This year has already proven to be one of dramatic change for businesses in all industries. In fact, the stakes may be as high as they have ever been for human resources (HR) compliance. To take a step in the right direction, read the regulatory “cheat sheet” below to help you improve your company’s HR practices in six areas of HR compliance.
With those in mind, read the story of one successful contractor detailing their company’s efforts to make HR practices and HR compliance a little easier and a lot more cost effective. Let’s start with the regulatory scene:
1. The Affordable Care Act (ACA)
For years, critics have said that the ACA is unsustainable and has significantly increased costs for employers. Others claim the ACA is also bad for consumers because of increasing premiums in the marketplace. Regardless of where you stand on the issue and the many disagreements to date in Congress, the following a few elements that are most likely to be part of final legislation.
- A push for Health Savings Accounts (HSAs)
- Insurance for those with pre-existing medical conditions
- Tax credits for those who purchase insurance if they don’t have access through an employer or a government program
- Continued coverage for dependents to age 26
This internet-based system allows businesses to determine the eligibility of employees to work in the United States. It is now used by more than 600,000 employers across the nation, but it could soon be a requirement for all employers. Currently, it is voluntary, although some states require either E-Verify or a program like it to be used in the hiring process. Congress has tried to mandate E-Verify several times in the past, but has never been able to make it stick. Currently, E-Verify is used when hiring certain federal government contractors and subcontractors.
3. Six weeks of paid maternity leave
This may soon be an option for new mothers. There is a similar program already in place in California. The temporary benefit through the Unemployment Insurance system would cost about $300 per week. Current proposals do not appear to include new fathers and would not extend to other forms of leave covered by the Family and Medical Leave Act (FMLA).
4. The Overtime Exemption Rule
This is not likely to survive during the Trump Administration. These regulations would have meant that certain nonexempt employees making less than $47,476 per year ($913 per week) would be entitled to overtime.
5. OSHA workplace safety changes
A new OSHA rule prohibits employers from using drug testing, or the threat of drug testing, as a form of adverse action against employees who report work-related injuries or illnesses. Now, all employees whose conduct could have contributed to the incident would be tested, not just the injured worker. A new Reporting and Safety Incentive regulation prohibits any company policy that disciplines employees for failure to immediately report injuries or illnesses. Instead, employers must give their employees a reasonable amount of time, such as the end of the shift or 8 hours, to report such incidents. OSHA now prohibits safety incentive programs that deter the reporting of injuries.
6. National Labor Relations Board (NLRB) changes
There are currently two vacant positions, and the terms of two other board members come to an end in 2017. It is expected that the NLRB will shift from a Democratic to a Republican majority at that time. The new board is likely to provide relief from the “quickie” election rule that sped up the time frame in which union representation elections are conducted. The board may also abandon efforts to make it easier to declare corporate franchising employers as joint employers with their individual franchisees. As joint employers, franchising corporations are co-liable for legal violations.
What does all of this mean to you? How are you going to keep track of the changing HR climate as it affects construction business owners? And what about the many daily HR issues that don’t necessarily reflect regulatory concerns? The following are some insights from Bill and Sue Texeira, owners of Texeira Contracting Inc. (www.texeirainc.com), a Florida-based, commercial construction company that manages projects across the country.
Texeira recently began to expand nationally, using a business model that relied on a core, centralized staff and a traveling general superintendent. The firm hires local project superintendents, and subcontracts 90 percent of its work to local businesses. With its national expansion, Texeira found itself enmeshed in concerns related to payroll, reporting and workers’ compensation issues that varied from state to state. A major issue was the company’s inability to find affordable workers’ comp coverage in some states. In addition, its home office staffing was not sufficient to handle the differing payroll and reporting regulations in multiple states.
“We knew that a growing company [like] ours couldn’t afford to staff up to manage HR, health benefits, payroll and workers’ compensation in-house; or to identify and follow the state rules for many of these functions in multiple states,” said Bill Texeira. “An insurance agent we know suggested outsourcing HR functions, based on his experience with other clients, and we chose to outsource to a full-service professional employer organization (PEO) that could handle all these tasks in a one-stop-shop, cost-effective way.” Some results the company has seen from this decision include:
- Savings in time and money due to becoming part of a large workers’ compensation purchasing pool
- A reduced need for increased administrative hiring for HR functions
- Improved ability to attract talent by offering enhanced employee benefits
- HR guidance in such areas as unemployment benefits
- Ability to focus on growth, rather than HR regulations and practices
- Reduction in concern about HR compliance
Every construction company has its unique challenges. However, nearly every construction business owner is faced on an almost daily basis with HR regulations and the expense of managing an HR program. You didn’t get into the construction business to be an HR specialist. It may be worthwhile to examine some degree of HR outsourcing to reduce compliance concerns, control costs and put the focus back on growing your business.