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Opinion: Recent federal decisions impact employers

Industry Insight

Posted online

A new federal guideline, federal law, pilot program and Supreme Court decision will result in increased compliance, reduced litigation, changes to fringe benefits and decreased workplace sexual harassment. Here’s what you need to know from a human resources standpoint.

Harassment guidelines
A wave of sexual harassment claims is sweeping across the country. Recently, the Equal Employment Opportunity Commission issued guidelines regarding best practices to prevent and handle workplace harassment.

Four primary pillars are addressed in developing or revising anti-harassment strategies. First, ensure senior leaders support efforts and assign resources to maintain an effective prevention plan and address workplace harassment. Second, regularly evaluate and modify policies to confirm practicality and legal compliance. Inform employees of the procedures on a frequent basis. Third, devise and implement a complaint reporting and investigation system specific to the company. Fourth, conduct regular training to prevent harassment and decrease liability by showing a good faith effort to avert harassment.

Fringe benefits
The Tax Cuts and Jobs Act of 2017 brought about the most comprehensive overhaul of the Internal Revenue Code since 1986.

Four notable changes affect business fringe benefits. First, any amount the organization pays or reimburses a laborer for qualified moving expenses must be reported as compensation. Second, the corporation may not deduct the costs of formerly qualified transportation fringe benefits. Third, an enterprise may no longer deduct 50 percent of expenses for business-related meals and entertainment. Fourth, since a staff member may no longer deduct unreimbursed work-related expenses on personal tax returns, companies that have decreased their own costs by not reimbursing certain employee expenses may explore doing so now.

Fair Labor and payroll
A new six-month pilot program was introduced to improve compliance and resolve violations under the Fair Labor Standards Act without litigation. Under the Payroll Audit Independent Determination plan, an employer analyzes the Labor Department’s Wage and Hour Division compliance materials and performs an audit of compensation practices, then determines possible violations, associates impacted and timeframes in which each team member was affected.

The business then computes the amount of back wages owed to each worker, notifies the Wage and Hour Division and submits the calculations and mandatory documents. The federal office assesses the information, corroborates the back wages, and issues a summary of unpaid wages and forms denoting the settlement terms for each laborer. The organization then provides prompt payment.

A corporation who self-reports will not be required to pay liquidated damages or civil monetary penalties, and will evade the litigation costs for each staff member who accepts the payment and signs a release.

Four risks for enterprises remain, however. First, if an employee does not take the payment and sign the release, the company is vulnerable to litigation. Second, even if the associate signs the release, it will not apply to any state law claims. Third, the Wage and Hour Division may still perform future investigations of the employer. Fourth, no protection exists for the information and documents provided to the government, so the data would be accessible to a team member who did not sign the form and his attorney, who might be planning to pursue litigation.

Whistleblower restrictions
The U.S. Supreme Court restricted the definition of whistleblower under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. A whistleblower must now report concerns of securities law violations to the Securities and Exchange Commission for protection under the anti-retaliation conditions of the act. The recent ruling only relates to the Dodd-Frank Act, so a worker who only communicates concerns internally will still have whistleblower protection under the Sarbanes-Oxley Act.

Lynne Haggerman, M.S., is president/owner of Lynne Haggerman & Associates LLC, a Springfield firm specializing in management training, retained search, outplacement and human resource consulting. She can be reached at lynne@lynnehaggerman.com.

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