human resources 101 - lba barnewold-hr compliance-lba 7-2016.pdfpresented by debbie barnewold, phr,...

Human Resources 101Audit and Best Practices in Key Areas of HR Function

July 2016Presented by Debbie Barnewold, PHR, SHRM‐CP

What is an HR Audit?

Process of examiningpolicies, procedures,documentation,systems and practiceswith respect to theHR function.

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Reveals strengths, weaknesses and issues needing resolution

End goal is to keep bank compliant‐avoid any exposure

July 2016Presented by Debbie Barnewold, PHR, SHRM‐CP 2

Why conduct an HR Audit?

Compliance

Policies, Procedures

& Best Practices

Function Specific


Areas of Review

Compliance with Current Laws


I‐9’s

W‐4’s

EEO

FLSA

ADA

FMLA

Minimum Wage/Fair Wage

Affirmative Action

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Common Compliance Concerns


I. Form I‐9 documentation and possible discriminatorypractices

II. FLSA misclassification

III. Required compliance reporting

IV. Placement of information in employee files anddocument retention

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I‐9 Forms, Procedures & Compliance

Section I


Form I‐9


Establishes a worker’s identity and authorization to work in the U.S.

Section I completed by first work day

Use most recent version of form required

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Preventing Discrimination in I‐9 Process‐Section 2


• An employer must allow the employee to present his or her choice of documentation to complete form

• An employer may not ask for specific or more documents, or reject a valid document

Note : original documents provided must be physically inspected (does not have to be same person running E‐Verify)

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Completion of I‐9 Process


Employer c0mpletes verification (Section 2) by three business days after first day of work for pay

Person reviewing documents should complete Section 2

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Monitors employers who knowingly violate or circumvent the I‐9 process‐Created Immigration and Customs Enforcement

(ICE)

Investigates discriminatory practices and charges filed by injured parties –Created Office of Special Council (OSC)‐Civil Rights

Division

Monitoring Agencies

E‐Verify Program


An electronic program that verifies an individual’s permission to work in the U.S.

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Preventing Discrimination in E‐Verify Process


• Do not use E‐Verify to pre‐screen employees in any way

• E‐Verify does not permit employers to ask for specific documents during the I‐9 process

• Delay E‐Verify if employee has not yet received SSN and run through E‐Verify only after they receive their SSN

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Select time of review‐may be completed same time annually

Run report of new hires within time frame (or baseline audit for current staff)

Review selected I‐9’s for completion of all sections Identify any forms that may need corrections Attach any notes to explain corrections

Source for audit process‐SHRM “I‐9 Audit Checklist” and SHRM “How to Conduct an I‐9 Audit” dated 5/29/2015


I‐9 Internal Audit‐How to complete?

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I‐9’s should not be a part of employee personnel file‐No indication of immigration status should be in personnel file

Current I‐9’s may be stored electronically or in one main binder for review

Must retain terminated employee’s I‐9 for three years from DOH or one year from termination , whichever is later

Best practice to select date to purge annually


I‐9 Storage and Purging

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Be prepared…‐complete, maintain and destroy your Form I‐9’s

and have a written I‐9 policy in place assuming that your company will be subject to a “Notice of Inspection” by Immigration and Customs Enforcement in the near future

‐an ounce of prevention will allow your bank to avoid paying fines


I‐9 Compliance

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Resources for I‐9 Compliance

READ the HandbookFor Employers M‐274

KEEP “I‐9 CENTRAL” on desktop‐link to E‐Verify


FLSA MisclassificationSection II


FLSA Misclassification


Review of Independent contractor relations

Use IRS 20 Factor Test, “Independent Contractor or Employee?”

Performing same duties as current employees?

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Unintentional infraction‐‐$50 for each W‐2 not filed‐penalty of 1.5% of total wages not reported‐payment of employee and employer FICA‐Interest accrued daily from date taxes should have been deposited‐Failure to Pay penalty‐monthly fine up to 25% of total tax liability

Fraud/intentional misconduct‐assess additional penalties by IRS


Contractor Misclassification‐Possible Fines

FLSA Misclassification


Employees are properly classified as exempt or non‐exempt

Use salary basis threshold and duties test to determine status

Use updated job descriptions to determine if duties qualify

Updated salary basiseffective Dec. 1, 2016

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Back overtime wages (2‐3 years) Back taxes on wages, penalties, interest, attorney fees and court costs

Liquidated damages=amount of unpaid wages Willful violation may include up to $10K penalty


Employee Misclassification‐Possible Fines

Compliance ReportingSection III


What is Equal Employment Opportunity (EEO)?

Provides for jobs and services to be open and available to anyone who qualifies, regardless of race, color, religion, sex, national origin, veteran status, pregnancy, age or disability (or protected classes)

People should be selected for jobs based on their job‐related knowledge, skills, and abilities


Employees with 15 employees or more would develop program to uphold Title VII:

‐Includes employer’s statement of commitmentto upholding equal opportunity‐Posting of “EEO: It’s the Law” poster accessible to all applicants and employees‐Develop policies and procedures to comply in all employment practices‐Provide training to employees and managers


Compliance with EEO law

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Collects data to report the gender and race/ethnicity of your workforce by location in one report

Required to file annually

Allows employees to self‐identify


What is the EEO‐I Report?

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Private employers‐100 or more employees (FT & PT, not equivalents)

All federal contractors‐50 or more employers (FT & PT, not equivalents)


Who needs to file EEO‐1?

Yes…under the “Supply and Service Contractor” provisions of the Dept. of Labor if they meet the following:

‐ have 50 or more employees (FT & PT)‐are insured by FDIC (considered government contract)‐serve as a depository of Federal funds in any amount; or‐is an issuing and paying agent for U.S. savings bonds in any amount


Are Banks considered Federal Contractors?

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File electronically by September 30th annually

Keep identification records for 2 years from filing

Use findings to educate managers, executives and board on recruitment endeavors


EEO‐1 Annual Reporting

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Penalties for Non‐Compliance


In June 2016, EEOC announced an increase for failure to post the most recent “EEO is the Law” poster from $210 to $525 per violation, a 150% increase

Employer could be subject to court order to compel to report

False reporting could result in fines or imprisonment

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If a discrimination charge is filed against your bank with the EEOC, the agency may check to see if report was filed

Could negatively influence the investigator’s opinion of the bank


Non‐Compliance

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Proposal of annual collection of pay data along with demographics

12 bans of pay grades

Proposed in Feb, 2016, currently in review

If approved, would affect 2017 reporting


Recent EEOC Proposal

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Affirmative Action requires that federal contractors take proactive steps to provide equal employment opportunities to minorities, women, individuals with disabilities and veterans in protected categories.

AA requires a written action plan to target outreach efforts to facilitate hiring employees from diverse backgrounds.


What is Affirmative Action (AA)?

Employer can determine 12 month reporting period for outreach efforts

Use data from prior 12 months Plan should include data reporting for minorities and women, disabled and protected veterans

Retain records and reports for 2 years after close of plan year

Communication of recruitment efforts and results to managers, executive and board members


Annual AAP Compliance

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OFCCP selects target audits annually by reviewing company data on EEO‐I

Severe money penalties and government intrusion



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Replaces VETS 100‐new designations of protected Veterans

Required for 50 or more employees of a bank/federal contractor

Submit annually by 9/30 Retain reports and records for 3 years after last report filing


Vets‐4212 Form

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Types of plans subject to annual reporting to IRS and ERISA:‐employer sponsored plan such as 401(k) , profit‐sharing, stock bonus plans, annuity & pension

‐welfare plans such as medical, dental, life insurance,vision, disability, etc.


Form 5500

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ERISA Form 5500 was created so the government can assess the financial condition, investments, and operations of all employee benefits plans

Must be filed annually for all 401(k), pensions and retirement plans regardless of number of participants

Filed electronically no later than 7th month after plan year ends


Form 5500 – Employer Sponsored Plans

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Required for plans that cover 100 or more participating employees at beginning of plan year

Required whether fully insured, funded or partially funded plan

Can file a “wrap plan submission” that contains all defined welfare plans

Filed electronically no later than 7th month after plan year ends


Form 5500 – Welfare Plans

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DOL & IRS can assess penalties for non‐compliance, incomplete forms or failure to file

Can assess penalties of up to $1,100 per day for each day administrator fails to complete

IRS can impose civil penalties for certain incomplete reporting

ERISA provides for criminal penalties for willful violations



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DOL has program for non‐filers called Delinquent Filer Voluntary Compliance (DFVC) program

Encourages benefit plan administrators to voluntarily file overdue annual reports and pay a one time only reduced civil penalty



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EEO‐1 and VETS 4212

Affirmative Action Plan for women & minorities, individuals with disabilities and protected veterans

Form 5500 for pension and welfare plans


Required Annual Reporting

Personnel Files: What to Retain, Where and How Long?

Section IV


Limit access to those with a “need to know” Protection of applicants and employees from discrimination

Identity theft Breach of privacy HIPPA violations


Employee Records‐Compliance Awareness


• Secured file that contains information documenting all aspects of employee’s performance including promotions, transfers, compensation changes , performance evaluations and any disciplinary actions

Employee’s Personnel File Separate Files include:

‐I‐9 Forms ‐EEO/AA records ‐Pre‐hire records ‐Medical records/leave info ‐Worker’s Comp/Accident ‐Garnishments/pay records ‐Investigation files ‐Safety records

Manager’s should only have access to information needed to assist in making employment decisions

Should be a policy or consistent practice regarding employee access to their file

Retain original docs if available‐scanned docs are admissible

If manager files are allowed, training should take place on proper controls‐Manager files are discoverable in a lawsuit


Employee Record‐General Guidelines

Hiring Decisions 2 yrs. satisfies ADEA, ADA, EEO

Payroll records 3 yrs. satisfies ADEA, FLSA, EPA

Tax records 4 yrs. satisfies FICA & FUTA

FMLA claims 3 yrs. satisfies FMLA

I‐9 Form 3 yrs. after DOH of term EE or 1 yr. aftertermination


Employee Record Retention

EEO‐1 2 years after report filing AAP 2 years after close of AAP year Vets 4212 3 years after report filing FORM 5500 6 years after report filing Federal/state 4 years after report filing

tax reports


Reporting Retention

Hiring Practices Pay Practices Employment Policies Performance Benefits Employee Discipline & Termination Records Retention Annual Reporting


All Areas of HR Functions

Are there potential liability concerns?

Are there processes that need tweaking and/or training to take place in order to comply?

Where legal issues are concerned, best action is to consult with attorney


After an Audit‐What’s Next?

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QUESTIONS

Contact Info

Debbie Barnewold

[email protected]

504‐439‐6125

human resources 101 - lba barnewold-hr compliance-lba 7-2016.pdfpresented by debbie barnewold, phr,...

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