Question: HR Compliance: What It Is and Why It’s So Complicated

Answer: Running a business comes with no shortage of perks. You get the freedom to be your own boss, invest in an idea, steer its trajectory, and create wealth. It has its challenges, too. Competition may be fierce. Demand for what you offer may be low. Costs may not be sustainable. But even if everything else is going your way, there’s one challenge that’s ever-present. We’re talking, of course, about HR compliance.

The Definition of HR Compliance

HR compliance is the work of ensuring that your employment practices conform to federal, state, and local laws. This work requires learning which laws apply to your organization and understanding what they require you to do. That’s easier said than done.

HR compliance is truly an art. It requires knowledge, skill, and cooperation. You have to be able to decipher legalese, know where to go to ask the right questions, and create policies and procedures that minimize business risk. You have to ensure that everyone from the executive team to newly minted managers know what they can and cannot do. You have to conduct investigations and enforce your rules consistently. And all this is just the bare minimum—necessary, but not enough to create a truly successful culture.

The work of compliance is never entirely done. Not only do new legal requirements appear on the regular, but, as you’ll read below, compliance obligations are often unclear. While some compliance obligations are definitive, others are unresolved, and a good number require you to make a judgment call. Let’s look at each of these in turn.

Why HR Compliance Can’t Always Be Assured

Some employment laws take the form of “Do this” or “Don’t do that.” The requirements may be simple, like minimum wage, or complex, like FMLA, but either way there’s usually no real question about what you need to do or not do. Compliance with these laws is pretty straightforward. Don’t pay less than the minimum wage. Provide leave to eligible employees for the reasons that qualify, continue their health benefits (if applicable), and return them to their position when their leave ends. As long as you’re clear on the details, you’re not likely to lose sleep wondering if you’re compliant.

Sometimes, however, those details are unsettled. Lawmakers don’t always specify everything a law requires before it passes or takes effect. Even when laws seem clear, trying to put them into practice often raises a lot of questions. And the legislature isn’t the only source of law: regulatory agencies demand their say, and courts get involved, too. To complicate matters, these branches of government don’t always agree with each other, and what they say today may not be what they say tomorrow. Keeping up with the latest official guidance takes time and persistence. It can feel like a marathon, when what you want is a quick sprint to the answer. You have other demands on your time, after all. 

Finally, a lot of employment laws have standards you have to follow, but they don’t tell you how. Neither the IRS nor the DOL, for example, tells you whether your workers are employees or independent contractors—unless there’s an audit or complaint. Instead, these agencies publish tests with general criteria that you use to make case-by-case determinations.

The Americans with Disabilities Act (ADA) works this way, too. The ADA requires employers to provide reasonable accommodations to employees with disabilities, with a few exceptions. One of the exceptions is that the accommodation doesn’t create an undue hardship on the employer’s business. The basic definition of an undue hardship is an action that creates a significant difficulty or expense. Although the law provides factors to consider in making this determination, the onus is on you to decide whether an expense or difficulty from an accommodation is significant. And, ultimately, your conclusion could be challenged in court.

Why HR Compliance Looks Like This

If HR compliance seems overly-complicated, that’s because it is. Our current legal landscape is the result of three competing philosophies about how the workplace should be governed, who should govern it, and whose rights in the workplace should be prioritized in the law.

Owner Control

According to the first view, business owners should have control over their workplaces for one simple reason. They own the business. It’s their property, and as owners they should have the legal right to govern it. Employees have no right to control aspects of the workplace because the workplace isn’t theirs. They don’t own it. It’s not their property. If they don’t like the terms and conditions of their employment, they can and should go elsewhere.

While an owner might employ managers or an executive team to make decisions about who to hire and fire, what to pay, how to assign work, and other such matters, the owner remains in charge. Advocates of this view include the economist Milton Friedman. In 1970, he famously argued that corporate executives should bow to the desires of the owners. The will of the owners reigns supreme. 

Worker Control

According to the second view, workers should have a say in the decisions that get made simply because those decisions affect them and their livelihoods. In this line of thinking, the governance of the workplace should adhere to the principles of democracy. However, proponents for this view differ on how democracy in the workplace should be practiced.

In the 1930s, Senator Robert F. Wagner introduced the National Labor Relations Act. He wanted to guarantee the “freedom of action of the worker” and ensure that workers were “free in the economic as well as the political field.” Today, talk of democratizing the workplace usually refers to bolstering unions. But there are other proposals to note. Some champions of workplace democracy, like Senator Elizabeth Warren, have pushed for employee representation on corporate boards. Others favor cooperative models in which the division between employers and employees doesn’t exist.   

Full-fledged workplace democracy is still a fringe view, though. The very definition of an employee remains a worker who does not have the right to control what the work is, how it’s done, or how it’s compensated. Employees may be given authority to make decisions. They may have influence over their superiors. But they are not legally in charge. 

Societal Control

Advocates of the third view argue that the government has an interest in exercising some measure of control over the work and the workplace. In the employer-employee relationship, employers typically have significantly more power than employees—especially an employee acting as an individual. Frances Perkins, who served as Secretary of Labor and was a key architect of the New Deal, believed that government “should aim to give all the people under its jurisdiction the best possible life.” She saw a role for legislatures in countering long hours, low wages, and other conditions unfavorable to employees. 

How These Philosophies Have Played Out

In the United States, HR compliance is the result of these three competing and arguably incompatible philosophies. Government action with respect to employment has tried to empower workers and afford them certain rights, protections, and freedoms in the workplace, all while preserving the employer’s control over their business.

We can see this balancing act in the differences among state laws. Some states prioritize the right of owners to control their workforces and are loath to restrict that right through legislation. Other states act out of what they see as a duty to secure the rights of workers. Imposing obligations on employers doesn’t bother them.

We also see this balancing act in the way that employment laws tend to set parameters rather than dictate exactly what employers must do. You can pay employees whatever you want, so long as you pay at least the minimum, offer an overtime premium when applicable, and meet equal pay requirements. You can theoretically terminate employment for any reason or no reason at all (though we don’t recommend it); but you can’t fire someone for an illegal reason. Even laws that require a new practice, such as paid leave, allow flexibility provided you meet minimum conditions.

Takeaways

First, when you’re assessing your compliance obligations, understand that not all compliance obligations are clearly delineated or settled law. Unsettling as that may be, it’s how our system has been set up. In those cases, you’ll have to weigh your options and the risks involved, and then make a decision. Sometimes you may need legal advice in addition to HR guidance. Remember, however, that despite all the many employment laws on the books and in the imaginations of legislators, the system is designed to keep employers in charge. You can’t eliminate all risk, but by understanding the nuances and open questions, you can significantly minimize it.

Second, document your actions and decisions. It only takes an employee filing a complaint for enforcement agencies to get involved, but you are better protected if you can quickly and clearly explain to them the reason for your actions.

Third, evaluate whether your policies, procedures, and practices are satisfactory to employees. No employment law gets written in a vacuum, and no law is truly inevitable. Lawmakers passed the Fair Labor Standards Act because workers and the general public felt that labor standards were unfair. Today we wouldn’t have people pushing for predictive scheduling laws if they felt that work schedules were already sufficiently predictable. Harassment prevention training wouldn’t be mandatory (where it is) if sexual harassment weren’t widespread.

Fourth, lead by example. Make good employee relations a key part of your brand and competitive advantage. Employees have higher expectations today than they used to. Meet those expectations and motivate other employers to do the same, and you may find that the compliance landscape of the future is less winding and boggy than it could have been.

Finally, spend some time each day learning about your compliance obligations. Use resources that break down federal and state employment laws in a way that laypeople can understand. Keep up to speed on the latest compliance obligations and contingencies you should consider. HR compliance is an art. The first step to mastering it is learning what it entails and how it works.

You can also download the Telecommuting Checklist as a tool for when an employee is transitioning to a remote schedule. Q&A provided by Mineral, powering the UST HR Workplace. Have HR questions? Sign your nonprofit up for a FREE 60-day trial here. As a UST member, simply log into your Mineral portal to access live HR certified consultants, 300+ on-demand training courses, an extensive compliance library, and more.

Question: How do I make a telecommuting policy?

Answer: Although some employers will be comfortable sending everyone home with their laptop and saying, go forth and be productive, most will want to be a little more specific. A good telecommuting policy will generally address productivity standards, hours of work, how and when employees should be in contact with their manager or subordinates, and office expenses.

For instance, your policy might require that employees are available by phone and or a messaging app during their regular in-office hours, that they meet all deadlines and maintain client contacts per usual, and that they check in with their manager at the close of each workday to report what they have accomplished. Be sure to let employees know whom to contact if they run into technical difficulties at home.

You’ll also want to specify how expenses related to working from home will be dealt with. If you don’t expect there to be any additional expenses involved, communicate this. You don’t want employees thinking this is their chance to purchase a standing desk and fancy ergonomic chair on your dime. That said, you should consider whether employees will incur reasonable and necessary expenses while working from home. Some states mandate reimbursement for these kinds of expenses, but it’s a good practice to cover such costs even if it’s not required by law.

You can also download the Telecommuting Checklist as a tool for when an employee is transitioning to a remote schedule. Q&A provided by Mineral, powering the UST HR Workplace. Have HR questions? Sign your nonprofit up for a FREE 60-day trial here. As a UST member, simply log into your Mineral portal to access live HR certified consultants, 300+ on-demand training courses, an extensive compliance library, and more.

After an extremely challenging year (or two) of workforce disruptions, nonprofit employers are finding their footing again. And, with the holidays upon us and more organizations supporting flexible routines—working remote, adopting a hybrid model, or still meeting in-person—many are looking for creative ways to celebrate the holidays with their devoted staff. It’s these events and get-togethers that bind employees together and makes them feel valued while also improving overall morale.

Opportunities to recognize employee achievements and strengthen team connections should never be overlooked but especially not during this time of year. Whether you realize it or not, your employees miss their colleagues and the fun activities they use to do together such as holiday celebrations—even if they prefer working from home. A sense of community among your remote or hybrid team is crucial for building a positive employee experience and maintaining your nonprofit brand.

All of the activities below are designed to accommodate teams regardless of their work location or time zone. You can even run some of these activities over the course of a few days (or weeks) ensuring all participants have time to respond. And, with a little research you can find a plethora of helpful templates, checklists, and directions online to assist with coordinating a fun-filled event.

• Holiday Scavenger Hunt – You can do a simple photo scavenger hunt where players receive prompts and must then capture those images and submit. The first person to submit all the images wins! Or you can utilize an app such as GooseChase to create an unforgettable scavenger hunt experience that everyone will love.
• Holiday Trivia – Categories might include movies, historical events, music, or traditions.
• Gingerbread House Decorating Contest – Provide employees with a Gingerbread House Kit and have everyone join over video to decorate together. You can even create themes such as “horror movie holidays” or 90’s Christmas” to amp up the fun.
• Treat Tasting – Create or order kits that include seasonal chocolates, cookies, or flavored candy canes that everyone can taste together one by one.
• Never Have I Ever – Those who are guilty stay on camera while those who are innocent temporarily switch off their webcams. You can have employees take turns at sharing never have I ever prompts that might include “never have I ever regifted a present” or “never have I ever gotten drunk at a holiday party.”
• Online Secret Santa – Platforms like Elfster and DrawNames make it super easy to host a virtual Secret Santa Exchange that involves everyone on the team, regardless of their location.
• Ugly Sweater Contest – This is a classic holiday tradition that is super simple to coordinate with a virtual luncheon. Ask employees to wear their ugliest or most creative holiday sweater at your next video meeting and then let everyone vote and offer awards like gift cards or gift baskets.
• Virtual Cooking Class – Find someone who’s willing to give a cooking or baking lesson to the whole team. Perhaps there are people on the team who enjoy baking holiday cookies that would be willing to share their favorite recipe. There are also professional organizations that offer lessons of a wide variety of dishes like Virtual Team Cooking Class or Thriver.  
• Fun Year-End Awards – Issue a survey accepting nominations for Most Enthusiastic, Best Pajama Wearer, Most Likely to Have a Dog Barking in the Background, Never Not Drinking Coffee, or Most Likely to Be on Mute and provide fun rewards to the winners.
• Drive-Thru Holiday Lights – If all of your team is working within a 30-mile radius you can all meet up to caravan through a local holiday themed light display—and don’t forget the hot cocoa!

Get creative and take the time to celebrate your team this year by spreading a little extra holiday cheer! By planning something fun and engaging for your team, you can renew loyalty, get employees excited about the new year ahead, and nurture company culture.

One of the main reasons employees leave their jobs is because they don’t feel appreciated—causing many to question their work and often looking for a job elsewhere. Not surprisingly, but now more than ever before employees expect their workplace to deliver a productive, engaging, and enjoyable experience so to keep high performing employees on the payroll, leaders must consider recognition efforts a top priority. Celebrating achievements at work is also an important part of the productivity cycle and can transform the organization by keeping everyone aligned to the mission and values that contribute to its long-term success.

Impactful recognition has little to do with money and doesn’t need to be extravagant to be effective—it should however be genuine and come from a place of appreciation. It’s important that leaders celebrate wins big and small as both are equally valuable and impactful. Often missed opportunities to celebrate an employee include successful completion of large or new projects, teamwork, work anniversaries, and ongoing behavior that positively impacts fellow co-workers. When a manager takes the time to regularly demonstrate gratitude and appreciation for an employee’s accomplishments—both professional and personal—it can motive, engage, and reinforce positive behaviors and outcomes.

Remind your employees that you value their contributions and celebrate their successes. Check out UST’s “5 Ways to Celebrate Your Team” for some creative ways you can start recognizing your team. 

It’s up to leaders to find opportunities to celebrate their employees while also encouraging employees to celebrate each other. By creating a culture of recognition, you can improve morale and ensure your most valuable assets remain motivated to stay.

Question: What are some typical examples of employee discipline? Are there any you recommend?

Answer: Discipline should reflect the severity of the behavior, attempt to correct it, and be applied consistently. You’ll want to consider how you addressed certain behaviors in the past and the precedent you want to set for the future. For instance, if you jump straight to a final warning when a certain employee is an hour late to work, but let another employee come in late regularly without so much as a written warning, you’re setting yourself up for trouble.

We generally recommend progressive discipline. This means you start small and work your way up to termination. Progressive discipline often includes these steps:

• Oral counseling/warning(s)
• Written warning(s)
• Final written warning
• Unpaid suspension
• Termination

At each step, make your expectations clear, notify the employee of the consequences if they fail to improve (that they’ll be one step closer to termination), and document what actions you took. The warnings you give to the employee should stick to the facts, i.e., what infraction was observed, when it occurred, and what policy or policies were violated. Opinions about the infraction should be left out, as these are easily disputed. For example, “Yesterday, you arrived 20 minutes late in violation of our attendance policy” simply states the facts, whereas “You’re always tardy and can’t be trusted to arrive on time” is likely to get pushback.

Q&A provided by Mineral, powering the UST HR Workplace for nonprofit HR teams. Have HR questions? Sign your nonprofit up for a free 60-day trial here. As a UST member, simply log into your Mineral portal to access live HR certified consultants, 300+ on-demand training courses, an extensive compliance library, and more.