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How do you get owners to implement change to ensure labor law compliance?
As an outsourced HR Manager for small business often times when I begin working with owners I find they are truly out of compliance with wage and hour law, any thoughts on how to encourage change?
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4 Answers
Peggy,
What I usually try to do is present it as a risk management scenario. I explain to them what the potential costs on continuing non compliance are in terms of fines, interference, bad publicity, etc.
Depending upon what the issue is I have also told clients that a significant known violation prevents me from working with them or comtinuing to work with them.
I don't mind educating a client or helping them become compliant. I won't continue a relationship with a client who knowlingly operates in a way that is unethical or in violation of the law.
Share business impact with them (EEO, DOL, OFCCP court settlements) as well ever increasing inspection/investigation levels by the Federal government. These are very tangible, real-life scenarios. I also agree unequivocally with Mark about "not" doing business with knowingly illegal operations i.e. unwilling to be in compliance.
As a consultant, also from the HR Outsourcing sector, I build a business case that shows the risks and costs of non-compliance. It covers the fact that any agency that audits them and finds non-compliance can advise other agencies, which may then audit the Company in other areas. In my experience, Employer's generally come around when faced with the hard facts of State and federal non-compliance, esp those utilizing a large number of subcontractors (1099s). As one example where I audited a 35 person mom-and-pop contractor, I found approx $500k in possible fines/penalties/fees as well as mis-classification of workers causing them not to be paid overtime. This cost alone was over $140k over a 12 month period. I hope this helps........Michael
I also advise the Employer of actions the State and federal governments have recently hired hundreds more auditors and targeted their focus. Such federal depts include Homeland Security, Treasury, Dept of Labor, IRS. Cost-wise it just isn't worth the risk--it must be mitigated.
Similar to what all of you have said, I try to educate them in areas of non-compliance and the risk they run of continuing to manage their business in this way. I agree with Mark in that if the client thinks he or she will take the risk after I've given them examples of potential fines, injuries or complaints to external sources (from their employees to Employment Standards or Human Rights) and they just want my help with project a or b (as an example) I turn them down. My goal is to create healthy employment relationships and if an employer fails to comply with even the basic requirements, I would rather not be connected to them. In saying this, it may be that we structure a plan by which I can start on the specific project I was called in for, and then continue to work with them in order to correct some of their deficiencies. If they are willing to do that, then I would continue to work with them knowing they are on the right track.
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