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Employment compliance issuesAs an employer, you know that hiring employees comes with a lot of paperwork. While you know that maintaining thorough employee records is important, what you might not realize is that failing to update certain documents or keep them on file properly could land you in hot water with various government entities — and lead to major fines.

The start of a new year is always a good time to check your records and make sure that everything is up-to-date and filled out the way it should be. As you start planning for 2015, add these items to your to-do list to ensure you are in full compliance with state and federal laws.

1. Update W-4 Forms

The W-4 form determines how much of an employee’s check should be held for taxes, and is usually filled out on the first day of work. However, employee circumstances change. They might get married or divorced, have children, or realize during tax time that they had too much or too little withheld from their check. Employees might not think to adjust their W-4s after these events, so making a review period a matter of policy could save them a lot of hassle and expense. Provide employees with a copy of their current W-4, and ask them to fill out a new one only if they wish to make changes. Remind employees that they can make changes at any time, and that they do not have to wait until January to do so.

2. Manage I-9 Forms

I-9 forms may seem simple — and feel like a formality — but failing to comply with all of the regulations in the 69-page I-9 manual can lead to hundreds of thousands of dollars in fines if an Immigrations and Customs Enforcement audit discovers inaccuracies.

An annual review of I-9 forms should focus on several key areas of compliance. These include:

  • Reverification. In some cases, workers are required to provide updated documents to verify their citizenship status before their original documentation expires. At the beginning of the year, determine which employees may need reverification, and either notify them of the pending requirement or review the documents immediately.
  • Purging old files. ICE law requires employers to destroy I-9 forms for former employees either one year after termination, or three years after the date of hire, whichever comes later. If you are subject to an audit, and ICE discovers that you have old or outdated audits, not only will you face fines for failing to destroy the documents, you can also be fined for any errors those documents contain.

Employment compliance issues3. Check Applications

The law requires that all employees fill out, and employers maintain, job applications that contain certain information, questions, and notices. These notices generally have to do with at-will employment status and criminal background checks. Double check that every employee has a completed and signed application in their employee file, and take corrective action if necessary.

4. Reiterate OSHA Requirements

Occupational Health and Safety Administration (OSHA) rules dictate that every employer, regardless of size, must adhere to certain rules and regulations regarding employee health and safety. At minimum, as an employer, you must have a written breakdown of health and safety rules and take steps to create a hazard-free workplace. One of those steps is to provide training to employees.

It’s always a good idea to reiterate the safety standards for your workplace, and the beginning of a new year is the ideal time to provide that training and education. The beginning of the year is also the time when you should review the notices that you’re required by law to post, such as federal minimum wage guidelines, and ensure that you have all of the most up-to-date and relevant postings displayed. Failing to do so could result in major fines if your company is inspected or audited.

5. Review New Laws and Regulations

Every year, lawmakers pass new laws and make changes to existing laws that can affect how employers operate their businesses and manage new employees. Most take effect on the first of the year, so familiarize yourself with changes before January 1, and have plans in place to communicate changes to employees or manage new requirements going forward. When it comes to compliance, lack of knowledge or preparation is rarely a valid excuse, so you do not want to be caught off guard when the new rules take effect. Some of the areas that you should explore to ensure that there aren’t new laws affecting your business include payroll, overtime pay, recordkeeping requirements, leave laws, privacy laws, and anti-bullying or harassment laws.

Compliance in the world of HR is an important issue. Failing to stay within the guidelines of the law can lead to significant fines, legal sanctions, or even bankruptcy if the offenses are especially egregious. Spend some time ensuring that you aren’t making some of the most common mistakes, and start the new year off on the right foot.

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