Category: Hiring

HR Compliance

Tackling HR Compliance for Your Small Business

As an employment lawyer, I spend much of my time communicating with excellent human resources professionals. HR compliance is an underappreciated function in many organizations, though not necessarily by choice. Here are some general observations on how companies can struggle with their human resources practices and when hiring a dedicated HR professional for your growing small business may be a good idea.

Limitations on Good HR Compliance

Human resources compliance refers to the process of ensuring that a company adheres to all relevant laws, regulations, and standards when it comes to managing its employees. Some of the key factors that can impair HR compliance within a company include:

  1. Lack of awareness or understanding of the relevant laws and regulations: Companies may not be aware of all the laws and regulations that apply to their HR practices or may not understand how to comply with these requirements.
  2. Limited resources: Companies may not have the resources or staff required to fully implement HR compliance programs, including the development and implementation of policies and procedures, training and education, and ongoing monitoring and reporting.
  3. Inadequate systems and processes: Companies may not have well-developed systems and processes in place to support HR compliance, including procedures for tracking and reporting incidents, responding to complaints, and conducting investigations.
  4. Resistance to change: Companies may resist change, especially if they have been operating in a particular way for a long time. This resistance may create delays in adopting new HR compliance practices or changing established processes.

How Can You Improve Your HR Compliance?

To overcome these challenges, companies can take several steps to improve their HR compliance, including:

  1. Conducting a comprehensive review of their HR practices and policies to identify potential risks or areas for improvement.
  2. Establishing clear policies and procedures to ensure that all HR practices comply with the relevant laws and regulations.
  3. Providing training and education to employees on the relevant laws and regulations and the company’s policies and procedures.
  4. Implementing systems and processes to track and report incidents and respond to complaints and investigations.
  5. Involving employees in improving HR compliance by seeking their feedback and suggestions and involving them, as appropriate, in the development and implementation of new policies and procedures.

Hiring Your First HR Professional

As your company grows, you must ensure that you have the right resources and support to manage your workforce effectively. One of the critical decisions you’ll need to make as you grow is when and how to hire your first HR professional.

How Many Employees?

There’s no one-size-fits-all answer to when it’s time to hire your first HR professional, as it will depend on the size and needs of your company. There is no specific number of employees a company must have before hiring a dedicated HR staff member. However, as a company grows and the number of employees increases, the need for HR support also increases, because HR plays a critical role in managing and supporting a company’s most valuable asset, its people.

For smaller companies with fewer than 50 employees, it may be reasonable to assign HR responsibilities to a manager or administrative staff member with other duties. However, as the company grows and the number of employees increases, the need for specialized HR support also increases, and it may be more cost-effective to hire a dedicated HR professional.

Ultimately, the decision to hire an HR professional should be based on the company’s specific needs and resources, as well as its plans for future growth.

Additional Factors

Here are a few key indicators that it may be time to bring in an HR professional:

  1. Your company is growing rapidly: As your company grows, so does the complexity of managing your workforce. You may struggle to keep up with increasing HR-related tasks and responsibilities.
  2. You’re spending too much time on HR tasks: If you’re spending an increasing amount of time on HR-related tasks, such as recruiting and onboarding new employees, it may be time to bring in an HR professional to help lighten the load.
  3. Your company is facing HR challenges: If your company is facing personnel difficulties, such as high turnover, disputes with employees, or legal compliance issues, you may need to bring in an HR professional who can help you resolve these challenges and prevent them from recurring in the future.

How to Hire Your First HR Professional

Once you’ve decided that it’s time to hire your first HR professional, consider taking the following steps to ensure that you find the right candidate:

  1. Define the role: Clearly define the role and responsibilities of the HR professional you’re looking to hire. This step will help you ensure that you understand clearly what you need from the person you bring on board and then attract suitable candidates for that position.
  2. Create a job description: Write a comprehensive job description that includes the key responsibilities, qualifications, and experience that you’re looking for in a candidate. This will help you attract the right candidates and enable them to understand what the position demands.
  3. Utilize your network: Leverage your professional network to find potential candidates. Ask for referrals from colleagues, business partners, and friends, and consider reaching out to HR professionals with whom you’ve worked in the past.
  4. Offer competitive compensation: Be sure to offer a competitive compensation package that includes a salary, benefits, and any other perks that are important to you and candidates at the level you’re seeking.

Don’t Stop Improving

Whether you’ve hired the first or tenth member of your human resources department, there’s always room to improve your company’s HR compliance. You can review and repeat many of the steps above to continue to make strides in this area. Of course, the applicable laws and regulations of the workplace will also continue to develop. So make sure your human resources team subscribes to our newsletter to receive important updates in this area.

New York Pay Transparency

Statewide New York Pay Transparency Law Enacted (with Planned Amendments)

On December 21, 2022, Governor Kathy Hochul signed legislation establishing a statewide New York pay transparency law. When the law takes effect on September 17, 2023, it will require covered employers to list salary or wage ranges for all advertised jobs and promotions. Employers must also publish the job description if one exists.

These new pay transparency disclosures aim to empower workers with more information to reduce discriminatory wage and hiring practices. In particular, Gov. Hochul stated that this legal measure will provide a “critical tool in our efforts to end pervasive pay gaps for women and people of color.” It remains to be seen how much clarity the law will actually produce for workers at the expense of increased compliance responsibilities on employers.

The State law expands on pay disclosure requirements that took effect in New York City in 2022.

Covered Employers

The New York pay transparency requirements will apply to employers with four or more employees. However, there is a partial exception for staffing companies that place employees with various other organizations on a temporary basis.

The law also appears to impose compliance obligations on any “agents” of a covered employer who are responsible for advertising job openings.

Due to conflicting definitions of “employer” in the Labor Law, it’s unclear whether the New York pay transparency requirements will apply to public (i.e., governmental) employers.

Mandatory Disclosure Requirement

In advertising a “job, promotion, or transfer opportunity that can or will be performed, at least in part, in the state of New York,” a covered employer must include:

  • the compensation or range of compensation for such job, promotion, or transfer opportunity; and
  • the job description for such job, promotion, or transfer opportunity, if such description exists.

Where a position will be compensated solely on a commission basis, the employer can satisfy the compensation disclosure by generally stating that the compensation will be based on commissions.

The New York pay transparency law does not offer much additional clarification on these notice requirements. Instead, it directs the New York Commissioner of Labor to issue rules and regulations to advise employers further on the application of the law.

Recordkeeping

Under the law as originally enacted, employers must maintain records listing the history of compensation ranges for each job, promotion, or transfer opportunity and the job descriptions for such positions, if they exist.

Penalties

Applicants and employees can file a claim of noncompliance with the New York pay transparency law through the New York Department of Labor.

If the DOL finds a violation, it may impose civil penalties of:

  • $1,000 for the first violation;
  • $2,000 for the second violation; or
  • $3,000 for the third or subsequent violation.

The law also prohibits employers from retaliating against individuals for exercising their rights under the New York pay transparency law.

Anticipated Amendments

In signing the new law, Governor Hochul’s approval memorandum indicated that she has “secured an agreement with the Legislature to make technical changes to the bill.” Specifically, she mentioned:

  • Clarifying what qualifies as “advertising” a job;
  • Excluding remote job opportunities performed entirely outside of New York without a connection to a New York office or supervisor; and
  • Eliminating the previous record maintenance requirement for businesses.

On January 11, 2023, Senator Jessica Ramos (the lead sponsor of the original law) introduced a bill (S1326) including amendments based on this agreement with the Governor. As initially drafted, the amendments would:

  • Explain that a job is only subject to the New York pay transparency law if it will physically be performed, at least in part, within the State, or will physically be performed outside of New York but reports to a supervisor, office, or other work site in New York;
  • Define “advertise” to mean “to make available to a pool of potential applicants for internal or public viewing, including electronically, a written description of an employment opportunity;” and
  • Eliminate the law’s specific recordkeeping requirements.

[Update: The amendments were passed by the Legislature and enacted by the Governor’s signature on March 3, 2023.]

Prepare Now

We expect to see both statutory amendments and additional guidance from the NY DOL before the New York pay transparency law takes effect. However, those may not be final until close to the September 2023 effective date. To ensure timely compliance, employers should begin planning in advance. Appropriate actions may include updating methods of determining compensation levels, auditing current compensation under applicable equal pay laws, evaluating recordkeeping protocols and procedures, and reviewing job descriptions. Likewise, employers should anticipate requests for salary reviews from current employees and consider their approach in response to such inquiries.

 

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New York Pay Disclosure Law

New York City Pay Disclosure Law Finalized

With recent amendments, the anticipated New York City pay disclosure law will take effect on November 1, 2022. Covered employers advertising for positions that could be performed in New York City must identify the minimum and maximum salary or wage for each job.

Covered Employers

The New York City pay disclosure law will apply to employers with at least 4 employees as long as one of them works in NYC. Anyone employing one or more domestic workers in the city is also covered.

Covered Job Postings

The law applies to all jobs, including promotions and transfers, that could be performed “at least in part” in New York City. Covered positions may be working either in a facility operated by the employer or remotely, such as in the employee’s home. Even positions with a combination of work locations would be subject to the New York pay disclosure law if part of the job could be performed in New York City.

Covered job advertisements include “any written description of an available job, promotion, or transfer opportunity that is publicized to a pool of potential applicants.”

However, the law does not require employers to advertise or post for available positions. It only requires that if an employer chooses to post an opening, they must include the compensation range.

Required Pay Disclosure

Covered job advertisements must state both a minimum and maximum annual salary or hourly wage for the available position(s). By law, “the range may extend from the lowest to the highest annual salary or hourly wage the employer in good faith believes at the time of the posting it would pay for the advertised job, promotion or transfer opportunity.”

Though there is little guidance so far on what will qualify as a “good faith” pay range, the New York Commission on Human Rights emphasizes that the range cannot be open-ended. For example, only stating a minimum hourly rate or a maximum salary would be insufficient.

Though unsaid, presumably the New York City pay disclosure range refers to the starting compensation level.

This law does not require employers to advertise any additional information about compensation or benefits such as overtime rates, insurance benefits, or bonus eligibility.

Penalties

A violation of the New York City pay disclosure law will constitute employment discrimination under the New York City Human Rights Law.

Any applicant or employee who feels aggrieved by an alleged violation of the New York pay disclosure law will be able to file a complaint with the New York City Commission on Human Rights. Potential remedies include awarding lost wages and emotional distress damages, among other available relief.

The law contains partial limits on liability, but it is not clear that they will do much to protect employers.

Only current employers may commence a civil lawsuit for a violation of the New York City pay disclosure law. But, again, a much broader scope of individuals have the attractive option of going through an administrative proceeding with the NYC Commission on Human Rights.

The law also provides for no monetary civil penalty for a first violation if the employer cures it within 30 days. However, this does not preclude an aggrieved individual from pursuing and potentially receiving damages in an administrative proceeding. And the NYC Commission on Human Rights may impose penalties of up to $250,000 for uncured or subsequent violations.

Next Steps for NYC Employers

If you have an employee working in New York City, you may need to include a wage or salary range in job postings beginning November 1, 2022. Do you have 4 total employees? Or at least one domestic worker in New York? Could the job you’re hiring for be performed in NYC–even if that’s not the most likely or preferred location?

NYC employers may have the option of not advertising for positions for which they don’t want to disclose a pay range. But if you do post, you will need to decide what a “good faith” wage or salary range is for each position advertised.

 

Could pay disclosure requirements be coming throughout New York State? Follow Horton Law on LinkedIn for our latest updates.