Compliance Web: Don’t Get Stuck Seeking Out the Perfect Solution

Perfection in compliance can, in real-world practice, become a block to progress, said Lori Kleiman, SHRM-SCP, managing director of HR Topics, an HR consulting firm in Naples, Fla., on July 1 at SHRM25 in San Diego.

More typically, HR has to get as close to perfection as possible, which often is just good enough, she explained.

“Do the best with what you know,” Kleiman said. “Be ready when a lawsuit crosses your desk.”

Lawsuits can come from many different compliance obligations, she noted, comparing employment law to a “big spider web.” Often, HR gets “caught up with nuances we thought we were doing right” but then finds that there was an error.

What’s Leadership’s Stance?

It’s important to know if leadership at your organization wants “black-and-white” legal answers or if they are willing to “walk up to gray areas in the law,” Kleiman said.

If leadership wants to be on the other side of the law, members of HR have to decide if ethically they want to continue working for that employer, she added.

But there’s “plenty of gray space” in the law, Kleiman said. 

Compliance is confusing partly because of the language of the laws, but also because businesses and their strategic directions are constantly changing, even as technology is evolving. 

Added to that, each organization has managers who are doing “who knows what,” she said. “Try to put systems in place to mitigate some of the risk” with managers’ actions.

Compliance Pain Points

Kleiman highlighted several current compliance challenges for HR.She noted that the U.S. Equal Employment Opportunity Commission has issued a document to employees telling them how to sue if they believe they have been discriminated against because of inclusion and diversity efforts at work.

Toolkit: SHRM’s BEAM Framework for Inclusion

Kleiman then highlighted I-9 compliance and noted that there is a new I-9 form. She encouraged employers to audit their own I-9s every year, even if they have digital I-9s. Some digital I-9s allow employees to leave their Social Security number field blank. I-9 audits are on the rise, she added.

Kleiman said she’s been through three federal I-9 audits and said they’re “not that big a deal as long as you’re not trying to intentionally hire undocumented workers.” But employers can be fined for little, technical errors that can add up to thousands per employee, she noted.

As for Fair Labor Standards Act compliance, when managers are resisting classifying someone as nonexempt, hand them the U.S. Department of Labor’s Fact Sheet 17A and ask them to circle where the person qualifies as exempt and request that they then talk about it with you later. “Half the time, you never hear from them again,” she said.

One new compliance challenge is lawsuits being brought over the fiduciary responsibility of group health insurance plans, Kleiman noted. Look more critically at who your health insurance brokers are, she recommended. “So many of us have brokers for 10 to 15 years,” she said. It’s critically important every three to four years to bring in multiple brokers and make sure the company is choosing a broker that’s a good decision on behalf of employees, Kleiman said.

“Look at various plans,” she said. “Document why you went with a certain plan.” 

If an employer can show it’s not picking just the cheapest plan but has a business reason for its decision, it’s met its fiduciary responsibility, Kleiman said.

Policy Considerations

Employers also should regularly review employee handbooks — at least once a year, Kleiman recommended. “Ask your management teams to reread them and come back with updates they think are necessary,” she said.

Kleiman said she notes in the handbooks of multistate employers where the corporation has its headquarters and adds that if an employee lives elsewhere, the state or local law of their jurisdiction always applies. It would anyway, even without this disclaimer.

Having an ethics policy is increasingly important, Kleiman said. But she added that leaders have to walk the walk, as well, if an employer is going to adopt such a policy.

Policy: Remote-work conduct

Every employer needs a remote-work policy, even if work is mostly onsite but work from home is offered, say, once a month, Kleiman said. 

Note that remote work is a privilege, even if the employer is a fully remote organization, she added.