Article
The future of HR and payroll: staying compliant and mitigating risk
May 21, 2024 · Authored by Kim Wylam, Deanna Kempinski
Over the last few years, the conversation around how we work has been dominated by headlines around remote or hybrid work arrangements. While these arrangements are not new, employers have recognized the complexities of multistate employment and the need to prioritize regulatory compliance.
The complexity of HR and payroll compliance is that it’s not just federal, state or local regulations that an employer has to follow – it’s often a combination of these regulations. Employers need to understand how they work together and how to apply them within their organization in order to stay compliant.
Baker Tilly Vantagen professionals Kim Wylam and Deanna Kempinski recently discussed high level human resources and payroll regulatory matters that are changing and offered a potential solution to help employers stay compliant and mitigate risk.
Key regulatory updates
FLSA salary threshold increases
On April 23, 2024, the Department of Labor (DOL) announced its final rule that increases the exempt salary threshold for employees under the FLSA. The changes are likely to face legal action and there are concerns that the new rule places greater importance on the salary amount paid to the employee than the actual work performed. Employers should not wait to take action. They need to make sure they are preparing today. Take the time to review your job descriptions and validate the FLSA classification of your positions. Check compensation levels and account for any changes planned between now, July 1, 2024, and Jan. 1, 2025, and consider the impact on the organization.
Pregnant Workers Fairness Act (PFWA)
The Equal Employment Opportunity Commission (EEOC) issued the final regulation that goes into effect June 18, 2024. This regulation applies to private and public sector employers with 15 or more employees, as well as Congress, federal agencies, employment agencies and labor organizations. The PWFA provides reasonable accommodations for qualified applicants or employees who have known limitations. These are defined as physical or mental conditions related to, affected by, or arising from pregnancy, childbirth or related medical conditions.
Noncompete agreements
The U.S. Federal Trade Commission (FTC) approved a proposed final rule banning most noncompete clauses in employment contracts potentially impacting millions of employees. This rule makes all existing noncompete agreements (except those covering senior executives) unenforceable and requires employers to provide notice to current and former employees that their noncompete clauses are no longer in effect.
There are many ways companies can stay current on multistate HR and payroll compliance requirements, but it’s important to choose your resource carefully. Risks for non-compliance include penalties, fines, legal action and administrative proceedings.
The Employer State Compliance Roadmap is Baker Tilly’s solution to helping employers manage multistate HR and payroll compliance requirements. The Roadmap is an on-demand, subscription-based resource designed to provide employers with access to each state’s HR and payroll compliance requirements in an easy to use, searchable database.
For more information, watch the on-demand webinar now, or contact us to discuss how we can help.
More insights and resources
Multistate Payroll & HR Compliance Management
The Employer State Compliance Roadmap is an on-demand resource guide designed to aid your organization's payroll and human resource compliance management efforts by providing access to each state's respective requirements.
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