So You Think Compliance Knowledge is not Important in HR... Well

In the ongoing debates in the HR blogsphere on the Death of HR ( Laurie Ruettimann, Mike Van Dervort and mine) there were a number of comments about necessary changes in the field to make it viable or more up-to-date. One of the areas mentioned with some regularity was that HR needed to get out of the compliance arena. Leave that to the lawyers the critics say.

My reaction?   BULLS**T!

To me, where the "rubber meets the road" * in HR is in Employee Relations. The interactions between employees and management. That is where great things get done and where major mistakes get made. And these mistakes center on violations of the laws, accidental or meant, it makes no difference. And because of this, in my opinion, HR people in ER need to know the laws. They have to be compliance people. This is different than attorneys knowing the law. No chapter and verse, court case quoting here. Just what is the law and how does it apply to my company. The practical application of the law. And there is alot of it.

And there is more coming. The Obama administration is trying to make its mark in labor and employment law. They have already passed the Lily Ledbetter Act and four presidential Executive Orders have been passed. AND there are THIRTEEN pieces of legislation pending mid-term. The one with the most press coverage is the Employee Free Choice Act (EFCA) but there are a dozen more. Here is the list of 2009 Mid-Term Federal Legislation pending. Thanks to the folks at World at Work and blog buddy Eric B. Meyer for the heads up.

* To my non-American readers click the link for a definition of this idiom.

Follow Up on Non-Discretionary Bonuses

In my post yesterday, Getting Punished for Doing Good, about QuikTrip's fine at the hands of the USDOL for not calculating non-discretionary bonus into overtime for nonexempt employees I was asked on Twitter if that included non-cash bonuses. Well I was not sure, though I suspected it might if it was production related. So I asked around. Good blog friend Ann Bares pointed me in a couple of directions and I also asked, via Twitter. two attorneys, Eric B. Meyer and Jon Hyman. Both replied that the answer was a resounding YES! I was pointed to the following fact sheet from the US Department of Labor, Fact Sheet #23, which clearly states on page 2 "Where non-cash payments are made to employees in the form of goods or facilities, the reasonable cost to the employer or fair value of such goods or facilities must be included in the regular rate."

So clearly, if you are giving non-discretionary bonuses based upon production standards, the amount of the bonuses or the value of the award must be added to the base pay rate of the employee and then overtime must be calculated on this amount. If you fail to do so you run the risk of falling into the same trap that caught QuikTrip and many others. Go back and read the comments from yesterday, they are very informative.

As additional resources on this topic see also Ann Bares post on Compensation Force entitled
Know Ye the Regs When Awarding Bonuses or Lump Sums to Nonexempts and Michael Moore's post entitled Bonus and other Lump Sum Payments to Nonexempt Employees may Impact Overtime Calculations . Both are very informative.

Now you have no excuse for making this mistake and you can make yourself an HR HERO in your company.