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Are there certain aspects of your business that you feel a bit vulnerable or exposed?  Well welcome to the world of most business owners.  Almost everyone is well aware of the tremendous increase of burdensome regulations that Washington has imposed on businesses.  And most business owners are experts and very knowledgeable in their professions and industry trades.  However, most business owners also have this nagging awareness in the back of their mind that many times gives them lots of sleepless nights.  They stress over the fact that there are areas they are far from having adequate knowledge or experience to stay within the regulatory demands.  As well as protection from the legal land mines that could either damage or completely destroy the business they have sacrificed and spent so much blood sweat and tears in building.

So what are these little land mines we’re referring too?  Here are just a few of those regulatory concerns that businesses are expected to be in compliance with:

Family Medical Leave Act (FMLA) applies to businesses with 50 or more employees.  It requires employers to provide 12 weeks of unpaid protected leave for child birth, adoption or to care for an immediate family member with a serious health condition.  The penalties for non-compliance can be back wages, promotions, and legal fees.  The employee must have worked 1250 hours in the previous12 month’s period and it covers parent, spouse and child.  The department of Labor (DOL) over enforces FMLA.  

Age Discrimination Employment Act (ADEA) applies to businesses with 20 or more employees.  This law prohibits discrimination on hiring or termination based on age.  The penalty is back wages, promotions, and legal fees.  The department of Equal Employment Opportunity Commission (EEOC) enforces this law.

Consolidate Omnibus Budget Reconciliation Act (COBRA) applies to businesses with 20 or more employees.  This law requires employers who provide health insurance to offer coverage for up to 18 months after termination at the employee’s expense.  The penalty for violating this regulation is $100 per day.  EEOC is the governmental overseer for this law.  The employee must be notified at the time of enrollment and within 14 days of termination.  The employer can charge up to 2% for administration.  The employee has 60 days to elect coverage and 45 days to pay after electing coverage.

The Title VII of the Civil Acts Right of 1964 (Title VII) applies to businesses with 15 or more employees.  The law prohibits discrimination on the basis of Race, Color, Religion, Nation Origin and Sex.  The penalty for violation is $300,000 plus.  EEOC is the governmental overseers for this law.  Employers with 100 employees or more should annually file the EEO-1 including job, gender, and race of employees.

The Americans with Disablity Act (ADA) applies to businesses with 15 or more employees.  The law prohibits discrimination against persons with disabilities.  The penalty is $300,000 plus.  EEOC is the governmental overseers.  Employers are required to make reasonable accommodations without causing “undue financial hardship” on the employer.

Fair Labor Standards Act (FLSA) applies to businesses with 2 or more employees.  This law requires employers to pay the “prevailing” minimum wage and to pay over-time (40 hours plus) to non-exempt employees.  The penalties for violating this law is double back pay plus legal fees.  The Department of Labor, Wage & Hour Division is the governmental overseers.  Employees compensated on a salary basis are generally considered exempt from overtime compensation.  The Equal Pay Act says persons performing same jobs requiring equal skills, effort & responsibilities at the same establishment may not be paid different wage rates based on gender.

Occupational Safety & Health Act (OSHA) applies to businesses with 1 or more employees.  This law requires the employer to: 1. comply with standards and regulations by the DOL-OSHA; 2. Maintain a safe workplace; 3. Post the OSHA 300 log February 1 – April 30; 4. Contact OSHA within 8 hours of a catastrophic loss (death &/or 3 or more employees taken for treatment).  The penalties range from $250 – $7000 per day; $70,000 for willful violation.  The DOL-OSHA are the governing overseers for this law.

Health Insurance Portability & Accountability Act (HIPAA) applies to businesses with 1 or more employees.  This law requires the employer to provide a certificate of creditable insurance upon employee’s request; portability of insurability.  The penalty for violating this law is $300 per day per effected employee.  The DOL and IRS are the governmental overseers for this regulation.  Furthermore, the employer must retain plan & employee records for 2 years.

Employee Retirement Income Security Act (ERISA) applies to businesses with 1 or more employees.  This law requires fair and equitable treatment of all employee welfare benefit plans.  The penalties are unlimited.  The DOL & IRS are the governing overseers.  This law covers all tax qualified retirement & 125 plans.

Immigration Reform & Control Act (IRCA) applies to businesses with 0 or more employees.  This law prohibits discrimination based on citizenship or immigration status.  There are 3 levels of fins: 1. $250 -$2,000; 2. $2,000 – $5,000; 3. $3,000 – $10,000.  The Department of Homeland Security & ICE is the governing overseers.  I-9 form required; acceptable documentation; birth certificate, drivers license, social security card, passport, etc. I-9’s should be kept in a separate file.

Uniform Services Employment & Reemployment Reconciliation Act (USERRA) applies to businesses with 0 or more employees.  This law prohibits discrimination based on past or present military service.  The penalty is back pay plus lost benefits, and legal fees.  The Department of Labor, Veterans Employment & Training Services are the governing overseers.

Sexual Harassment applies to businesses with 0 or more employees.  This law prohibits sexual harassment in the workplace; unwanted sexual advances, use of vulgar language or public display of sexually oriented material.  The penalties are unlimited for violators.  EEOC is the governing overseer.

Peronsal Responsibility & Work Opportunity Reconcilation Act (PRWORA) applies to businesses with 0 or more employees.  This law requires employers to report all new hires to a designated state agency within 20 days of hire.  The Office of Child Support Enforcement is the governing overseer.  This falls under the “Dead Beat Parent Act”.

This is just a few of the regulatory challenges that businesses have to be well versed and compliant with.  And unfortunately regulations like these are passed and revised almost on a daily basis.  It’s almost impossible for any one person to keep up with all the changes and revisions of each of these laws. 

That’s one of the many reasons why I strongly suggest considering a relationship with a Professional Employer Organization (PEO).  PEO’s have entire Human Resource (HR) departments that devote their time in staying up to date with all regulatory requirements and making sure all their clients are up to date and complaint with all applicable laws that affect their business directly.

And more times than not the business will find that by taking advantage of the PEO’s large group discounts for health insurance and/or their tremendous workers compensation discounts (many times as much as 30% – 50%) as well as no up front deposits and no annual audits the PEO more than pays for it’s self.  Many times using the services of a PEO is far cheaper than doing everything in-house. 

So not only are you using experts in Human Resources to keep your business compliant, but also experts in Workers Compensation and Risk Management, Payroll, as well as Benefits.  Then you have the peace of mind that your business is compliant and well protected and it was less cost than doing it all your self.  Plus your employees enjoy the benefit of having access to affordable benefits that they otherwise wouldn’t have been able to have.

But it’s important to make sure you find that right PEO fit for you business and using a PEO broker is the best way to make sure you get exactly what you’re looking for.  Like every other business every PEO has different focuses and specialties but they also have different limitation and some more than others.  That is another reason why using a PEO brokerage firm can help you find the best partnership for your business.  If you have any questions on this issue please feel free to contact the folks at StroudLink.

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