This article is the second in a two-part series on common federal regulations and best practices for compliance.

The first article in this series listed the highlights and thresholds for the Americans with Disabilities Act (ADA), Title VII, the Age Discrimination in Employment Act (ADEA), and the Family Medical Leave Act (FMLA). This article will outline some best practices for compliance, as well as address other regulations that organizations should know about.

Violation Penalties: ADA, ADEA, FMLA and Title VII

Penalties for violating these federal acts can be substantial.

ADA. The Americans with Disabilities Act requires employers of 15 or more to provide reasonable accommodations to employees and job applicants with a disability, unless doing so would cause significant difficulty or expense for the employer. Violators can face fines of up to $75,000 for the first violation and $150,000 for additional ADA violations. States and local governments may allow additional fines and require businesses to meet a higher standard of accessibility than the ADA requires.

Title VII. A provision of the Civil Rights Act of 1964, Title VII prohibits employment discrimination based on race, color, religion, sex, and national origin. Employees may seek a jury trial, with compensatory and punitive damages up to the maximum limitations established by the Civil Rights Act of 1991. Potential damages are based on the employer’s number of employees:

  • 15-100 employees, up to $50,000
  • 101-200 employees, up to $100,000
  • 201-500 employees, up to $200,000
  • Over 500 employees, up to $300,000

Remedies of back pay, reinstatement, and retroactive seniority are available for all types of discrimination, whether intentional or not, or disparate impact. Disparate impact is any policy that adversely affects one group of people of a protected characteristic more than another, even if the employer doesn’t intend it.

ADEA. The Age Discrimination in Employment Act (ADEA) protects workers and job applicants age 40 and over from age-based discrimination in all aspects of employment. Employees may be awarded back pay, reinstatement, retroactive seniority, and attorney’s fees. Liquidated damages equal to the amount of back pay may be awarded if the violation is willful.

FMLA.  The Family and Medical Leave Act (FMLA) provides job-protected, unpaid leave to employees who need to be absent for qualifying medical, new-child bonding, or military-related reasons. Penalties can include lost back pay, lost front pay, liquidated damages, emotional distress and punitive damages could be awarded.

Record Retention Requirements

Employers must ensure that all records are maintained, either in hard copy or electronically, for the minimum period of time required. Often, employers will use a seven-year rule for purging terminated employee files. Although that is a safe overall strategy, many records do not need to be kept that long. In some cases, however, such as OSHA exposure records, longer time periods may apply.

Here are some selected retention records retention requirements:

  • Selection, hiring and employment records – 1 year after creation
  • Payroll records, time sheets/cards – 3 years after hiring date; 1 year after termination
  • Employment benefit information – 6 years
  • Background checks – 1 year
  • Safety data – 5 years
  • FMLA leave records – 3 years
  • OSHA exposure records – 30 years; medical records of exposed employees – 30 years after employment ends

Protected Employee Discussions

A provision in the National Labor Relations Act (NLRA) classifies discussing terms and conditions of employment with co-workers as a protected act. Employees may discuss wages, salaries, commissions, bonuses, and any other type of compensation. They can also discuss workplace policies, such as break rules, overtime requirements, appearance standards, discipline policies, etc. Essentially, if a topic directly relates to an employee’s compensation, job duties, or performance standards, they can discuss it with co-workers.

Under the NLRA, organizations can violate the law simply by having a policy in place prohibiting employees from discussing their wages or other terms and conditions of employment—even without taking disciplinary action.

Nonexempt Employees and Overtime

The Fair Labor Standards Act (FLSA) Act requires businesses to pay employees for all hours they are suffered or permitted to work. That means that nonexempt employees must be paid for all overtime.

Some employers only pay nonexempt employees for previously approved overtime. However, the act says that those employees must be paid for all overtime, whether approved or not. Failing to pay employees for unapproved time can lead to wage claims and intrusive administrative investigations.

Employers also cannot withhold pay if an employee fails to turn in a timesheet. Under the Fair Labor Standards Act (FLSA), it is the employer’s obligation to keep record of the hours worked by employees. While many employers rely on employees’ assistance via a timesheet or time clock, the employer is ultimately responsible. Therefore, the employer must pay the employee for all hours worked, regardless of whether the employee recorded his or her time or turned in this information to the employer.

The recourse that organizations have for employees who work unauthorized time is counseling and discipline. Although organizations can’t refuse to pay employees for working unapproved time, they can counsel them and discipline them for doing so.

Compliance Practices for Growing Organizations

At a minimum, organizations that are approaching compliance thresholds should update employee handbooks and train staff to reflect regulation requirements. This is an excellent opportunity to complete an HR audit to ensure compliance with all laws and regulations, not just the ones mentioned here.

Conducting routine HR audits is also very important. Regardless of thresholds, a lot of small to mid-size organizations are not familiar with requirements.

The Lindenberger Group has helped organizations in virtually every industry become and remain compliant with all applicable regulations, especially as they grow. For more information or to discuss your HR needs, please contact us at 609-730-1049 or send us an email.