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HR Laws Every Business Owner Should Know
Most of these laws apply to your business, whether you are aware of them or not. Our job is to make sure you are.
After our last post about the work Syndeo representatives do to advocate for small businesses at the state and federal level, we thought it would be an appropriate time to specifically discuss common HR laws that businesses need to be aware of, especially because of changes to them in recent years. This article discusses:
Understanding these HR laws is crucial for ensuring compliance and protecting your business from potential legal issues. Below, we provide an overview of each law and its key requirements.
Fair Credit Recording Act (FCRA)
The Fair Credit Recording Act protects consumers’ credit information and monitors employers’ use of background checks. It requires consumers to be notified if adverse action is taken based on information from credit reports, insurance applications, or employment screenings.
If your company runs background checks on potential employees, you need to understand the scope of those screenings and your legal obligations if you decide not to hire someone based on the findings.
Fair Labor Standards Act (FLSA)
The Fair Labor Standards Act establishes minimum wage, overtime pay, record keeping, and youth employment standards that affect workers in the private sector and in government at all levels — federal, state, and local.
Currently, the changes to the FLSA are significantly impacting small businesses and our clients. As of July 1, 2024, the Department of Labor increased the salary threshold for certain workers, including executives, administrative, or professional positions, to ensure they receive fair pay. With the increase in the salary threshold for overtime pay, many businesses need to assess whether to increase the salaries of these workers to meet the new thresholds or to transition those positions to hourly pay. Changing to hourly wage will be required if these positions fall below the pay cutoff, making them eligible for overtime pay.
Furthermore, another significant threshold increase that will affect more companies is slated to take effect on January 1, 2025. The basic salary requirement has the potential to keep rising as the DOL has introduced a mechanism for regularly updating these thresholds every three years to keep pace with earnings growth.
Syndeo has spent the last several months working with our clients, gathering data, and assessing the options for each of their employees affected by these changes. As future updates occur, we will continue this work to prepare our clients should the thresholds rise again.
Family Medical Leave Act (FMLA)
This legislation allows employees to take up to 12 weeks of unpaid medical leave for specific family or medical reasons while protecting their employment status and insurance coverage. When an employee is out for a qualified event, FMLA is unpaid leave, however some states have passed laws for paid FMLA leave.
Even though we manage FMLA on behalf of our clients, we also see a lot of confusion from both employers and employees, especially when evaluating the type of leave and tracking it. We provide comprehensive training and checklists for our clients to help them work through the FMLA process. The law requires managers and HR representatives to know when the FMLA applies, even if employees do not ask for it by name. We strive to provide clarification to both managers and employees to understand the full process of FMLA.
Health Insurance Portability and Accountability Act (HIPAA)
HIPAA laws protect the portability of employees’ health insurance and certain healthcare-related information. The HIPAA Privacy Rule affects how healthcare providers share their protected health information. While it does not protect employment records, employers can request certain health-related information or documentation (a doctor’s note required for sick leave, for example). Healthcare providers can share this information with employers provided the named employee has given prior authorization.
Following the privacy and protection laws outlined by HIPAA is extremely important. Oftentimes, some employees might unknowingly break them because of a lack of adequate training. Syndeo can provide annual HIPAA training to keep these laws top of mind for employees who work in healthcare or other related fields.
Equal Employment Opportunity Commission (EEOC)
While the EEOC is not exactly a law, this commission enforces laws that protect employees’ rights and prevent discrimination. Recent changes to the EEOC guidelines released in May 2024 helped to define further workplace harassment and address issues that have arisen with the rise of technology in the workplace. With an increase in EEOC complaints in 2023, it is more important than ever that your managers and supervisors be aware of what constitutes harassment and discriminatory behavior.
EEOC claims are relatively easy to file but can be very costly for businesses to defend. The best approach is to be proactive and informed, consistently applying policies to prevent any behavior that might lead to EEOC claims. Syndeo offers annual, up-to-date harassment training for all employees to help them understand appropriate workplace conduct and minimize the risk of such claims.
Pregnant Workers Fairness Act (PWFA)
The PWFA, which took effect in 2023, protects pregnant workers against discrimination. This law requires employers to provide “reasonable accommodations” for expectant workers, which could include longer break times or flexible hours.
While the PWFA applies to organizations with 15 or more employees, employers with fewer employees should consider making accommodations for pregnant workers to foster a healthy company culture. Syndeo can help you update employee policies and handbooks to reflect your commitment to supporting expecting employees.
Beyond our work helping business owners manage their people and other HR functions, Syndeo tirelessly keeps abreast of HR legislation that affects small businesses. So often, our clients are busy leading their businesses, producing their products, and serving their customers. They do not have time to follow pending legislation, let alone process how new laws or rule changes might impact their businesses. This is where a partnership with Syndeo is priceless. We notify our clients of current legislation and its potential effects, updating your employee handbooks and training materials as necessary.
What to do as a business owner.
Here are five practices that Syndeo advises our clients to best position their businesses to handle human resource legislation:
1. Stay Informed
Staying informed is the most important aspect of legislation’s effect on small businesses. While it might seem challenging to add another thing to a busy employer's long list, Syndeo makes this easy. We track potential legislation, inform clients of impending policy changes, and provide updated employee handbooks and training materials.
2. Require Training
Syndeo works with clients across many states. Employing workers across state lines means employers must be aware of and comply with employment laws and regulations for each state. Each state may have different requirements for types of employee training, certifications, and compliance. Harassment policies and training are examples of HR policies that vary from state to state. Syndeo helps keep our clients organized and documents required training with accurate record-keeping. Eliminating any uncertainty about employee training status lifts an unspoken burden from employers, as Syndeo ensures you stay informed.
Having a sign-in sheet at every training is a simple solution for producing training records for future access.
3. Thoroughly Document
As mentioned in the previous point, documentation is a key to communication, not just in the short-term, but also it can impact your company down the road. In addition to detailing performance, disciplinary action, or training, written documentation can also provide an invaluable link in communication for claims that might come up years after the fact. Written documentation can help a business owner process a claim filed after the manager, supervisor, or HR person is no longer with the company. It is a simple step that every business can take to save future headaches.
For example, one of the best documenting practices that Syndeo highly recommends is having each employee review and sign off on their timecard for each pay period. Not only does this timely but simple check help catch and prevent mistakes, but it can also avoid wage claims or disputes down the road, especially for hourly work.
Even sending an email to yourself or a follow-up email to an employee after a conversation or meeting identifying the highlights can serve as simple, effective documentation. Most importantly, documenting in a way that makes the most sense to the manager or supervisor will make the task straightforward and less intimidating, making it more likely to be accomplished.
4. Consistently Implement
No matter what type of HR policies your company decides to enact, it is important to implement them uniformly throughout the organization. Promotions, disciplinary action, position elimination, or layoffs should all be carried out according to consistent standards to reduce the risk of discrimination claims. Maintaining fairness and transparency in these processes fosters a more equitable and positive work environment for all employees.
5. Continuously Review
Syndeo manages policy and procedures, notifying our clients of when legislation affects their businesses and updating handbooks as necessary. While some clients like to review their policies and procedures annually, we work continuously throughout the year to identify who might be impacted and what needs to be put in place to resolve issues before they arise. This continual review can put business owners at ease, knowing that if something may impact their operations or business, Syndeo will be there to notify them and help with the solution.
Navigating the complexities of HR laws is a significant challenge for small business owners who are already juggling multiple responsibilities. At Syndeo, we consider ourselves more than just service providers; we are partners dedicated to safeguarding your business interests. By staying vigilant about legislative changes and ensuring your policies and procedures are up-to-date, we help you maintain compliance and foster a fair, positive workplace environment.
When you succeed, we all succeed. Trust Syndeo to keep you informed and prepared, allowing you to focus on what you do best—leading your business, producing quality products, and serving your customers. Together, we can navigate the ever-evolving landscape of HR laws and secure the future of your business.
Contact Syndeo at (316) 630-9107 today to learn more about HR legislation that impacts your business. Don’t forget to like, share, and subscribe to our newsletter for more thought-provoking HR content from Syndeo. To learn more about how outsourced HR services can get you back to business, contact Syndeo today!
Let us take on your HR functions so you can strive for greatness.
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