CHELMSFORD, Mass., Feb. 26, 2014 - With wage and hour lawsuits on the rise, minimum wage controversy sweeping across the U.S., the challenges of the Affordable Care Act (ACA), and a variety of new labor regulations being introduced, 2014 is shaping up to be full of compliance-related issues for employers. With added complexity and an increased focus on enforcement, employers - regardless of their size - need to protect themselves from paying significant penalties for being out of compliance.
Some of the major compliance issues facing employers today include:
Wage and hour lawsuits on the rise - In 2013, the Wage and Hour Division of the U.S. Department of Labor recovered nearly a quarter of a billion dollars in back wages for workers around the U.S. whose employers improperly denied them pay they had earned.1
Increased enforcement at the federal level - The President's 2014 budget includes $3.4 million for increased enforcement of the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA). The budget also provides $5.8 million for developing an integrated enforcement and case management system that will allow investigators to better employ data analysis in identifying violations.2
The Affordable Care Act - With the deadline for ACA compliance pushed out until January 2015, some organizations think they have time to figure things out, but in actuality, the pressure is still on. Many affected organizations have already started to conduct their "lookback" monitoring to see what hours employees have worked over a historical period, and those that haven't need to. Likewise, all employers must be sure that workers are classified correctly and that there is a clear record of hours worked.
Minimum wage - More than 20 states have taken matters into their own hands and raised their minimum wages above the federal minimum wage level and several more are expected to follow suit in 20143. Employers with multi-state operations must keep track of these changes and ensure that they are paying employees properly.
The Family and Medical Leave Act - The U.S. Department of Labor's Wage and Hour Division will publish a Final Rule to implement statutory amendments to FMLA which will expand the military family leave provisions and incorporate a special eligibility provision for airline flight crew employees, as well as making some additional regulatory changes.4
Effectively managing all of this complexity with outdated systems, spreadsheets, home-grown reports, and manual calculations is nearly impossible.
Organizations of all sizes should consider workforce management solutions that provide complete automation and high-quality information for driving cost-effective labor decisions. The right workforce management solutions can:
Provide accurate information about hours worked by both full-time and part-time employees;
Accurately track and manage the complexity of both intermittent and continuous leave;
Accurately calculate, monitor and manage overtime;
Reduce the likelihood of payroll error;
Deliver timely analysis of employee data to help determine benefit eligibility;
Monitor and analyze workforce schedules, time records, and benefits enrollment in real time; and
Provide comprehensive auditing and reporting features.
Paul DeCamp, shareholder, Jackson Lewis P.C. and former administrator, Wage and Hour Division, U.S. Department of Labor
"The laws governing wage and hour issues are complex, vary from one jurisdiction to the next, and change over time. Ignorance of the law is no excuse; organizations must be compliant with all applicable federal, state, and local wage and hour regulations. For organizations with operations in multiple states, compliance is a complex and ongoing process, one that is further complicated when organizations rely on manual or outdated systems for employee time and pay policies. Operating with outdated systems such as these leaves an organization open to wage and hour claims."
Mollie Lombardi, vice president and principal analyst, Aberdeen Group's Human Capital Management practice
"As organizations sort out the nuances of the ACA legislation, many are realizing the need for better data to help them understand the makeup of their workforce, both in the past and moving forward. While compliance and reporting are absolutely necessary, they will not be sufficient to truly enable an organization's business strategy. Taking this opportunity to think through all the ways in which workforce management strategy supports overall business objectives can position HR leaders to have a huge impact on organizational performance as well as costs."
Charlie DeWitt, vice president, business development, Kronos
"The compliance landscape for employers today is incredibly difficult and complex. Good intentions aren't enough. We are seeing lots of employers who have an illusion of preparedness: they think they are prepared for the coming legislative changes, but realize once they look more closely, that fundamental changes are necessary. Organizations need to be able to track, integrate, and analyze data across what are, in many cases, disparate functions including timekeeping, scheduling, and human resources. With workforce management solutions from Kronos, organizations can do just that."
Join us for a webinar at 2:00 p.m. on February 27 - "The Affordable Care Act: Compliance is Just the Beginning" with Mollie Lombardi, vice president and principal analyst, Aberdeen Group's Human Capital Management practice.
Take a look at the lighter side of workforce management in our Time Well Spent cartoons.
About Kronos Incorporated
Kronos is the global leader in delivering workforce management solutions in the cloud. Tens of thousands of organizations in more than 100 countries - including more than half of the Fortune 1000® - use Kronos to control labor costs, minimize compliance risk, and improve workforce productivity. Learn more about Kronos industry-specific time and attendance, scheduling, absence management, HR and payroll, hiring, and labor analytics applications at www.kronos.com. Kronos: Workforce Innovation That Works™.