By now, you’ve heard of the massive workplace transition many are calling the Great Resignation or the Big Quit. This “professional pandemic” is affecting millions of employees and employers across the country. The demand for workers remains high but the availability of skilled laborers—especially in tech—is low. With greater competition for candidates with the skills needed to successfully run an organization, the Great Resignation is creating a tough hiring landscape for HR managers virtually everywhere.
With headwinds like these, dealing with compliance violations isn’t a time cost your organization can afford. Being aware of and compliant with fair labor practices is essential to keep your organization on good legal footing so you can continue providing a great working experience for your employees.
The conversation around President Biden’s Build Back Better bill (BBB) has sparked renewed interest in the Fair Labor Standards Act (FLSA). The BBB framework’s objectives are to “[s]et the United States on course to meet its climate goals, create millions of good-paying jobs, enable more Americans to join and remain in the labor force, and grow our economy from the bottom up and the middle out.”
Time will tell what the results of the BBB plan will be. In the meantime, fair labor policies are still having an impact on many organizations. We dove into how the FLSA is affecting the workplace and what companies can do to adjust.
How Fair Labor Impacts Employee Experience
First, for clarity, let’s define what “fair labor” means and why it matters in today’s climate. The United States Congress establishes labor laws to protect the interests and well-being of employers and employees. The federal FLSA establishes duties for private and public employers for paying their workers and ensures the protection of workers’ rights so that employees are compensated fairly for their time.
Many state and local governments, however, have their own labor standards to support or enhance the FLSA. Depending on where your employees live and work, these state labor standards may include higher wage requirements, more stringent overtime rules, and different child labor regulations.
What does this mean for employers? With remote work becoming increasingly common, employers and HR managers need to approach their fair labor practices in ways that accommodate different state and local laws. As a result, a new component of the employee experience is staying up-to-date on how fair labor affects employees in different states.
New Penalties Employers Need to Know
The National Labor Relations Act (NLRA) enacted by Congress in 1935 also influences fair labor best practices. The NLRA’s aim is to protect the rights of employees and employers, to encourage collective bargaining, and to curtail certain labor practices that can harm the general welfare of workers, businesses, and the U.S. economy.
Some examples of violations of the NLRA are:
- Threatening employees with loss of jobs or benefits if they join or vote for a union or engage in protected concerted activity.
- Threatening to close the plant if employees select a union to represent them.
- Promising benefits to employees to discourage their union support.
- Transferring, laying off, terminating, assigning employees more difficult work tasks, or otherwise punishing employees because they engaged in union or protected concerted activity.
President Biden’s Build Back Better bill includes heavy new penalties for employer violations of the NLRA. BBB would add new civil penalties, in the form of fines, in addition to the traditional infractions. Under the bill, any unfair labor practice (ULP) violation by an employer would result in an additional penalty, up to $50,000 for each violation.
In addition, the bill would add conditions for personal liability. Personal liability has never been part of the NLRA, so this is an unprecedented move. The bill still faces hurdles on its way through Congress, but companies should be prepared to make adjustments if the plan passes.
What should employers do?
Regardless of whether BBB passes, this wouldn’t be the first nor the last time we’ll see labor laws change. So, what should employers do about it now, and what sort of fair labor practices should you implement?
We recommend completing an FLSA compliance audit. Organizations should conduct an internal fair labor audit once a year to ensure they are compliant, especially with the increase in remote employees. The audit should include a review of your organization’s policies, procedures, and documentation and make sure items such as payroll, employee hours and wages, and any necessary exemption statuses are all in good standing.
Keep in mind that a comprehensive audit will need to include policies for contractors and non-employees, recordkeeping, and overtime exemptions if they apply.
Do Better than Fair Employment
While fair labor practices help ensure fairness for employees while keeping the organization out of legal trouble, they aren’t the only considerations for supporting employees. For employees to have the kind of experience that entices them to stay with you in spite of a competitive talent market, you’ll need to treat them as your organization’s most valuable resource.
