Accountants play key role in HR law compliance

More than 75 federal laws and 30 statutes in Missouri apply to managing people. Accounting must be involved in complying with several of these human resource laws. Two laws, however – the Civil Rights Act and the Americans with Disabilities Act – are especially critical. Appropriate forms must be developed, used consistently and updated as needed. Accounting staff members need to receive training so protocol is followed and proper information documented.

Civil rights in employment

The Civil Rights Act of 1964, Title VII, forbids discrimination, harassment or retaliation due to race, color, religion, sex or national origin. Typical accommodations for religion include time off or a requirement to take unpaid leave.

Compensation procedures abound in Title VII. People must receive similar pay for jobs similar in skill, responsibility and working conditions. Exceptions include legitimate, job-related standards or business practices. Examples include job market conditions, experience of associates, prior salaries of new hires, workers reaching maximum pay grades, merit systems based upon performance, seniority systems, and incentive systems based upon quality or quantity of work.

The Americans with Disabilities Act of 1990, Title I, prohibits discrimination against qualified individuals with a physical or mental impairment that substantially limits one or more major life activities. Team members must be able to perform the essential functions of the job with or without reasonable accommodation. Two examples of reasonable accommodations are reassigning staff to a vacant job or lower-level position. If the second option is selected, try to find a position closest in pay, status and other factors.

If an accommodation imposes an undue hardship on the company, alternatives consist of finding different ways to accommodate employees or letting employees pay a portion of the undue hardship costs. Undue hardship is determined by the size of the enterprise, financial resources available for accommodation, difficulty or expense of making an accommodation, and the nature and structure of the operations of the corporation. Accountants are in the perfect position to make such analyses.

Keeping tabs on compliance

To ensure compliance with both laws, accountants should document the nondiscriminatory reasons for the starting salaries of all new hires. Be sure that performance appraisals are based upon job descriptions, and the content of the reviews are quantified by justifiable numerical ratings. Documentation should clearly reflect why each person received an increase, decrease or no adjustment to pay.

In the event of a layoff, the rationale for determining who is laid off must be based upon legitimate seniority, performance or organizational issues. Performance appraisals must support layoffs for performance. Older workers cannot be laid off based upon higher salaries.

Conduct yearly audits to ensure compliance in all aspects of both laws, thereby minimizing liability and increasing the chances of winning lawsuits. If a lawsuit is brought by an employee and the business loses, funds must be allocated for back pay, front pay and payment of attorneys, expert witnesses and court costs.

Key roles of the accounting department are to minimize expenditures and unnecessary costs, as well as justify increased costs. These functions make accounting a perfect partner with human resources in overseeing the financial aspects of managing people.

Lynne Haggerman, M.S., is president/owner of Haggerman & Associates, a firm specializing in management training, retained search, outplacement and human resource consulting. She can be reached at lynne@haggermanandassociates.com.[[In-content Ad]]