroll and HR compliance experts, to get a sense of how operators can ensure their business remains aligned with federal and state law.
What significant, new compliance laws have federal/state governments passed, and what’s on the horizon?
There are a few top regulations that affect employers in maintaining HR compliance. First, most states have adopted Ban the Box laws. Ban the Box laws no longer allow employers to ask pre-employment salary questions and prevents them from inquiring about a candidate’s criminal history until later in the hiring process. It’s important hiring managers and interviewers are trained in these laws.
Secondly, workplace safety is constantly evolving to keep employees safe. The cost of an Occupational Safety and Health Administration (OSHA) penalty can have a significant financial impact on a business. To avoid citations, file worker’s compensation claims quickly, and have employees report accidents immediately. Keeping up to date with OSHA regulations and maintaining safety standards will minimize the risk of lawsuits and fines. You can keep abreast of OSHA policy changes directly on their website.
The Family Medical and Leave Act (FMLA) has been in discussions recently with the current Administration. The Administration is a major advocate for mandated paid maternity leave. This law could potentially come to fruition. For now, it’s important that operators understand and know their federal and state standards, as standards vary by state.
How regulations impact operations for hospitality and service businesses and what are the dangers of noncompliance?
Regulations are constantly changing and impacting the hospitality and service industry. This is nothing new. It’s about being prepared and providing the proper knowledge and training to your HR staff. This is what’s key for maintaining compliance.
For example, hiring managers who have not been trained in regulations regarding what can be asked or not asked of candidates during the interview process, often leave their employers vulnerable to potential fines and lawsuits. And when it comes to extended medical leave, many businesses with an hourly workforce may not be prepared to pay for an employees’ maternity leave or deal with the paperwork that comes along with current and proposed FMLA laws.
The burden of noncompliance most times falls on HR department. Noncompliance of federal and state regulations can result in large penalties and legal action from the DOL, OSHA and the Equal Employment Opportunity Commission. This could cost a business thousands of dollars in fines and attorney fees, in addition to a lot of wasted time trying to defend the case.
Identifying federal, state, and local laws and regulations applicable to your business and industry are challenging for many operators. That’s why many businesses choose to outsource part or all their HR functions to a professional employer organization (PEO). PEO-type services can help businesses automate and streamline payroll, onboarding and recruitment, benefit administration, and more. Offloading these HR functions and compliance related tasks to experts protects a business from noncompliance and allows for growth and better employee morale and retention.
How does Fourth ensure operators maintain HR compliance?
Here are a few examples of how we can help:
- We ensure the employee application used through the Applicant Tracking System (ATS) is up to date with all applicable federal and state laws, and our paper application (if the client is not using ATS) has been vetted to ensure it meets the strictest requirements.
- We train our clients and provide training to their hiring managers on the dos and don’ts when interviewing, as well as manage the paperwork for current FMLA laws.
- We streamline the hire-to-pay process, reducing compliance risk and mistakes through our integrated solutions. As HR and payroll experts, our PEO services can help minimize payroll and HR administrative burdens and the risk of non-compliance. (Related: Drowning in Cumbersome Payroll Compliance? Here Are the Benefits of a PEO)
Hiring, OSHA standards and FMLA only cover the tip of the HR compliance iceberg. Topics such as FSLA, overtime premium calculations, day of rest requirements, and spread of hours contain numerous potential pitfalls that put even the most careful businesses at risk.
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