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Avoid Penalties: Maintain a Legal Hiring Process
Question:
We are continuously chasing paperwork for employees that a manager may have hired but didn’t include HR in the hiring process. What problems does this present that we can share with the hiring managers?
Answer:
It is important to make sure HR is included in the hiring process to assure all items are completed and proper documentation on the process is maintained. If steps are skipped or documents missed, it can come back to haunt the employer in the future. Some of the items that are essential for HR review includes the following.
- I-9 Forms. Legally, the I-9 form must be completed within 3 days of date of hire. Not completing the form timely can result in hefty penalties for employers (https://www.uscis.gov/i-9-central/penalties)
- New Hire Reporting. In Ohio, new hires must be reported to the state within 20 days of hire. Each state has a different process or requirements for this. So, if you are in other states, check those requirements.
- Consistent Hiring Process. Consistency can lead to legal issues as well. For example, you run a risk that Manager A is not following the same procedure as Manager B for the similar role, which could be seen as discriminatory even if it isn’t intentional. This could be with regards to the interview process, background checks, drug screens, references, etc.
- Timely Benefit Enrollment. If new employees do not receive benefit enrollment paperwork in a timely manner, they may miss the window to enroll. For example, a client company offers Long Term Disability to their employees. If the form is not completed and employee enrolled in 30 days, they have to do a full physical and could be turned down for coverage.
- Consistent compensation allocations. Inconsistent compensation can lead to potential discrimination claims or just create internal equity issues. If a manager does not check with HR or Finance before an offer is made, it could completely upset the compensation structure within the company and even cause inequity issues.
- Communicating employer policies. If a new hire starts and is not provided the employee handbook and violates a policy, they could claim they never received the handbook, leading to (potentially) a wrongful termination. Employees must receive policy information and sign off on that receipt.
- Complete onboarding process. In today’s job market finding candidates and keeping them is a challenge. If new employees are not properly onboarded, from legally required paperwork to details about their job and the company, it could create a higher turnover rate.
As you can see, some of these items are legal and some can result in fines for the employers. Let HR “in the loop” on all hires before they happen and to make sure these problems don’t come back to haunt.
Employment recordkeeping does not rank high on the list of favorite human resources functions, but it is vitally important. Take the I-9 Form for example. Failure to complete this form on a new employee could result in a series of fines. Avoid the fines and minimize your stress level by having Strategic HR assist with your recordkeeping compliance. Visit our Recordkeeping page to learn more about our services.
When Does An Employee’s I-9 Form Need Updated?
HR Question:
I have an employee who was recently married and changed her name. Does she need to complete a new I-9 form with her new name?
HR Answer:
When an employee changes their name (legally) employers are not required to complete a new I-9 form. The US Citizenship and Immigration Services recommends that employers note the name change in Section 3 of the form. To make sure your records are in order, here are the points to consider:
- It is not necessary to document the new forms of identification but most employers, for payroll purposes (not for the I-9 form), will require a copy of the new social security card.
- It is important for employers to make sure payments are made to the legal name on an individual’s social security card to ensure their W-2 is correct and there are no mismatches.
- For purposes of the I-9 form, an employer must make a reasonable attempt to ensure the name change is appropriate by requesting a copy of a marriage license or a divorce decree or even a letter from the employee’s religious representative if necessary.
If you have more questions concerning I-9 forms, visit the U.S. Citizenship and Immigration Services (USCIS) Employers Handbook for completing Form I-9.
Employment recordkeeping does not rank high on the list of favorite human resources functions, but it is vitally important. Take the I-9 Form for example. Failure to complete this form on a new employee could result in a series of fines. Avoid the fines and minimize your stress level by having Strategic HR assist with your recordkeeping compliance. Visit our Recordkeeping page to learn more about our services.
Federal Employment Poster Requirements for On-Site and Remote Workers
HR Question:
I keep receiving notices that I need to order new posters to meet federal employment poster requirements. Many of my employees aren’t in the office regularly and those that are don’t look at the posters or any of the compliance documents we are required to distribute. What’s the risk if we don’t post these posters or distribute the annual notifications to employees? Eliminating this task would save me and the company a lot of time and money.
HR Answer:
Even if you feel employees are not reviewing the posters, there’s still a compelling reason to provide them. The Department of Labor (DOL), the Equal Employment Opportunity Commission (EEOC), and the Employee Retirement Income Security Act (ERISA) require these employment postings and notices. And organizations that don’t comply with the requirements can be fined.
To save time, you can purchase a package of posters from a reputable vendor. This can be an easy, but potentially costly, way to fulfill the necessary poster requirements. However, if you would like a more cost-conscious solution, the DOL has a great option. Their Workplace Posters Overview provides a list of the necessary posters, along with links to downloadable posters in multiple languages.
Did you know that poster requirements can vary by company size and industry? If you’re not sure what federal posters your organization is required to provide, the DOL created the FirstStep Poster Advisor as an interactive, step-by-step guide to help you with poster compliance.
How to Meet Remote Employee Poster Requirements
As many employers have shifted their workforce to a remote or hybrid work model, these employers have to shift their typical in-office practices to meet the Department of Labor’s requirements for their remote employees. To remain in compliance, the DOL requires employers to post labor posters electronically in a file that is accessible by everyone. Also, the file should not be password protected.
Employees must be able to find employment posters for their organization regardless of their work location. So if employers have a hybrid work model, a best practice is to have posters physically posted at the worksite while also including the electronic version of the posters on an accessible intranet.
Penalties For Not Following Federal Employment Poster Requirements
If you are still asking yourself if it’s worth the hassle and expense, consider the potential penalties for non-compliance. In January 2022, the penalties for failure to post and/or provide notifications increased. Although some of the fines may not seem significant, they can add up quickly. According to the Federal Register, here is a sampling of the new maximum penalties for violating the following posting requirements:
- $189 — Family and Medical Leave Act (FMLA)
- $14,502 — Job Safety and Health: It’s the Law (OSHA)
- $23,011 — Employee Polygraph Protection Act (EPPA)
For notifications, the Employee Retirement Income Security Act (ERISA) has significant fines for:
- Failure to provide the Summary of Benefits and Coverage (SBC) Plan Description ($1,362 per failure)
- Failure to provide an automatic enrollment notice for your 401(k) plan ($2,046 per day per person)
The Federal Register Poster Fine Reference provides details for all the fines you can incur for failure to comply.
Don’t Forget About State-Mandated Posters
In addition to federal posters, you may also be required to provide state posters. Here are links to posters required by Ohio, Kentucky, Indiana, and all other states. We recommend consulting with your legal counsel to ensure that you provide all of the posters that are appropriate for your organization.
As you can see, there could be several employment posters that your organization is required to post. So, if you think you are going to save time and money by not posting these materials, you may want to reconsider the potential fines and penalties that could result from non-compliance. Is it worth the risk?
Thank you to Patti Dunham, MBA, MA, SPHR, SHRM-SCP, Director of HR Solutions for contributing to this HR Question of the Week.
Recordkeeping is one of the more mundane tasks associated with Human Resources, but it is extremely important and can get you into hot water if not done properly. Learn how Clark Schaefer Strategic HR can help with your HR Compliance and Recordkeeping needs. Feel free to Contact Us with any specific questions you may have.
