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HR Compliance Trends In 2012

Not so long ago, we patiently waited for the evening paper to learn the news of the day. It was probably day-old news by the time it reached us, but such was the pace to which we were accustomed.
Now, constant connectivity and social networks let all of us receive and report news in real time.

Following are the topics human resources experts are talking about and business owners need to know about in 2012:

• Dealing with an HR crisis. While the recent scandal at Penn State had most people talking about the unspeakable (albeit alleged) actions of former football coach Jerry Sandusky, it sparked a conversation among HR professionals about the steps taken by the university to contain the crisis.

When an employee’s actions threaten an organization and its brand image, human resources must act quickly to address the issue. Immediate suspension of employees involved may be appropriate to allow time to investigate rumors or accusations. Management may be reluctant to move too hastily, but inaction or a delayed response can be perceived as ambivalence and do more damage to the company’s reputation.
Companies should have a policy in place that dictates steps to be taken when there is suspected or alleged misconduct. This will afford management the excuse that they are merely following company policy.

• Social media continues to confound employers. While many business owners are taking the plunge into social media for purposes of marketing and public relations, they’re still testing the waters when it comes to allowing employees access at work and monitoring their online activity.

Why are business owners so nervous? Case after publicized case of companies being embarrassed by or legally liable for the online actions of their employees is a constant reminder that social media offers employees a powerful forum to disparage or undermine their company, intentionally or unintentionally.

Social media experts suggest that the best defense is a good offense. Companies should institute social media policies that define their expectations for employees’ professional online practices and establish a “Code of Conduct” for employees’ personal social networking, too. Responsible employees will follow reasonable guidelines.

• Record number of immigration investigations plague business owners. The federal government is cracking down on the hiring of illegal immigrants, but rather than focus solely on illegal workers, U.S. Immigration and Customs Enforcement officials are targeting their employers as well. In addition to deporting more immigrants during the 2011 fiscal year than it did in any year since the agency’s 2003 inception, ICE, under the Department of Homeland Security, continues to increase its worksite immigration enforcement efforts by conducting on-site visits and auditing employers’ I-9 Forms.

Failure to properly complete or retain I-9 records can result in substantial fines. Of the nearly 700 employers audited in 2011, investigators issued notices for fines totaling more than $2.3 million. Beyond exponentially increased fines, more intensive investigations of employers have also led to indictments, convictions and jail sentences.
Employers should take appropriate steps to ensure they are compliant with applicable rules, including annual I-9 audits, uniform employment verification procedures, thorough training of hiring personnel on immigration rules and a reminder system to notify employees of upcoming work authorization expiration dates.

• Engagement continues to excite employers. Management looks to HR not just to recruit and hire workers, but to engage them as well.
Employees want to work for companies that not only provide tools to help them succeed professionally, but also stay healthy, balance their busy lives and be involved in their communities.

HR professionals continue to focus on initiatives that can contribute significantly to employee engagement, because engaged employees deliver a positive return on investment for their companies.

• Wage and hour laws lead companies’ noncompliance hit list. Maybe it’s the tiresome and time-intensive reporting associated with wage and hour laws or maybe it’s because the Fair Labor Standards Act was enacted during the Great Depression and no longer reflects the way people work today, but whatever the reason, wage and hour violations are one of the most common noncompliance issues for companies.

Lawsuits over improper classification of employees as either “exempt” or “nonexempt” and failure to pay overtime now account for 84 percent of all employment class actions filed, and legal experts don’t see the trend ending anytime soon.

Novartis AG, a Swiss drugmaker, recently agreed to pay $99 million to settle a lawsuit brought by sales representatives who claimed they were denied overtime pay. Similar cases are pending against Johnson & Johnson, Bristol-Myers Squibb Co. and a unit of Merck & Co.

To prevent potential litigation, companies should conduct regular audits to verify that job positions are properly classified, and educate managers and employees so they understand the differences between and the rational for salaried and hourly classifications.
What’s trending in HR? Crisis management, immigration crackdowns and wage and hour claim settlements; these and other employment issues are capturing headlines and the attention of HR professionals.

Smart business owners will stay tuned as well, as many of these issues have the potential to impact their companies and their employees in 2012.

JOHN ALLEN is president and COO of Houston-based G&A Partners,


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