Compliance Trends to Watch

Stay informed (and in compliance) for the year ahead.

The labor, tax and payroll compliance landscape is always shifting and most of the time it feels like the only constant is change. It can be hard to sift through all the noise and find the information that’s most important to your janitorial or security business. At TEAM Software, we keep our eye on these topics because we hear all the time how compliance-related issues keep our customers up at night. We also understand how costly noncompliance can be. That’s why we actively update our solutions to mitigate the burden of tracking and managing payroll, tax and labor compliance to help reduce that risk.

To help you stay informed, we’ve compiled what we consider our top trends for you to watch right now and what they mean for your business.

1.      Minimum Wage Increases

What’s going on?

Several cities and states have already enacted minimum wage increase legislation, and Congress followed suit with proposed legislation to raise the federal minimum wage to $15 per hour by 2024. The current minimum wage is $7.25 as it has been since 2009. Raise the Wage Act would gradually increase the wage floor from $7.25, and then adjust it annually based on the national median hourly wage. The bill would also phase out subminimum wages for youth, tipped workers and workers with disabilities.

The legislation has garnered widespread support from Democrats and the general public based on the belief that minimum wage should increase to counter the rising cost of living. Conversely, some argue that raising the minimum wage too high will result in layoffs and bankrupt businesses that can’t afford to pay employees.

What does this mean for you?

This legislation is still pending and should be reviewed by all employers. This legislation could have a significant impact on the janitorial and security industries which rely on hourly, lower-wage workers. While increasing the federal minimum wage would increase the average income of low-wage workers, you could face some tough choices to make it affordable for your business. To avoid layoffs, you could pass the increase on to your customers, but in service-related industries with tight margins, there isn’t much room to increase rates and remain competitive.

Pay attention to this legislation as it progresses through the government. To be proactive, assess any of the positions you have that would be impacted by the minimum wage increase, and start determining how it would impact your financials if those pay rates were to increase by the proposed amounts. Contact your state representative if this mandate could have a negative impact on your business.

2.      Sexual Harassment Training

What’s going on?

Sexual harassment training is nothing new to the compliance conversation for Human Resources departments. But, the real question is, would your company be ready if it were audited tomorrow? There tends to be an increase in random compliance audits when there is an increase in sexual harassment stories in the media, and that has been the case for the past several months. Many new mandates have been created and others have been updated, including over 125 pieces of sexual harassment legislation from 32 states introduced in 2018.

The most comprehensive policies were passed in California and New York. California updated existing mandates to impose civil and criminal liability on an entity that interferes with an employee making a protected disclosure. New York provided new mandates that went into effect at the beginning of 2019 requiring all employers to adopt written sexual harassment prevention policies and institute annual anti-harassment training for employees. You can read more about the proposed and enacted mandates from the National Conference of State Legislatures.

What does this mean for you?

As with any Department of Labor mandate, the laws are different in each state. With all the attention on the subject, HR professionals should review company policies to ensure they comply with state mandates that have already been put in place. We also recommend reviewing sub-contractor policies to ensure you have a clear understanding of your company’s responsibility.

If you do business in a state that doesn’t have sexual harassment legislation already in place, you should look at your current policies to determine if there are any areas you could preemptively improve upon. Understanding this is a nationwide trend that is going to keep expanding, it’s better to be prepared and have the policies already in place than having to react after the legislation passes.

Ensuring you have a way to track trainings like sexual harassment training, certifications, licenses and other employee information can make this implementing this type of process simpler and less time-consuming. And, if the system you use tracks this, you have a great audit trail for compliance if you ever need it.

This article highlights two of the U.S. labor, tax and payroll compliance updates we’re watching right now. For the other three, download our free Compliance eBook.

Please continue to use industry resources such as the Society for Human Resource Management (SHRM) and the American Payroll Association (APA) to stay updated on all compliance updates. TEAM Software is dedicated to ensuring our software solutions meet the ever-changing compliance needs of our customers. While we’re committed to keeping you informed, it’s important to do your own research, and consult your own legal and tax advisors when necessary, too.

About Nina “9” De Forge

Nina De Forge joined TEAM Software in 2017 and is the Compliance and Payroll Product Manager. Nina, also known as “9,” has been working with human resources, payroll and tax compliance since the 1980s and has a broad range of experience across each discipline. She is an active member of many industry organizations, including the IRS Information Reporting Advisory Committee and its Nationwide E-Filer’s National Focus Group, the Canadian Payroll Association, the Society for Human Resource Management and the International Association for Human Resource Information Management. She is a published author in the book American Payroll Association Basic Guide to Payroll.