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In the ever-evolving landscape of human resources, staying compliant with the latest regulations can feel like a journey through the enchanted forests of Oz. In our recent webinar, “Pay, Leave, and AI, Oh My! We’re Off to See the Compliance Wizard,” sponsored by SHRM, Janell Stanton, employment attorney and partner at Jackon Lewis PC, shared invaluable insights into the current state of HR compliance and provided recommendations on how to find—and stay on – the yellow brick road of compliance, avoiding nasty fines and penalties.
Multi-State Compliance: Not Just in Kansas Anymore
With the rise of remote work, companies now have employees scattered across various states, each with their own set of compliance requirements. While discussing this topic, Janell emphasized the importance of understanding the legal landscape in every state where your employees reside. This includes being aware of diverse regulations, such as unique requirements in states like Alabama (paid jury duty leave) and Nebraska (payout of unused vacation time). Non-compliance in this area can lead to significant penalties, including wage and hour claims and misclassification lawsuits. To stay informed, it’s crucial to utilize resources like SHRM, legal blogs, and compliance software.
Pay Transparency: The New Frontier
Equal pay has long been a cornerstone of fair employment practices, but recent pay transparency laws are taking it a step further. These laws, enacted in states like Colorado, New York, and California, require employers to disclose pay ranges in job postings, aiming to eliminate wage disparities. It’s essential for companies to conduct internal pay equity audits to ensure compliance and prevent potential discrimination claims. Another area Janell called attention to is the increased awareness employees may have regarding pay as transparency becomes more common, reinforcing the need for employers to maintain consistent and fair pay practices.
Paid Family and Medical Leave: A Growing Trend in HR Compliance
Paid family and medical leave (PFML) laws are becoming more common, offering employees financial support during significant life events. However, these laws vary widely from state to state in terms of contribution requirements, eligibility rules, and benefit structures. As an employer, you must navigate the interplay between state PFML laws and federal FMLA requirements. To ensure compliance, it is crucial to regularly review and update leave policies to align with both state and federal regulations.
Independent Contractors: A Complex Classification
Classifying workers as independent contractors can offer flexibility but comes with its own set of challenges. Misclassification can lead to significant legal and financial repercussions. And to complicate matters, as Janell pointed out, various agencies, including the IRS and Department of Labor, have different criteria for classifying independent contractors. Industries such as healthcare, construction, and professional services that may rely more heavily on gig workers are particularly susceptible to misclassification issues. As such, it is vital to conduct thorough audits and ensure that classification practices meet all relevant legal standards.
AI in Employment Practices: HR Compliance’s New Frontier
Artificial Intelligence (AI) is revolutionizing HR practices, from recruitment to performance management. However, its use comes with potential risks, particularly around bias and discrimination. According to Janell, states like New York and Illinois are leading the way in regulating AI use in employment decisions, and the anticipation is more will follow. While AI offers the opportunity to gain efficiency and increase, it’s important to be aware of potential pitfalls. For example, AI algorithms can inadvertently perpetuate biases, leading to discrimination claims, and the increasing discussion around copyright and intellectual property ownership. To mitigate your risk but still leverage the benefits of AI, it’s important to ensure transparency, accountability, and human oversight when using AI tools in HR processes.
Final Thoughts: There’s No Place like Compliance
Navigating the yellow brick road of HR compliance requires vigilance, adaptability, and a proactive approach. By staying informed and implementing best practices, you can ensure that your organization remains compliant and fosters a fair and equitable workplace. Stay ahead of the compliance curve by subscribing to SHRM’s newsletters and attending future webinars. For comprehensive HR solutions, contact us to learn how our platform can help you manage payroll, benefits, and compliance seamlessly.
Navigating HR Compliance
Comprehensive breakdown of HR compliance issues, including multi-state regulations, pay transparency, paid leave, contractor classification, and AI in employment practices.
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