Small-business owners, HR professionals, and other managers continually wade through the employment law alphabet soup of acronyms to figure out which laws apply to them and then have to keep up with all changes. This year alone there have been changes to FMLA, FLSA, ACA, and OSHA, including increases to penalties for violations. Complicating matters more businesses are accountable to city- and county-specific regulations as well. These laws and regulations are always subject to change — and all too often, the onus is on the small business to stay on top of these changes. Failure to comply with all of the changes is also on the small businesses, which in some cases are so pricey that it could put a company out of business. To top that off, recently laws have been passed that increase these penalties for violations.
Recent Penalty Increases Create Larger Impact for Violations
Last November, Congress passed the Federal Civil Penalties Inflation Adjustment Act Improvements Act, requiring federal agencies to increase their civil penalties to account for inflation. Many agencies had not done so in more than a decade. This initial increase in rates is capped at 150 percent. Going forward, the rates will be adjusted annually based on inflation.
The Department of Labor, is among those implementing increases. Penalties assessed by the Employee Benefits Security Administration, Mine Safety and Health Administration, Occupational Safety Administration, the Office of Workers’ Compensation Programs, and the Wage and Hour Division will all be increasing. The new rates will begin to be assessed beginning August 1, 2016, and are applicable to violations that took place after November 2, 2015.
Notable increases include:
- Wage and Hour Division penalties for violations of certain child labor laws will increase from $11,000 to $12,080.
- Worker's Compensation. Maximum penalties for violations of federal workers' compensation laws more than doubled.
- H-2B Guest Worker Program. The maximum penalty for violations of the H-2B guest worker program increased from $10,000 to $11,940 per violation.
- ERISA Form 5500. The maximum penalty for failure to file a Form 5500 increased from $1,100 per day to $2,063 per day.
- Notice of 401(k) Automatic Contributions. Failure to provide notice to participants of a 401(k) plan with an automatic contribution arrangement increased from a maximum penalty of $1,000 per day to a maximum of $1,632 per day.
- OSHA penalties for serious violations, other-than-serious violations, posting violations, and failures to abate will increase from $7,000 to $12,471.
- OSHA’s maximum penalties for willful or repeated violations will increase from $70,000 to $124,709.
- Wage and Hour Division penalties for violations of minimum wage and overtime laws will increase from $1,100 to $1,864.
Cloud-based HCM Solutions offer SMB’s Streamlined Compliance Management
As small businesses grow, the volume of employee information and interaction rises — coupled with more demanding compliance requirements. Although numerous businesses have automated payroll processing, many still rely on spreadsheets or point applications for time and attendance, scheduling, and benefits administration.
At some point, using disparate applications and spreadsheets that “don’t talk to each other” becomes untenable with so many complex employment laws. Many businesses are realizing they need to take a more automated and integrated approach to administering and managing workforce legislation changes to stay compliant and avoid lawsuits and penalties.
Centralizing workforce data and processes in a truly unified, cloud- based HCM solution provides the visibility and controls required to increase efficiency, avoid and reduce errors, and save time by streamlining compliance with labor laws and regulations. A strong reporting engine can help make providing proof of compliance a breeze.
Upgrade your platform with more robust modules for ACA, Leave Management and Advanced Scheduling and employers have an HR infrastructure that streamline compliance and reduces errors providing peace of mind that the entire organization is correctly adhering to the policies and regulation.
Furthermore a one centralized system should provide a strong reporting engine. Using OnePoint employers can create custom reports and dashboards that mirror the data required to populate specific industry or internal compliance reporting, like Payroll Based Journal Reporting in the healthcare industry. Having access to information in real-time, gives employers the visibility needed to prepare reports and avoid compliance risks on a day-to-day basis, while having a historical records making proof of compliance a breeze.