Are you an employer that is unclear of the value of Human Resources as a business partner? Or maybe you’re a small employer and do not have the resources to hire a dedicated HR professional? No matter your company’s status – there are several legal fundamentals that you’ll want to comply with in order to keep out of hot water and avoid costly fees.
All employers are required to complete this document for new employees. The new hire must complete the Employee section no later than the first day of employment and employers must complete the Employer section within 3 business days of the employee’s start date – the form is used to verify an employee’s identity and their right to work within the United States. Visit the US Department of Homeland Security’s website for more information and obtain a copy of the form: http://www.uscis.gov/i-9. You may be subject to monetary penalties if you do not comply with I-9 requirements. Audits are completed by ICE (Immigration and Customs Enforcement), the investigative arm of the US Department of Homeland Security.
Exempt versus Non-Exempt
Knowing how to classify your employees under the Fair Labor Standards Act (FLSA) is crucial to ensuring your employees are paid correctly. Nonexempt employees are entitled to overtime pay and exempt employees are not. You cannot classify an employee as exempt solely to avoid paying overtime. Instead, employers must decide whether the employee’s job is considered exempt from wage and hour requirements based on complex FLSA classifications set by the US Department of Labor. For a reference guide on classifying your employees, visit http://www.dol.gov/whd/regs/compliance/fairpay/fs17a_overview.pdf. The ramifications of misclassifying your employees can be very costly – you could owe back pay to the employee for unpaid overtime and also face criminal penalties if the violation is willful.
Minimum Wage + Overtime Pay
For non-exempt employees, you are required to pay at least the Federal minimum wage, currently $7.25 an hour, and overtime pay of one-and-one-half-times the regular rate of pay for hours worked above 40 in a given workweek. Minimum wages and overtime laws may vary by state. Where Federal and State laws have different minimum wage rates, the higher rate applies. Where Federal and State laws have different overtime laws, the higher overtime pay applies. For a detailed map of your state’s minimum wage guidelines, visit http://www.dol.gov/whd/minwage/america.htm.
Family and Medical Leave Act (FMLA)
This Act applies to employers with 50 or more employees within a 75-mile radius. You must provide eligible employees unpaid, job-protected leave with continuation of group health insurance coverage for up to 12 workweeks in a 12-month period for: the birth and care of a newborn child; the placement and care of a child for adoption or foster care; a serious health condition of the employee or employee’s spouse, child or parent; or qualifying exigencies arising out of a covered military member’s covered active duty status. You must also provide up to 26 workweeks of leave to care for a covered service member with a serious illness or injury.
Posting the Facts
Some of the regulations enforced by the US Department of Labor require that notices be provided to employees and/or posted in the workplace. Most employers are required to hang posters notifying employees of important regulations. If you are, posters must be located where they can be readily seen by employees and, in some instances, applicants. All employees must have access to the required posters so displaying them in all of your offices and having electronic versions posted to your intranet for remote employees will help to ensure that you are in compliance. For free, printable posters, visit http://www.dol.gov/elaws/posters.htm.
Income Tax Withholding Forms
You are required to have an employee complete both Federal (W-4) and State (if applicable) tax forms before issuing their first paycheck. Employers should not give advice on how to complete these forms, but can direct employees to a tax advisor. For a copy of the 2014 W-4, visit http://www.irs.gov/pub/irs-pdf/fw4.pdf. For a list of the State forms, visit http://www.bls.gov/jobs/statetax.htm.
Equal Employment Opportunity Commission (EEOC) Laws on Discrimination
Most EEOC laws cover employers with 15 or more employees and apply to all types of employment situations, including hiring, firing and promoting. The EEOC can investigate and file lawsuits against your company for charges of discrimination by your applicants and/or employees. For detailed information on the EEOC, visit http://www.eeoc.gov/eeoc/.
- Title VII of the Civil Rights Act makes it illegal to discriminate against someone on the basis of race, color, religion, national origin, or sex
- Pregnancy Discrimination Act makes it illegal to discriminate against a woman because of pregnancy or childbirth or a medical condition related to either.
- Equal Pay Act makes it illegal to pay different wages to women and men for performing equal work in the same workplace.
- Age Discrimination in Employment Act makes it illegal to discriminate against people who are 40 years of age or older.
- Americans with Disabilities Act makes it illegal to discriminate against someone with a disability.
Toolbox – Additional Resources
COBRA gives employees and their families the option to continue group health benefits after they leave a job. There are restrictions on time periods and who is covered based on the circumstances in which the employee left their company. For more information, visit http://www.dol.gov/ebsa/faqs/faq-consumer-cobra.html.
Workers' Compensation provides monetary benefits to employees that are injured on the job and is administered on a state-by-state basis. For more information, visit http://www.dol.gov/owcp/dfec/regs/compliance/wc.htm.
The information provided in this article is not intended to, and does not, constitute legal advice. There are laws and regulations that may apply to you in addition to those mentioned above, and you should consult with your own counsel in addition to reviewing the information provided here.
The views, opinions, beliefs, conclusions, and other information expressed in this material is not given, verified, or endorsed by Square 1 Financial, Inc. or any of its affiliates. Instead, this material is solely the work of the author, and represents his views, opinions, beliefs, conclusions, and other information he wishes to present, in all cases without any manner of endorsement from or verification by Square 1 Financial, Inc. or any of its affiliates.
This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that the author believes to be reliable, but which has not been independently verified by the author, Square 1 Bank, or any Square 1 affiliate, and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal, or other advice, nor is it to be relied on in making an investment or other decision. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to this material should be construed as a solicitation, offer, or recommendation to acquire or dispose of any investment, or to engage in any other transaction.
All material presented, unless specifically indicated otherwise, is under copyright to the author or Square 1 Financial, Inc. (or its affiliates), and is for informational purposes only. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied, or distributed to any other party, without the prior express written permission of Square 1 Financial, Inc. or the author. All trademarks, service marks, and logos used in this material are trademarks, service marks, or registered trademarks of Square 1 Financial, Inc. or one of its affiliates.
Square 1 Bank is a member of FDIC and Federal Reserve System. Square 1 Bank and the Square 1 logo are among the trademarks registered to Square 1 Financial, Inc. Square 1 Asset Management, a registered investment advisor, is a non-bank affiliate of Square 1 Bank. Products offered by Square 1 Asset Management are not FDIC insured, are not deposits or other obligations of Square 1 Bank, and may lose value.
Back To Insights