Human resources (HR) managers play an integral role in ensuring the success of any organization. With such an important title, however, comes a great deal of responsibility. HR managers are required to oversee organizational activities like recruitment and hiring, administration of pay, coordination of benefits, and enforcing company policies and processes.
In any sector of a corporation, compliance with the law is extremely important – and HR is no exception. If any HR duties are executed unlawfully, the company could face severe repercussions, such as legal action. Not only would such consequences be dire for the company’s reputation, but it could be incredibly costly, thereby threatening the organization’s financial well being.
What Are the Costs of Noncompliance?
According to the Society of Human Resource Management (SHRM), the financial impacts of noncompliance with HR laws can be extremely costly. In many cases, the costs are so significant that they affect the company’s bottom line, particularly if the affected company is a small business. Some of the approximate costs for various noncompliance offences are as follows:
Wrongful Termination – Average costs for a defense attorney total at $85,000. In most wrongful termination lawsuits, the jury decides to provide the plaintiff with $500,000 in damages.
Sexual Harassment – While the amounts awarded to plaintiffs in sexual harassment cases vary drastically case to case, such lawsuits can cost companies millions of dollars. For example, in 2011, an Illinois employee was awarded $95 million because the employer did not manage the sexual harassment complaint properly.
Discrimination – Whether it is on the basis of age, race, sex, physical disability, or nation of origin, a discrimination lawsuit can cost a company millions of dollars if it is found guilty of violating any of the acts in place to protect employees’ rights, such as the Age Discrimination in Employment Act (ADEA) and the Americans with Disabilities Act. In one past case, a former employee who was 37 years of age was awarded $4.2 million by a jury who decided that age was a determining factor in his termination. Another example is a case in which the plaintiff was awarded $18 million after the jury determined that the employer discriminated against them on the basis of national origin.
What Types of Law Do HR Managers Need to Know?
To adequately perform the various functions of their jobs, HR managers must do their research on various types of law. In doing so, they will prepare themselves and their organizations to better meet the needs of employees and avoid costly legal errors. The most pertinent types of law for HR managers to understand include:
Wages and Hours Law
Given that HR managers are responsible for coordinating employees’ pay, they should all be familiar with the Fair Labor Standards Act (FLSA), which is the main statute outlining the following:
- National minimum wage
- Framework for work hours (i.e. the establishment of the 40-hour work week)
- Requirements and procedures for administration of overtime pay
Another critical component of wages and hours law is understanding employees’ entitlement to leave, as outlined by the Family and Medical Leave Act (FMLA). Under this act, employees are entitled to:
- 12 weeks of leave within a 12-month period in an eligible circumstance (i.e. birth of a child; adoption or foster care placement of a child; to care for a spouse, child, or parent with a serious health condition; a health condition that prevents the employee to perform their job; any qualifying exigency arising from an employee’s spouse, child, or parent who is a covered military member on “covered active duty”)
- 26 work weeks of leave during a single 12-month period to care for a covered servicemember suffering from a severe injury or illness (if the eligible employee is the service member’s spouse, child, parent, or next of kin)
Through educating themselves on the regulations set by the FMLA, HR managers will be better equipped to handle employee leave requests in a lawful and efficient manner.
Workplace Discrimination Law
As previously mentioned, discrimination lawsuits can be incredibly costly for corporations. This is why it’s essential for HR managers to familiarize themselves with workplace discrimination laws and the acts currently in place to protect employees. These acts include:
- American with Disabilities Act (ADA) – prohibits employer discrimination against persons on the basis of disability
- Age Discrimination in Employment Act (ADEA) – prohibits age discrimination in the employment space
- Equal Pay Act (EPA) – forbids discrimination on the basis of sex
- Pregnancy Discrimination Act (PDA) – prohibits discrimination on the basis of pregnancy, childbirth, and/or a medical condition linked to pregnancy or childbirth…
Source: Blog | Hppy