A “perfect storm” of developments in recent years—from the pandemic and Great Resignation to the shift to remote workforces—have left employers having to navigate an unprecedented business environment. Amid these changes, it’s paramount for businesses to recognize that their compliance obligations haven’t gone away, but instead, are only becoming more complex and challenging. With input from industry veterans from a recent webinar, we’re taking a closer look into the impact of these developments and taking the pulse of trends to expect moving forward.
Managing the Pandemic and Remote Workforce
The pandemic resulted in a majority of organizations conducting work remotely. However, as conditions slowly return to normal, the push for more flexible work arrangements is only expected to grow. According to projections by Ladders, 25% of all professional jobs in North America will be remote by the end of 2022. While employees enjoy the opportunity for hybrid or remote working options, businesses are facing increasing challenges in terms of compliance obligations for a widespread workforce.
With remote work here to stay, organizations can take certain steps to ensure they maintain proper compliance along the way. Professional recommendations include performing risk assessments on tax liabilities, providing the right tools to complete HR tasks and focusing on cybersecurity. Companies like Entertainment Partners have even introduced a checklist for employees looking to work remotely to help with managing local tax and business requirements.
Tax and labor law implications for employers when managing a remote workforce
Because taxes should be withheld in the state where services are performed, payroll teams need to understand the tax withholding regulations at the state level. This also means employers need a suitable way to track employees’ work locations and the percentage of time spent working. An example of this includes CIC Plus recently introducing a Multiple Address Allocation Form — so employers are able to keep track more efficiently.
When it comes to labor law compliance for a remote workforce, it’s significant that employers understand and maintain each state’s specific labor laws. Because providing flexible work options can make this more difficult, companies need to put systems in place to stay on top of state-specific labor laws for their remote employees.
With the lifting of mask mandates across countries, some employers are welcoming employees back into the office. However, returning to the office won’t exactly mean returning to the same policies from before.
Policy changes for employers to be aware of
A major management consideration for employers involves vaccination policies and possible exceptions. These exceptions might include religious, medical or pregnancy-related reasons and it will be vital for organizations to deliberate how they plan to move forward with exception requests.
Moreover, the pandemic has made safety and cleanliness top of mind for returning employees. Businesses will have to keep in mind the procedures they need to put in place to satisfy OSHA’s general duty clause to keep the workplace safe as employees return.
The Impact of the Great Resignation on Employer Compliance
Along with shifting workforces, employers are managing the impacts of the Great Resignation — which saw a record 4.5 million Americans leave their jobs in December 2021, according to the U.S. Bureau of Labor Statistics.
The effect of the Great Resignation on the onboarding process
While workers continue to leave their places of employment, a 2021 survey from Bankrate found 55% of employees are looking for a new job. However, these high turnover rates leading to subsequent hiring are putting additional strain and priority on employer onboarding. To reduce turnover and optimize the onboarding process, it’s paramount for organizations to have the proper tools, workflows and programs in place. High-touch employee onboarding ensures new hires are engaged and can lead to long-term loyalty when companies need it most.
In terms of compliance throughout the onboarding process, employers must ensure they are managing state compliance and regulation requirements when working with remote employees. This also involves the need to focus on proper tax withholding. Because these requirements can vary from state to state, it’s up to employers to guarantee standards and compliance are being followed when managing a remote workforce.
Employment Labor Law and Regulatory Changes To Pay Attention to in 2022
Companies are trying to stay compliant, but it can be difficult with rapid yearly changes — especially as employees progressively migrate to different states or work remotely. As the year continues, it’s beneficial for employers to be aware of the employment labor law and regulatory changes to pay attention to moving forward.
The National Labor Relations Board (NLRB) is expected to continue to focus on overly broad policies that do not infringe on employees’ section 7 rights under the National Labor Relations Act (NLRA). These NLRB practices, coupled with ensuring your policies are compliant with state law, can be a big issue this year if not managed properly. Wage and hour compliance will also continue to be a hot button issue with changes to federal and state laws. This means employers must pay close attention to any modifications that come about to guarantee compliance is maintained.
Unemployment fraud cases continue to challenge employers
While organizations manage labor law and regulatory changes, it will be equally important to focus on mitigating unemployment fraud. Unemployment fraud cases continue to be on the rise, which is resulting in overpaying for claims and insolvency for some states — and this will ultimately lead to paying higher rates when you file for your IRS Form 940. Employers can take action by confirming an employee’s status, maintaining records, monitoring unemployment claims and notifying the state if any discrepancies are identified.
Navigating uncertainties and changes in the business environment has certainly posed challenges for employers in recent years — especially in terms of compliance. However, obligations to comply with federal and state laws inevitably fall on the employer, and it will be crucial to take the proper steps to ensure your organization is maintaining compliance as these changes and trends continue.