Watch Out! 3 Things on the Fed’s Radar

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As we dive headfirst into 2017, some business owners might be worried about what’s to come. The best any of us can do is double check our processes for compliance with current laws and regulation.

These are a few things currently on the Fed’s radar because they have either experienced some changes or noticed some businesses aren’t interpreting the law correctly. Double check your processes, ensure compliance, and relax a little. This is what you need to watch out for.

3 Things Business Owners Should be Double-Checking for Compliance

1. Employee Classification

A lot of business owners, HR professionals, and employees are confused by the definitions of exempt or nonexempt employees. The definition of an exempt employee recently changed but has been clarified. Employee classification is not determined based on salary or job title alone.

The DOL’s new FLSA regulations will take effect December 1st, 2016. Read more about these changes here.

Employers should be preparing for the possibility of a magnified look at their exempt employee classifications.

We have plenty of resources to help you determine whether or not your employees indeed qualify for the exempt status or if they are regular nonexempt employees. Download our free whitepaper for more information.

2. Disciplinary Processes

Disciplinary action is probably not something you want to plan for. But it will come up eventually and you should be prepared. Mistakes happen when people are forced to act before having a plan or considering the consequences of their own actions. These are 7 tips to help you prepare for the inevitable occurrence:

  1. If it isn’t written down, it didn’t happen.
  2. The palest ink is better than the best memory.
  3. You cannot manage what you cannot measure.
  4. Every employee should understand one basic truth: a respectful workplace is more pleasant and more productive for everyone.
  5. Unarticulated expectations are a sign of ineffective leadership.
  6. Listen with the intent to understand.
  7. The behavior track: knew better, behaved differently, end of story.

These tips alone won’t ensure your disciplinary processes remain in compliance. This takes having a solid process and thoroughly training anybody who might have to carry out this process. In our free whitepaper, you’ll find descriptions for each item in the list above and a list of the 9 most frequent reasons for disciplinary actions.

3. 1099s and W-2s

Do you work with employees or independent contractors? A lot of employers find it tempting to hire independent contractors because there can be some tax benefits for your business. That’s all well and fine if these workers actually qualify as independent contractors. That might not be as simple as you think.

This is on the radar, just as misclassification of exempt or nonexempt employees. The DOL (Department of Labor) has stepped up its own enforcement game by granting funding to 19 states to enhance misclassification auditing programs. They are giving multiple states large incentives to find and penalize businesses with misclassified contractors that should be classified as employees.

You can find the FLSA and IRS classification tests and much more information in our free whitepaper.

We wish every business owner and entrepreneur the best of luck going into 2017. We hope our resources have been useful to you and you can feel confident knowing your business is compliant. Keep living the American dream and stay free!

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