If you work in HR or payroll, by now you have probably heard about the FLSA overtime rule changes, taking effect December 1, 2016. Over the next few months employers must review, analyze, prepare and reclassify employees to ensure they’re prepared—and avoid penalties. The potential costs and impact of non-compliance greatly exceed the costs of complying with the new regulations.
Why do you need to understand this change?
President Obama and Department of Labor Secretary Perez recently announced the U.S. Department of Labor’s final decision on overtime rules which includes doubling the salary floor for exempt employees from $455 per week to $913 per week. This means that millions of additional workers—an estimated 4.2 million— may now qualify for FLSA overtime protection.
What’s the impact?
Under the new rules, you’ll need to track hours worked each week by employees who fall below a weekly salary level of $913. This represents a significant shift: many employees who previously did not track their hours will need to interact with your time and attendance systems. They’ll probably need training on the new systems and procedures as well. The changes are right around the corner and your operations and payroll personnel have limited time to prepare.
Will you be ready?
Take steps to ensure your organization complies with the new law come December 1, 2016. Workforce management solutions can play a critical role in helping your business minimize compliance risk during this type of change. Ideally, a system should facilitate legislative changes and allow you to implement policy and regulatory requirements simply and accurately—unified with robust time and absence management capabilities to support the changes in the workplace.
To help you learn more, SumTotal is hosting a complimentary webinar featuring legal experts from Baker Donelson to guide you through the upcoming changes. Reserve your space for this live session on August 3, Navigating FLSA Compliance to Minimize Risk.
Let’s face it – managing and maintaining compliance can be daunting. With employment lawsuits increasing by more than 400% over the last 14 years, it’s clear that maintaining compliance and avoiding legal ramifications is a rapidly growing business challenge.
Organizations are scrambling to stay up-to-date with ever-changing laws and regulations. If you don’t know where to start, you’re not alone.
Sixty eight percent¹ of organizations admit they were caught off guard by an operational surprise.
To avoid unwanted surprises, here are 7 building blocks of a successful compliance program:
- Create a culture of compliance. Above all else, creating an organizational culture of compliance is paramount. A corporate commitment to high ethical standards must start from the top. If upper-level management is already focused on creating a culture of compliance, fantastic – but make sure that communication is fluid and goals are aligned. If upper-level management isn’t focused on compliance, initiate the conversation. Get consensus on compliance priorities and goals and encourage a call to action to align all management levels and departments. Meeting always-changing global regulations requires change, and management must proactively and strategically embrace change. Collaboration and communication is the first step to establishing an effective compliance program that lives and breathes throughout all lines of the business.
- Learning as the foundation for compliance behavior. If employees are not aware of existing policies and regulations, how are they expected to be aware of new or updated policies and regulations? How can they serve customers in good faith? When it comes to compliance, ignorance isn’t bliss. Achieving compliance requires you to identify who does and does not know, and who needs training on specific material. Training programs are the core of any good compliance solution. Having a corporate platform such as a learning management system (LMS) will not only simplify and facilitate training management; it will make HR processes and reporting more efficient with comprehensive reports of training completions and exception documentation. Online training options improve efficiency by making it easy for employees to gain new knowledge while spending less time away from work.
- Align corporate and individual goals. There is no use setting goals if they are not aligned across the organization, and compliance goals are no exception. Goals must be disseminated from executive leadership down to each individual. Let’s use this hypothetical situation. An organization’s corporate goal is to increase “compliance adherence” across all departments. Middle management’s responsibility is to interpret and set a department goal to achieve compliance within 6 weeks of notification. Each department goal is then broken down and managed at the individual level. Ex: Sales reps will attend 10 hours per month on required compliance training. The most effective and efficient way to manage this is by integrating your talent management system with your learning management system. This gives you the ability to automate goal management, as well as other performance initiatives, and automatically assign goal based required training and track completions. Integration and automation removes manually processes that eats up so much HR time and ensures that multi-levels of management and employees receive the training needed to satisfy the goal.
- Modern content strategy. As the saying goes, content is king. Relevant, important and engaging content has a big impact. Rather than bore your workforce with traditional, outdated training classes, engage them with a variety of materials, from video tutorials to interactive games to social collaboration. Be sure access is as easy and content is in the right form. Will users be able to complete training or read required information on mobile devices? Will the LMS run on the browsers and operating systems your people use? Make sure the content itself supports those various delivery methods – otherwise you’re going to run into trouble.
- Just in time learning. Innovative organizations are committed to delivering training content in context when and where the user needs it. Let’s use a financial firm for this example. A manager is informed by the chief compliance officer (CCO) that there has been an amendment to an existing regulation that must be acted upon immediately. After a joint review, the manager understands how to effectively change current corporate policies and procedures in order to become compliant. The CCO contacts the appropriate person to update corporate policy and issue procedure documentation, while the manager simultaneously holds a “lunch and learn” meeting to update direct reports on the recent change. This ad-hoc meeting can then be managed in the LMS, individual completions tracked, and proof of compliance is available if needed for an audit.
- Easy to Use Interface. A positive user experience goes a long way. It may seem simple and overlooked, but a difficult interface results in low completion rates. Why? Because if it is too cumbersome to log in or navigate, then employees give up until the next free moment. And how often do free moments present themselves during business hours? Rarely, right? Therefore, easy to access and easy to use interfaces will increase timely participation and the results you want: high training completion rates and employees empowered to be compliant.
- Complete visibility. Transparency is critical to maintaining compliance. Visibility into ongoing activities, training assignments and re-certifications helps organizations be proactive, rather than reactive, to potential audits. Part of a successful compliance program is assessing how well your training is working. For HR leaders, robust reports will measure the impact of compliance training, what is working and what isn’t, and provide the information needed to take immediate action to adjust strategy and tactics as needed. Results are measured against key performance indicators (KPI) to evaluate the success of the investment in compliance programs.
A lot of understanding, planning and communication go into establishing a successful compliance program. I hope these 7 suggestions are helpful starting or expanding your own compliance program. With the right commitment, communication and tools in place you can build a culture of compliance and the confidence that your organization will be ready if the auditors come knocking.
If you’re serious about compliance and looking for more information, download our eBook, HR Audit Essentials: 8 Tips to Being Audit-Ready.
Do you have any other suggestions to add? Feel free to leave a comment below.
¹Source: Beasley, Branson, and Hancock
As global company, we always look at global news and how it will impact our customers. We recently had a breakfast in Paris with our customers and discussed new reforms French government will put in place effective January 2015.
Do you know France currently spends €32 billion Euros ($43 billion USD) each year on job training? The majority of this money is spent to train existing employees. Critics say too little is allocated to the unemployed who are most in need of new professional skills. Is this fair, or is it hindering growth of new talent?
Before we look further, let’s take a quick history lesson to understand the development of French training laws and reform:
- French trade unions and employers pass the National Intersectoral Agreement (ANI – l’accord national interprofessionel) creating Formation Professionnelle, the current vocational training program, covering training rights of employees who are dismissed or working in sectors which face economic difficulties.
- Delor’s Law passes. Training develops as a means for personal development and social promotion, rather than a means to onboard new employees.
- Training policy evolves and becomes a tool for French government to fight youth unemployment.
- Job security issues arise.
- French government starts to discuss individual training rights.
- Government implements Knowledge Validation Process (Validation des Acquis et des Expériences) to improve work experience recognition.
- French Government passes the Individual Right for Training (Droit Individuel à la Formation). The law provides 20 hours of training per year, accumulated over 6 years and partly transferable. Part of the training may take place outside of working hours , limited to 80 hours per year, paid at 50% of net earnings.
- The Personal Training Account (Compte personnel de formation) replaces the Individual Right for Training and provides secure learning throughout the working life.
- Simplified rules to help finance training (percentage of payroll).
- Employees must develop skills and enhance their professional development through a cycle of interviews, assessments, and competency recognition.
- Boost the competitiveness of organizations thanks to better trained people and right competencies.
- Strengthening business negotiation and the role of representative institutions
What does all this mean for the French workforce?
Training has moved from an “obligation to pay” to an “obligation to act,” initiative for organizations to provide training solutions for their employees. Organizations will welcome a more competitive workforce thanks to better trained individuals with appropriate competencies building a more competitive market for employment.
Organizations balance company strategy, business challenges, and needs of employees. Training managers will need to find innovative solutions and tools best suited to answer this multiple faceted challenge.
Training managers will see their roles evolve. Training will be viewed as a strategic situation within organizations and training managers will become an integral part of this strategy.
Employees will take control of their learning activity, guaranteeing that received training will be carefully chosen and targeted to help them grow in their role. They will receive access to a wider variety of training, delivered in a more easy and friendly way (out of work time for example). Their training activity will be tracked by HR, who will meet with employees every two years to review training followed, and future needs with a legal appraisal every six years.
After reviewing the history behind French training reform, it is clear that the new laws are a great opportunity for many French organizations. Learning is now core to employment and talent in France, as the basis for a broader opportunity for growth.
The arrival of Hurricane Arthur over the holiday weekend was a quick reminder of what it’s like to be underprepared. Whether it is a warm summer rain or an enormous hurricane, being caught off guard by a storm in your professional or personal life is always surprising.
Organizations are often blindsided by change, and one of the biggest culprits is compliance. Many organizations would spiral out of control in the event of an audit. In fact, 68% of organizations admit they were caught off guard by a compliance surprise.¹
Let’s face it. When summer rolls around, most folks are looking to cash in on their PTO banks and take some well-earned time off. And good organizations know that giving their employees vacation time pays off.
A CCH Human Resources Management study demonstrated that more than 50% of employees feel more “rested, rejuvenated and reconnected to their personal life” and that nearly 40% of workers “feel more productive and better about their job” when returning from vacation. Continue reading
Organizations take risk management seriously, but budgets are tight. The competing demands for limited resources mean some things make into the budget and others don’t – maybe next year. Compliance solutions often fall into the “maybe next year” bucket because things have been working OK so far, right?
Not to scare you – ok, maybe a little – but consider these interesting nuggets: