HR Compliance is a very broad topic so I will be breaking it down. I’ll touch on the areas that pose the largest risk and areas that employers either don’t know or don’t think about. Let’s start with what is meant by compliance. The definition in our case is compliance with the labor laws, whether it pertains to Federal, State, or your own city and OSHA. In HR we find it is important to not only take care of compliance but also have best practices as a way to mitigate the risk of exposure to lawsuits and violations of labor laws.

PAGA
Since the government cannot possibly hire enough auditors to check every employer’s compliance, they rely on employees to help. The Private Attorney General Act (PAGA) is intended to surface violations of the Dept. of Labor wage and hour regulations. What this does is empowers employees and former employees to bring a lawsuit against a company for violations of the Wage and Hour laws. The employee stands to be awarded 25% of the fines the government wins in those kinds of lawsuits.

Common Violations
One of the most common violations that employers are sued for has to do with very basic employment infrastructure. One such example is having the correct employer information on the pay statement. Another is when hourly employees are not given required rest breaks, and/ or employees take their meal breaks after the 5th hour of the start of their shift. Another common violation is not paying employees overtime premium pay, as required.

If you have at least 10 hourly employees, it is highly recommended that you have a payroll meal break audit done annually. This way if there is a problem regarding breaks, you can discover it instead of having a lawsuit or auditor find it.

After doing some research on the topic, you will find that most of these lawsuits are awarded in the hundreds of thousands of dollars. How do you avoid something like that happening? There are remedies, the main one being very vigilant with enforcing your break time policy and the other is to pay the employee who missed their meal or rest break the one hour as required by law.

It is important that as an employer you need to pay attention to the details. Using a reliable payroll provider helps mitigate the possibility of mistakes. Although as I learned very early on, you cannot depend on the payroll provider to notify you of what needs to be on the pay statement. I was told by two different payroll companies that they are not authorized to tell their customers about what should and shouldn’t be on a payroll statement, since that is considered to be legal advice. They are not permitted to give legal advice.

OSHA and Cal OSHA
Another example of labor laws that can cause considerable exposure to expensive repercussions is OSHA. OSHA and Cal OSHA laws are all about workplace safety. OSHA is at the federal level and CAL OSHA is specific to California. The purpose of OSHA regulations is to ensure that every employer provides a healthy, safe, and secure work environment. Secure meaning prevention of workplace violence. They also require a written safety plan called an Illness and Injury Prevention Program also called an IIPP, that is specific to the employer and their workplace.

Employers must also provide safety training on a periodic basis, depending on the level of safety risk in the workplace. This is required for any size employer.
The risk here is to an employee’s health and in some cases, their life. But to help mitigate that risk, it is important to have Worker’s Compensation Insurance. In addition, you need to follow all OSHA regulations. Worker’s Comp insurance does not help employers who violate the law.

Equal Employment Opportunity Commission
The next set of employment regulations every employer must have HR compliance with is to remind you of is the Equal Employment Opportunity Commission, which is Federal. Specifically, Title VII since that has to do with the requirements in the workplace. Title VII requires the prevention of sexual harassment in the workplace as well as preventing discrimination and retaliation of employees who belong to a protected class.
An important point to know about the Title VII requirements is there is a 3-year statute of limitations. That means a former employee can sue their former employer up to 3 years after separating from the company for violating any part of the Title VII requirements. That is usually sexual harassment, discrimination, hostile work environment, retaliation, or constructive termination. Constructive termination means that an employee is forced to quit because of their work environment. These lawsuits tend to be for large sums of money.

Leaves of Absence
The last category of HR compliance we’re discussing today has to do with leaves of absence. All leaves are unpaid by the employer, except paid sick leave and the California voting rights leave. This category can be tricky since in California there are 16 different leaves. We will discuss two leaves that must be tracked since the leaves overlap with one another.

Specifically, when an employer has 50 or more employees, they are required to grant FMLA leave – which means the Family Medical Leave Act. FMLA can run concurrently with CFRA leave, which is specific to California and stands for California Family Rights Act leave. CFRA applies to employers with 5 or more employees and guarantees job protection while an employee is on leave. FMLA does not provide for a guarantee of the job.

CFRA provides 12 weeks of leave per year for employees that have been with the employer for at least 12 months in order for them to care for a relative or a designated person. A designated person may be unrelated to the employee. CFRA in another example can be used for pregnancy disability and baby bonding. This leave is unpaid by the employer.

One tricky and common overlap of leaves is pregnancy disability leave. In California, there may be as many as four different leaves that need to be granted. Those leaves are pregnancy disability leave, unpaid by the employer but do include partial wage replacement through State Disability Insurance for up to 12 weeks, CFRA and possibly FMLA of up to another 12 weeks, paid family leave of up to 6 weeks, which also provides for a limited partial wage replacement through California State’s EDD and personal leave. Personal leave is unpaid leave that is not required by any statute, but many employers will allow it under certain conditions.

I know it’s a lot to remember! If you’d like more information or help with finding out if your business is compliant, go to smallbizhrservices.com to schedule a free 60-minute consultation with me. We are also providing a reference guide to HR compliance if you click to download it.