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2017 Checklist for US Employers

HR Column
Tennis players are familiar with the concept of “unforced errors” — avoidable mistakes not forced by good shots of an opponent that can cost a player the game. Any lawyer who has spent time handling employment matters knows that a company’s unforced errors can sometimes come to the fore during litigation in a way that can negatively impact the employer’s risk.

Thus, taking an inventory early in 2017 can shore up your company’s policies and practices, mitigating the risk of liability by an unforced error.

Areas to check

Confirm employee headcount

This is important for annual disclosure and reporting purposes. Annual reports, press release templates, public filing documents, and website content all need to be updated if your employee headcount has changed, depending on how precise your headcount disclosures are. For example, if your website describes your company as having exactly “6,510 employees,” you may need to update if if there is a material change and you now have 6,700 employees. If, on the other hand, you claim to have “more than 6,500” or “nearly 7,000” employees, no update is necessary.

Smaller companies should be conscious of increasing legal and regulatory compliance requirements as they grow beyond certain thresholds. For example:
•   5 or more employees — California’s Pregnancy Disability Leave applies.
•   15 or more employees — US Americans with Disabilities Act (ADA), and Title VII of the Civil Rights Act apply.
•   20 or more employees — Age Discrimination in Employment Act (ADEA), and the Consolidated Omnibus Budget Reconciliation Act (COBRA) apply.
•   50 or more employees — Family Medical Leave Act (FMLA) applies.
•   100 or more employees — Worker Adjustment and Retraining Notification Act applies.

Review and update policies

Update policies based on changes in organizational culture, expectations, new legal requirements, and, yes, unforced errors that could have cost you the game last year. Pay close attention to your drug and alcohol policies as state laws continue to evolve in their treatment of medical marijuana usage.

While the controversial “bathroom bill” in South Carolina died, North Carolina’s law lives on. In the 2017 legislative session, eight states have introduced legislation that would require individuals to use multiuser restrooms on the basis of gender at birth. Track this legislation and be prepared to comply and notify employees if the laws change in your state.

Update job descriptions

As your organization’s needs and other market forces spur new innovation, are your job descriptions keeping up with the activities of your work force? Job functions can be reviewed first on a high level aggregate basis, drilling down where necessary.
If you have a global workforce, consider the global parity of your positions based on essential functions, responsibilities, and compensation. This can be tricky, since local economics, cultural norms, and scarcity of certain types of labor in particular regions can all drive titles, levels of compensation, and benefits.

Confirm proper job classification

In recent years, the US Equal Employment Opportunity Commission (EEOC) has aggressively investigated and prosecuted allegations of misclassification, where individuals who should be considered employees have been misclassified as independent contractors. Be proactive in ensuring proper classification and compliance with your state’s requirements.

Review compensation

2016 saw an increase in focus on the gender pay gap. Delaware law prohibits an employer from paying disparate rates of pay to employees of the opposite sex for work  that requires an equal amount of skill, effort, and responsibility performed under similar working conditions. States across the United States have similar statutes, so check the states in which you have employees for relevant requirements and brush up on the impact on employment practices of the US Fair Labor Standards Act.

To the extent disparities exist, they may be permissible if, for example, the pay differential is based on a seniority system, a merit system, or on the quantity or quality of production.

Update hiring documents

US federal agencies and more than 21 states have adopted the "ban the box" approach to hiring, encouraging fairer selection practices by deferring questions about an applicant's criminal history until later in the process. Some employers remove the conviction history question from private employers' job applications altogether. This is an opportune time to review and redefine your company’s philosophy on this issue. Update your application documents accordingly, or at a minimum, comply with the law in your state.

Employers can only hire employees eligible to work legally in the United States and must maintain up-to-date I-9 forms for all employees (in a separate file from the personnel file).  A new version of the Form I-9 was released in November 2016, which employers should adopt by January 22, 2017.

Check your posters

If you don’t use a service that sends your posters automatically, update your required posters and notices, especially in light of the states that have increased minimum wage, such as California, which increased its minimum wage to US$10.50/hour as of January 1, 2017. While you’re at it, also review your city’s minimum wage requirements.

Check out vacation and sick leave carryover

Some states, such as California and Nebraska, protect employees against use-it-or-lose-it vacation policies. Most states do not impose outright prohibitions, but may require vacation to be paid out at the end of an employee’s tenure, or require employers to provide a reasonable opportunity for employees to use their vacation time.

Comply with Affordable Care Act reporting requirements

On an annual basis, the US Affordable Care Act (ACA) requires insurers, small employers with self-insured health plans, and employers with 50 or more full-time and full-time equivalent (FTE) employees to report certain health coverage information to the IRS and employees. Determine whether ACA reporting requirements apply to your company, based on the type of health plan you offer, and your employee count in 2015.

Sidebar References

Affordable Care Act reporting roadmap

Ban the Box laws by state

Minimum wage by state

State by state pay equity laws

About the Author

Spiwe PierceSpiwe Pierce is general counsel of ChristLight Productions Ltd., LLC, Lifetime Fellow of the American Bar Foundation, and 2016 Diversity MBA Top 100 under 50 Diverse Executive Leaders. She is a member of the ACC employment and labor, law department management, intellectual property, and litigation sections.


The information in any resource collected in this virtual library should not be construed as legal advice or legal opinion on specific facts and should not be considered representative of the views of its authors, its sponsors, and/or ACC. These resources are not intended as a definitive statement on the subject addressed. Rather, they are intended to serve as a tool providing practical advice and references for the busy in-house practitioner and other readers.