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How to Navigate HR Compliance With An International Workforce

Maintaining compliance in an ever-shifting, increasingly globalized world has its own peculiar challenges which will only grow more complex as time marches on. By understanding these top challenges, you can better situate yourself to take advantage of the opportunities they bring with them.

New Market Compliance 

A 2016 study concluded that “87% of U.S. companies believe international expansion is a necessity for long-term growth.”

The Covid pandemic may have highlighted issues associated with increased globalization, but it also underlined its inevitability. We are more aware of the global supply chain than ever before, and practically anyone can interact with it in meaningful ways through the internet.

And with each new territory with which your business interacts there are a bevy of new laws and regulations – and the onus is on you, the owner, to successfully navigate them.

Tax calculations and regulations are documented in native languages, and the regulations surrounding labor vary widely within foreign markets. For instance, in Mexico, new hires must be registered with the government within a five-day window whereas in Spain such registration must be completed before employment begins.

Violations in this realm can incur immense costs.

While on-the-ground support is clearly the best scenario, it might not be scalable for your enterprise. Couple that with the rapidity with which businesses are expected to grow, and even the most experienced HR departments can feel the strain in grappling with international compliance.

Payroll Compliance

While international compliance poses some obvious challenges, domestic compliance has issues all its own. Different regions and municipalities have their own laws which are being continually updated. Failure to comply with these tax deadlines can result in massive penalties and fines.

So how do you know where to focus your attention? The stakes with payroll compliance are high, and the particularities of the provinces vary.

Uruguay, Argentina, and Chile require employee signatures of pay-slips upon receipt. Overlooking this would leave you open to lawsuits for lost wages.

Italy requires an Italian bank account to pay monthly statutory tax returns. Ignorance of this fact would lead to a massive headache on the due date.

However, the legal aspect of compliance is just half the battle. Compliance failures can erode workforce morale in spectacularly short order. How long can an employee be expected to wait for their wages? A few hours? Days? Your reputation is at stake if you miscalculate.

One survey showed that 49% of American workers will be looking for a new job after just two payroll errors. Now you’re increasing recruitment allocations to fill existing positions.

Benefits

International benefits policy requires careful consideration.

First, acquaint yourself with the statutory requirements in each country. Bonus points if you’re fluent in the local language as many governments will detail these statutory minimums on their websites

Here is a prime opportunity to consider your current spending on benefits. Though the U.S. requires substantial coverage from large employers, most countries have some degree of state-provided healthcare coverage. Thus, offering prime, private health insurance to global workers may prove redundant and costly.

The demographics of your workforce can also significantly shift your benefits calculus. A senior director in the U.K. may need supplemental private healthcare for their family, whereas a single salesperson in France might opt for reduced healthcare coverage and opt instead for a richer profit-sharing package.

While gender inequality dominates the headlines, so too does the definition of family and the practice of family leave. 

The U.S. design of shared parental leave is markedly different from the 52 weeks shared between parents in Denmark. Considering these differences complicates more than the compliance itself, it also complicates the allocations of resources in response to cultural relationships to regulations. 

Liability Insurance

The liability insurance you provide your employees will vary from country to country. Most have different schedules of resources for such insurance. However, many global organizations have begun adopting private insurance protections even in nations with established plans. This does more than appease legal responsibilities, it also addresses ethical responsibilities.

An organization’s culture should promote the well-being of everyone involved, regardless of their geographic location. Assessing insurance liabilities is a basic way to address the effectiveness of your employee protections.

Termination Policies and Practices

There are only two certainties: death and taxes. With a particular lens, terminations can fall into both categories.

Incorrectly managed terminations can be unpleasant for all parties involved.

“At-will employment” exists only within the U.S., a streamlined termination function that is not to be found elsewhere around the world. Therefore, when considering terminations abroad, there are a multitude of procedures and processes that must be adhered to if you’re to maintain compliance.

Theft or other criminal acts are simpler to navigate during termination regardless of the geography. Laws are effective guidelines for proper behavior. The difficulty comes in issues tethered to employee performance or disagreements. Different places have different requirements for legal termination of employees based on performance. Most will require documentation and evidence, and in some places, it can take up to a full year to legally terminate an employee.

There are instances where a justification can be made, but there are still notice periods and severance pay mandates that require proper attention.

Retirement and Pension Plans

The U.S. workforce is aging rapidly. While the covid pandemic coaxed some people to accept retirement, Gen Xers and Baby Boomers still make up 58% of the workforce. With this concentration of older workers comes interesting resource planning – the pensions for an anticipated exodus.

There are no hard and fast international rules about retirement age, it is useful to consider how different countries approach retirement. France allows workers to claim retirement after reaching the age of 62, but who may also gain a higher pension by working to the full-rate retirement age of 67. The U.K. recently rewrote pension laws to require employers to contribute at least 3% into an employee’s private pension scheme.

This reflects a growing global trend – statutory requirements of private businesses to allocate resources to employee pension funds.

Global HR compliance is unavoidably challenging and complex. However, by facing it head-on, business owners may be able to take the advantages presented by shifting global sentiments, winning victories for themselves and for their increasingly global workforces.

Launchways is here to support you and help you navigate international workforce compliance issues.

The Important Role Employee Benefits Play In Your Overall DEI Strategy

The importance of workplace diversity, equity, and inclusion (DEI) has made steady progress over the last few decades, but 2021 was the year where many employers finally made DEI a priority in their organization. An enormous undertaking for even a modestly sized company, these initiatives require challenging introspection and analysis regarding topics like strategic goals, hiring practices, workplace environment, and yes, benefit offerings. 

It is impractical to expect every company aiming to improve on DEI measures to succeed in a matter of just one or two years. For many, this is a transition that will take much longer to come to fruition in a meaningful and measurable way. While enthusiasm should be applauded, trying to bite off too much in too short of a space of time can be overwhelming and ultimately does a disservice to the importance of the project. Breaking this process down into smaller, more manageable goals is a far better strategy than tackling the entire thing at once and then becoming discouraged when results do not meet expectations. 

A great place to get started on this journey is with the single largest non-salary employee expense: healthcare. In order to truly achieve a more equitable workplace, where inclusive benefit offerings lead to improved health outcomes, plans need to be tailored to the individual needs of all employees. 

What does healthcare discrimination look like?

Understanding inequities in the healthcare system begins with examining the underlying factors that impact health outcomes, known as the social determinants of health (SDOH). SDOH encompasses aspects of a person’s environment that have a major impact on their health, wellbeing, and quality of life. The unfortunate reality is that differences in socioeconomic status, geographic location, and racial background often result in substantial disparities in health outcomes. For example: if people don’t have access to grocery stores with healthy foods, they are less likely to have good nutrition, increasing their risk for a variety of health conditions like obesity, heart disease, and diabetes.

How are employees affected by discrimination in the health care system? 

Employees can be left vulnerable to increased health risks either by lack of access to quality health care or by lack of adequate education about the resources that are available to them. Data from a recent Harris Poll survey of more than 2,000 adult Americans showed that 54% have delayed care in the past year due to cost. The 2020 Health Insurance Literacy Study from Policy Genius found that only 32% of Americans can define the terms deductible, copay, and premium. Whatever the cause, many employees lack the resources necessary to take care of their physical and mental well-being, which could potentially result in long-term health issues. 

How can employers make the health care system more equitable?

Recognizing that there is no universal strategy to improving employee well-being allows you to diagnose the specific gaps and obstacles that your employees experience in their access to healthcare. The importance of personalizing clinical and wellness offerings to the needs of the individual is a factor that is often overlooked when administering healthcare benefits. That being said, here are some common barriers and strategies to address:

  • Add wellness programs to your overall benefits package that take into consideration how your employees’ diverse backgrounds and experiences impact their health. Wellness subsidization has the dual benefit of promoting healthy behavior while also lowering the employee’s financial burden. 
  • Ensure your health plan uses clear and accessible language. 36% of Americans making less than $75,000 annually reported that they have avoided care due to uncertainty over what their health insurance covered. Inaccessible language can prevent even the most carefully designed benefit package from providing equitable healthcare access. 
  • Provide first-dollar coverage and improved cost certainty. High prices, lack of cost certainty, and high deductibles are the most commonly cited reasons for skipping or postponing medical care. 44% of American adults don’t have $400 in savings, leading to a disproportionate impact on lower-income individuals and families. 

In a recent survey, 7 in 10 employers said that they plan to bolster DEI-related aspects of their benefit packages in the next few years. While most organizations have their employees’ wellbeing in mind, few are truly aware of how these decisions impact their overall health. These investments are also good for the bottom line, as the fewer medical procedures and doctor visits your employees require, the fewer claims are submitted. A survey from Monster indicated that 86% of job candidates say DEI initiatives in the workplace are important to them, demonstrating the impact these programs can have on recruitment and retention. 

From personalized benefit offerings to proper benefits education and improved cost certainty, there are many options available for employers to work toward providing equitable health plans. This is an important project that will likely take years to bring to fruition, but it is the right thing to do not only for your employees but also for your organization itself, and it is never too early to get started.

Compliance Best Practices for Human Resources

Human Resource managers are vital to the success of an organization. They communicate with every level of an organization and consistently impact business activities – from recruitment and retention to continued training and compliance.

While HR is primarily concerned with the “human” aspect of a company, it is also necessarily interested in the ways team members relate with organizational, state, and federal regulations which govern the business’ operations.

Navigating these requirements is a complex undertaking often relegated to legal entities and compliance committees. But because of the wide-reaching applications of regulations, HR is particularly well-suited to positively affect compliance outcomes.

Effective compliance begins with people, policies, training, and communication, which is exactly what HR deals with daily.

HR’s Role in Compliance

Successful compliance begins and ends with the functions of Human Resources

So, what is it?

HR Compliance is the process of defining and implementing policies concerning current laws and regulations. From there, it is the insurance that employees acknowledge, understand, and comply with these policies.

While it might deal primarily with employment laws, most compliance regulations revolve around people’s behaviors.

Crucial in Corporate Compliance 

HR managers are a protecting force against the wide and varied threats to doing business. Beyond safeguarding employees through adherence to federal law, they also spearhead company efforts to mitigate risk at every turn.

HR is a far-reaching department, and thus communicates with employees at every level. Being responsible for hiring and training makes HR the best place to be for building an organizational culture of compliance.

Common Issues:

HR’s compliance management generally falls into three common categories:

1) Employment Law: This is the acronym department, featuring laws and regulations that apply specifically to Human Resources which include Family Medical and Leave Act (FMLA), hour and wage laws (Fair Labor Standards Act), anti-discrimination laws [Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act, Age Discrimination in Employment Act (ADEA)], and anti-harassment laws.

2) Employee Health and Safety (OSHA): While having traditionally covered hazards, HR has recently played a larger role in employee health and wellness. Research continues to show the benefits of healthy employees, resulting largely in higher rates of productivity, reduced benefits costs, and fewer sick days.

3) Hiring/ Firing Processes: While traditionally focused on labor relations and unions, this now includes a greater focus on immigration laws. Severing relationships with employees in such a way that does not invite problems or lawsuits have long been a primary function of HR.

Implementation of HR Compliance Best Practices

With the multitude of functions carried out by HR departments, how might HR managers most directly influence their company’s compliance efforts?

Let the Right Ones In

In other words, “hire the right people.” This is perhaps the most obvious answer to the question, but it is the most significant challenge in growing a business. But how do you define what the right person for the job looks like?

 There are multiple laws and regulations regarding onboarding, from the Fair Labor Standards Act to minimum wage and overtime rules. The ADA protects against disability discrimination, and the Age Discrimination in Employment Act protects those over 40 from similar discrimination. Thus, it is important to understand what regulations surround the onboarding process. 

Beyond legal considerations, another primary concern for HR is bringing in recruits who pose the least risk regarding continued HR compliance. Ethical red flags from previous employers can be multiplied in high-liability industries or roles.

The entire recruiting/hiring/onboarding process is in the purview of HR and sets a tone for an employee’s career at a company. It exerts a major influence on overall workplace culture, and culture is an effective measure of a company’s compliance.

Consistently Update Employee Handbook and Policies

There are a wide array of approaches to handbooks and individual policies. Some companies use a single handbook for the entire enterprise, others opt for department or individual-specific policies. Whatever the preferred method, HR usually has a hand in the writing and conveyance of these policies.

All too often these policies are thoughtfully created, then cast aside and neglected in day-to-day operations. In practice, they should be living documents, constantly adapting and changing. While the core might remain the same, the details will shift. When framed this way, these policy guidelines can have a real impact on an organization. Effective management should change and grow with regulations to ensure continued compliance

Regular reviews and revisions of policies come to nothing, however, if they are not shared with and lived by the teams they directly impact.

The Necessity of Two-Way Communication

Of course, communicating these constantly shifting expectations and policies can be points of friction. Impressing the importance of new policies is one thing, but making them resonant in day-to-day interactions can be another thing entirely.

This is where communicative leadership is vital. Consistent, clear communication from leadership will help increase employee buy-in and convey a sense of top-to-bottom accountability. Still, effective communication from leadership is only one facet.

Communication must also flow honestly and unimpeded from employees to leadership. Some employees may be able to address concerns with management directly, but others may prefer a less direct avenue of recourse. An anonymous whistleblower hotline is a fine example of a formal mechanism that solves this problem. But it cannot function without the informal aspect of HR and their willingness to hear individual concerns. Safety and processes need constant attention, and so addressing issues surrounding these concerns must be done promptly and effectively. If left unchecked, trust begins to erode between employee and employer.

Transparent communication is one of the highest goals for an organization. A hazard-free flow of communication with administrative bodies, as well as accountability in all offices has multiplying effects on regulatory compliance as well as workplace satisfaction. Win/win.

Train On Compliance Regularly

It is tempting to host one extravagant, day-long training on sexual harassment or diversity, have employees sign an attendance sheet, and leave it at that for another year. It seems simple and to the point, but if there is not a direct link to your company’s core values, this grand show might fall on deaf ears and blind eyes.

Instead, consider shorter, more personal online pieces of training that coincide with policy updates or general reviews.

Compliance should complement your core values. By personalizing messaging and making it a consistent pursuit, you increase the likelihood that your employees will internalize the training. Practicality and consistency are fundamental to this success.

In short, the integration of meaningful compliance training into your training schedule can have an immense impact on workplace culture; indeed, it should be a vital part of it.

Audit HR and Compliance Regularly

The other side of meaningful compliance training is the insurance of that training’s effectiveness. Enter the audit. Essentially, this is when HR teams look at hard data relating to regulations they interact with directly – dispute documentation, hiring processes, employee surveys, policy manuals, etc.

The aim is to diagnose issues before they turn into problems. It can shine a light on what is working, and what is not. Once a general landscape of current practices is illuminated, the organization can strategize ways to reach compliance, maintain it, or more effectively imbed it in their culture.

Of course, this type of audit requires a thorough understanding of applicable laws and industry best practices. It also comes with a non-insignificant time-cost alongside other day-to-day human resources compliance tasks. However, it is tremendously valuable in the continued legal successes of a business.

Get Started

Sounds good, right? What could be better than ensuring regulatory compliance and increasing a positive workplace culture at the same time? 

Then again, desire and action are not the same things. It can be taxing work, and oftentimes those most concerned with these issues are already wearing more than one hat in their organization. Luckily, there are steps you can take without attempting a full-fledged HR compliance audit yourself. You can educate yourself first. You can evaluate the state of your current HR policies and measure them alongside current regulations. You can seek third-party guidance through these issues. This is exactly what we do here at Launchways – we work alongside our clients to navigate the complexities of regulatory compliance. And we do much more than that too! Contact us to learn how else we can help.

OSHA’s COVID-19 Vaccine Mandate: What Employers Need to Know

On November 4th, 2021, OSHA released its high-anticipated emergency temporary standard (ETS), commonly referred to in the press as the vaccine mandate. The general aim of this new standard has been known for some time, but, with the specific details finally available, employers are rushing to ensure that they are prepared to meet its requirements. The foundational argument of the ETS is that OSHA considers COVID-19 infection to be a grave danger to employees, so they’re establishing minimum vaccination, testing, and face covering requirements to address this. 

Unsurprisingly, this new standard has been met with several legal challenges, but employers cannot afford to wait for an order from the court of appeals to begin preparing for compliance. Here’s what you need to know:

Key Deadlines

The ETS technically went into effect immediately upon its publication in the Federal Register on November 4th, however, enforcement of the standard doesn’t begin until December 6th, 2021. On that day, all provisions of the ETS come into effect except for the testing requirement (more on this below). The testing requirement will be enforced on January 4th, 60 days after publication. 

Which Employers are Impacted?

The standard applies to all U.S. employers with 100 or more employees. OSHA’s rationale for the 100-employee threshold is that larger employers “have the administrative capability to implement the standard’s requirements promptly” but are less confident that smaller employers can do so without disruption. This means that two-thirds of all private sector workers in the nation, including those working in the nation’s largest facilities where the deadliest outbreaks occur, will be better protected from infection. 

The only 100+ employee workplaces exempted from this policy are those already complying with one of two similar standards: 1) the Safer Federal Workforce Task Force COVID-19 Workplace Safety: Guidance for Federal Contractors and Subcontractors, or 2) the Healthcare Emergency Temporary Standard.

Some individual employees at these companies may be exempt, however. This includes employees that don’t report to a workplace where coworkers or customers are present, as well as employees who exclusively work from home or outdoors.

Employer Vaccination Policies

All employers are required to develop and implement a policy that either requires all existing and new employees to be fully vaccinated, or allows each employee to choose between vaccination or providing proof of weekly testing and wearing a face covering. 

Employers are also required to determine the vaccination status of every employee and keep “an acceptable proof of vaccination and roster of each employee’s vaccination status”. These records must be kept and considered as employee medical records for the time that the ETS is in effect. 

OSHA has provided sample policies on its website for reference. 

What Counts as “Acceptable Proof of Vaccination”?

Here is the list provided by OSHA:

  • Record of immunization from a health care provider or pharmacy
  • Copy of US CDC COVID-19 vaccination record card
  • Copy of medical records documenting the vaccination
  • Copy of immunization records from a public health, state, or tribal immunization information system
  • Copy of other official documentation containing type of vaccine, date(s) of administration, and name of health care professional or clinic administering the vaccine
  • Signed and dated attestation ONLY where employee has lost or is otherwise unable to produce other acceptable proof

What are the Requirements for Unvaccinated Employees?

Employers that opt to implement a policy with a testing option must require each non-exempt employee who is not fully vaccinated to (1) be tested at least once every 7 days, and (2) provide proof of test results to the employer no later than 7 days after they last provided a test result. 

In some instances, an employee might be away from the workplace for longer than a week, and they are not required to provide test results during that time. However, they must be tested within a week of returning to the workplace and must provide the results of that test upon return. 

Employer Support for Vaccination and Testing

The ETS requires employers to provide employees up to four hours of paid time off to receive each vaccination dose, as well as reasonable time and paid sick leave to recover from any side effects experienced. 

Under the ETS, employers are not, however, required to pay for any costs associated with testing, although they are not prohibited from doing so. 

Exemption from Testing

The only instance provided by the ETS where an unvaccinated non-exempt employee will actually be exempt from complying with their company’s testing policy would be if they test positive for COVID-19 or are positively diagnosed by a licensed health care provider. In that situation the employee would be exempt from regular testing for 90 days. 

Can State or Local Laws Overrule the ETS?

Barring a permanent injunction or Supreme Court ruling, the ETS is written specifically such that it preempts any state or local laws.

Do you know how many of your employees are struggling with caring for an aging parent? It’s probably more than you think

What if I told you that there is a hidden crisis affecting 1 in 5 Americans, causing millions to leave the workforce earlier than expected, hindering productivity, all while most employers remain out of touch with what is happening? That is precisely the conclusion of a report by Homethrive on the results of their 2021 survey investigating the impact and difficulties of employee caregiving. 

Employees are engaged in a precarious juggling act, balancing the pressures of work, finances, healthcare, childcare, and, for 53 million Americans, the care of their aging loved ones. As a culture we have come to tacitly accept that, fairly or not, the burden of elderly caregiving falls entirely upon the individual. As a result, affected employees are left to make an impossible choice between their career aspirations and being there for their loved ones when they need them the most. This is a problem that is expected to grow, as 72 million baby boomers approach the average age of an elderly care recipient at 70 years old.

Homethrive surveyed hundreds of adult caregivers to take a closer look at the impact this is having on their employment. While individual employees may always bear the brunt of the responsibility, companies are also suffering losses in productivity and higher turnover as a result. 43% of respondents said that they are distracted, worried, or focused on caregiving – and not their jobs – at least 5 hours each workweek, while 20% reported experiencing this for 9 hours or more each week. 1 in 3 reported that their supervisors had noticed an impact on their job performance either from changing work habits or from being noticeably stressed. Finding a way to support these caregivers is the compassionate thing to do, but it also makes a lot of business sense.

Perhaps the most surprising finding from Homethrive’s report was how out of touch employers seem to be in the face of this crisis. More than half of respondents said that their supervisor is not as supportive as needed regarding their outside-of-work caregiving responsibilities. One reason employers aren’t seeing the impact here is that they aren’t looking, as 40% reported that their supervisor wasn’t even aware of these additional obligations. 

Most employers care, they just need to do more to understand this need among their workforce and provide benefits that support them. While the vast majority of caregivers are receptive to the idea of their employer offering a benefit to help address this challenge, most companies are not yet offering anything in terms of resources, guidance, or support for caregiving. Choosing the right caregiver benefit should be near the top of the priority list when considering the “must-haves” in a modern benefits portfolio.

To learn more about the impact of elderly caregiving on employment, check out Homethrive’s report here.