3 Tips for a New Year and New Presidential Administration

As HR professionals and employers ring in a new year and prepare for a new presidential administration, HBL offers you the following three strategies to optimize your legal risk management infrastructure in the coming year.

https://www.youtube.com/watch?v=hnERC1x1rVo

Tip #1: Develop a strategy to audit pay equity and address unintentional disparities.

Because most companies generally maintain a neutral pay policy or practice, pay equity is often a hidden liability trap. Unintentionally, pay equity violations may result from, for example, the priorities of a prior management’s recruiting initiative or from recruiting during a financial downturn.

A comprehensive pay equity audit will alert your company to potential issues outside of the context of an agency investigation or litigation. To protect the company from having its good intentions backfire, you may collaborate with outside counsel to develop a communications strategy based in the attorney client privilege. While we cannot guarantee absolute protection under all circumstances, a skilled attorney can structure your pay equity audit for maximum confidentiality protections.

Tip #2: Conduct an internal investigation of your “exempt” employee statuses.

Although an employee compliant is the most common reason for a Department of Labor (DOL) audit, the DOL may generally audit employers at any time. Based on the known priorities of the Biden administration, employers may expect an increase in DOL enforcement efforts, including audits. For proactive preparation, an internal audit is one of the best risk management tools at an employer’s disposal.

For an effective audit, the “exempt” classification is a great place to start. Particularly for growing companies, it is entirely too common for salaried employees to be classified as “exempt” without considering the broader legal implications for the “exempt” payroll status. To start the new year off right, you may want to consider investigating employee payroll statues, in connection with employees’ job duties and regular weekly pay, to determine whether payroll classifications are appropriate.

Tip #3: Reevaluate noncompete agreements.

Understandably, many employers do not consider the strength of their noncompete agreements until a former employee presents a challenge. Under most states’ laws, employers may be out of luck if the agreement is either missing key terms or the agreement limits litigation options to, for example, arbitration only. Particularly if your business is service-oriented, the best advice is to invest in a solid noncompete agreement and frequently review your agreement with a skilled employment attorney.

BONUS TIP: Prepare for a changing landscape.

HR professionals, employers, and the attorneys who support you will need to remain alert to anticipated regulatory changes. For example, the DOL’s new independent contractor rule could still be changed or even completely overhauled by the incoming administration.

Stay tuned and buckle up!

If you have any questions about the above, please contact Hall Benefits Law. We would love to hear from you, and the HBL team looks forward to serving as your legal risk management partner!
Keely Collins may be reached directly at 470-217-0167
kcollins@hallbenefitslaw.com

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.