As an employer, you probably know that there are HR non-compliance penalties for failing to comply with local, state, and federal employment laws. When companies fail to meet these requirements, they can face significant consequences. Compliance with these HR regulations is important—not just to avoid financial penalties, but to maintain a positive work environment and reputation.
Most common HR non-compliance fines businesses may face
Here are some of the most common HR non-compliance penalties businesses may face:
- Affordable Care Act infractions: Penalties for medium businesses can include fines for not offering affordable coverage or healthcare that meets the minimum coverage, value, and affordability requirements. The 2023 penalty is either $2,880 or $4,320 (based on violation type) per full-time employee, minus the first 30 employees. For example: If an employer with 150 employees does not offer health insurance to its full-time employees and their dependents, the penalty would be $345,600 (150 – 30 = 120 x $2,880 = $345,600).
- Americans with Disabilities Act infractions: Violations related to hiring and workplace accessibility can lead to civil penalties, with varying amounts for first-time and repeat offenders.
- COBRA infractions: Failing to offer COBRA coverage as mandated can result in tax penalties per qualified beneficiary.
- Employee classification infractions: Misclassifying employees as exempt or non-exempt under the FLSA or incorrectly categorizing workers as independent contractors can lead to infractions. Misclassification can result in steep fines and other legal complications.
- Equal Pay Act infractions: Failure to pay male and female employees equally for substantially similar work can lead to salary increases, back pay, court costs, and attorney fees.
- Family Medical Leave Act (FMLA) infractions: Violations can lead to financial penalties and obligations to compensate employees for time covered under the FMLA.
- Form I-9 infractions: Non-compliance with requirements for employee work authorization verification can result in fines, which may increase for repeat violations.
- Incorrect wage infractions: Incorrectly calculating payroll, especially for businesses with employees across different states, can lead to wage-related infractions. These may include violations of varying state minimum wages, income taxes, and court-mandated wage garnishments. For example, in Connecticut, the penalty for wage payment violations is up to both $5,000 and 5 years in prison for each offense.
- Recruitment infractions: Violations of state and federal employment laws can occur during the recruitment process. For example, some states have “Ban the Box” laws. This means that employers cannot inquire about someone’s criminal history prior to a job offer. Similarly, some states ban employers from asking about a candidate’s salary history during the application process.
HR required workplace postings
State and federal governments in the United States require employers to post various workplace posters to inform employees about their rights and responsibilities. The specific posters required may vary depending on the size and type of the business. Here are some common examples of workplace posters that employers may be required to display:
- Employee Polygraph Protection Act (EPPA): Employers subject to the EPPA must display this poster, which outlines the restrictions on polygraph testing in the workplace.
- Employee Rights Under the National Labor Relations Act (NLRA): Employers subject to the NLRA must display this poster, which informs employees of their rights to engage in collective bargaining and other protected activities.
- Equal Employment Opportunity (EEO): This poster informs employees about their rights related to discrimination and harassment in the workplace. It includes information on protected classes, how to file a complaint, and the contact information of the Equal Employment Opportunity Commission (EEOC).
- Fair Labor Standards Act (FLSA): This poster provides information about minimum wage, overtime, and child labor laws under the FLSA.
- Family and Medical Leave Act (FMLA): Employers covered by FMLA must display this poster, which informs employees of their rights to job-protected leave for certain family or medical reasons.
- Minimum wage: This poster provides information about the federal or state minimum wage, overtime rules, and the rights of employees to fair compensation.
- Occupational Safety and Health Administration (OSHA) “It’s the Law”: In addition to OSHA’s safety and health poster, employers may be required to display an additional “It’s the Law” poster that informs employees of their rights under OSHA regulations.
- Occupational Safety and Health Administration (OSHA): OSHA requires employers to display posters related to workplace safety and health. These posters provide information on workers’ rights to a safe workplace, hazard reporting, and contact information for OSHA.
- Uniformed Services Employment and Reemployment Rights Act (USERRA): This poster outlines the rights of employees who are members of the uniformed services, including their rights to reemployment.
- State-specific: Many states have additional labor laws, such as state minimum wage rates, workers’ compensation, and paid sick leave. Employers may be required to display state-specific posters in addition to federal posters.
Employers should regularly check with federal and state labor agencies to ensure they are compliant with up-to-date posting requirements.
How to keep up with HR non-compliance penalties
Keeping up with HR non-compliance penalties can be challenging, but there’s an easy way to make sure you’re covered. SixFifty’s tools, like our Employment Docs platform, make HR compliance quick and cost-effective. Our platform helps employers create their own customized, compliant HR-related documents. Better yet, our legal team monitors employment legislation across the country. When the laws and regulations change, we’ll let you know so that you can regenerate your documents as needed.
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