Synergisity Consulting Training & Development LLC can guide your business to best practices that will aid your organization in defending against costly errors.
US Dept. of Labor postings, Fair Labor Standards Act Guidelines, overtime, and local minimum wage compliance, FMLA compliance, record keeping and retention requirements can be overwhelming. Missteps can cost your business anywhere from a few hundred to tens of thousands of dollars. It is not unusual for even the most conscientious employer to make mistakes that can cost thousands of dollars of back pay or fines in the event of an audit.
Depending on the state your business is located, an employer with one employee has no less than 20 federal and state labor laws to take into consideration. As your business’s employee head count increases to 10, 15, 20, 50 and 100+ the labor laws to ensure compliance with increase with your total number of employees.
No one expects to be audited. Are you ready if a Department of Labor (“DOL”), Immigration and Customs Enforcement (“ICE”) or other governmental compliance agency auditor comes knocking on your door? Are you able to readily produce all the requested documents, sometimes in as little as three days? Did you know that fines for failing to have required postings alone can range from $110 up to $17,000, depending on the missing posting? Such oversights with DOL postings, recordkeeping, and ICE compliance can result in catastrophic penalties to your business.
Experts speculate that DOL and ICE will increase investigations with a new fervor once the Covid-19 threat diminishes in 2021. During fiscal year 2020, the Wage and Hour Division (“WHD”) averaged back pay in the amount of $706,000 per day or an average of $1,125 per employee per day for overtime violations and misclassification of salary exempt staff. Immigration and Customs Enforcement (“ICE”) has elevated their I-9 investigations over 340% in the past several years, and workplace enforcement has nearly quadrupled in an effort to create a culture of compliance among employers. Violations cited by WHD can range from $2,014 per person per occurrence, with some violations as high as $10,000. ICE violations involving I-9 errors or oversights can be as high as $2,292 per violation. An organization can be fined up to $75,000 for their first Americans with Disabilities Act Amendment Act (“ADAAA”) violation. ADAAA-related lawsuits cost an employer more than fines, especially when negligence and/or harm can be proven.
According to a study by Insurance Journal, about one in five small to mid-size organizations will face employment charges. Claims can turn into expensive lawsuits, with the average charge costing around $125,000, including attorney’s fees and settlements.
The aforementioned citations are a brief sampling of unexpected costs your business could face for simple oversights or missteps. An internal compliance audit plays a key role in establishing a good faith defense to mitigate or avoid penalties in the event of an official audit to mitigate or avoid penalties.
Contact Synergisity today to learn more about hidden risks threatening your business’s bottom line.