Are the Costs of Being Noncompliant Worth the Risks?
To avoid potentially costly fines, employers must regularly review their policies and practices to make sure they comply with the multitude of federal, state and local laws. Employers overlooking compliance (intentionally or unintentionally) could find themselves facing dire consequences. In 2016, numerous employers were affected by governmental initiatives and investigations that uncovered noncompliant practices:
  • The DOL's Wage and Hour Division obtained nearly $266 million in back wages for approximately 283,000 workers throughout the U.S for minimum wage, overtime, and other wage violations.
  • In 2016, The Massachusetts Fair Labor Division received more than 6,000 complaints and recovered $3.8 million in restitution and penalties from Bay State-based employers.
  • The Equal Employment Opportunity Commission (EEOC) awarded $52.2 million for victims of workplace discrimination.
  • More than 91,503 discrimination and 42,018 retaliation charges were filed with the EEOC in 2016.

In the News

FedEx agreed to pay $228 million to settle a class action lawsuit brought against them by drivers claiming they were improperly classified as independent contractors. This is one of the most significant wage and hour settlements in the last 10 years and a very important development in the ongoing battle against widespread misclassification of employees as independent contractors in order to avoid paying benefits, taxes, insurance, and overtime pay on behalf of workers.

Zenefits CEO, Parker Conrad, was forced to resign because of lack of compliance. According to the company's new CEO, David Sacks, "many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong." In addition the SEC fined Zenefits, and it's ousted CEO, a combined $980,000 for misleading the company's investors.
A Chipotle employee in Washington D.C. was awarded over half a million dollars in a discrimination settlement in August 2016. A former employee alleged that a supervisor harassed and ultimately fired her after announcing she was pregnant, which violates the federal Pregnancy Discrimination Act, which is part of Title VII of the Civil Rights Act of 1964.
What Can Employers Do?

Many small- to mid-sized businesses face the daunting task of administering their human resources function. Often, these duties are spread among several people within the organization. Following the legal requirements and maintaining compliance with various rules and regulations can be costly and confusing. However, the cost of not complying can be great - either in the form of fines and penalties, or legal settlements. Contact HR Knowledge  to learn how we can help you assess the current state of your human resources function.

This content is provided with the understanding that HR Knowledge is not rendering legal advice. While every effort is made to provide current information, the law changes regularly and laws may vary depending on the state or municipality. The material is made available for informational purposes only and is not a substitute for legal advice or your professional judgment. You should review applicable law in your jurisdiction and consult experienced counsel for legal advice. If you have any questions regarding this advisory please contact HR Knowledge at 508.339.1300 or email us .
About HR Knowledge, Inc. 
Founded in 2001, HR Knowledge, Inc. provides integrated outsourced HR services tailored to our clients' needs. Our full array of offerings includes managed payroll, employee benefits administration, and HR consulting and support services, such as training, compliance, and Hiring Process Managementâ„¢, our comprehensive recruitment service that takes you from finding to onboarding new talent. Our major markets are fast-growing small- and medium-sized businesses, many of which are venture-capital-backed; foreign companies expanding into the states; and charter schools.  Partnering with HR Knowledge can reduce your administrative costs, minimize your legal risk, help you find and develop talent, and alleviate the HR burden so that you can focus on your core business.

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