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.
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.