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Now that 2014 is here, many new laws are going into effect on the federal, state, and local levels.  Employers must face the challenge of ensuring they recognize new laws exist and ensure compliance.  From minimum wage increases in several states (including New York, New Jersey, Connecticut, and Rhode Island) to implementation of the Affordable Care Act (ObamaCare) to new poster requirements, employers often feel it is impossible to keep up.  Like an annual checkup, conducting an internal audit on an annual basis can help identify areas of non-compliance so they can be corrected.

By conducting an audit of all your HR practices, you can uncover potentially costly errors.  Often, these errors are the result of decisions made long ago that went unchallenged or new laws that went unnoticed.  At a minimum, employers should visit the local and federal Departments of Labor websites to see what is new.  There are also RSS feeds available from many governmental and private forums that can help keep you current.  Of course, working with experienced labor and employment counsel – and getting their regular legal updates – increases the likelihood of uncovering errors and staying current.  If you want to go further and have a full audit, that is the best strategy.  But remember, what you find may become public and that is troubling.  To avoid this, consider the use of counsel to protect audit-related communications, through the attorney-client privilege, so they are not used against you.  Whether or not an attorney is used, it is important to avoid creating “smoking guns” in the process.  For example, if you discover a group of employees should be paid overtime, a memo to the president on this issue memorializes your mistake forever.  This is one of those few cases where documentation is not helpful.  Also, it is important that management be prepared to implement necessary changes before looking for errors.  If management will not fix the problems, the audit process may well be a mistake for it can transform unintentional violations into intentional ones.

Brody and Associates regularly advises management on complying with state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.965.0560.