5 HR Issues You Can Expect to See More of in 2018

5 HR Issues You Can Expect to See More of in 2018

This article was originally posted by TriNet on January 3, 2018.

TriNet is preparing for 2018 and thinking about how we can help small and midsize businesses (SMBs) be as proactive and compliant as possible when it comes to HR. Here are some of the most notable topics and issues we think you can expect to see more of in the next year and our guidance on preparing for the effects they’ll have on your business.

1) Workplace sexual harassment
Throughout the latter part of 2017, it seemed as though a day didn’t go by without a public figure or major company facing accusations of sexual harassment. Harassment in the workplace is something HR professionals have been fighting for decades, yet more and more allegations come to light.

poll by NBC News and The Wall Street Journal found that 48% of currently employed women in the U.S. have been verbally or physically harassed or had unwelcome advances made at work.

Sexual harassment is something companies cannot ignore and it is becoming more important that they proactively guard against it. Businesses should establish or update processes that not only create a policy and culture of zero tolerance for any type of harassment but that also quickly and thoroughly respond to and resolve any harassment allegations that may arise.

We touched on sexual harassment in a previous blog post and gave advice for companies to start combatting harassment in the workplace. We cannot stress enough that employers should make the following a priority in 2018:

2) Department of Labor overtime rules
As you may recall, the Obama administration’s Department of Labor (DOL) introduced a final rule in 2016 to increase the minimum annual salary threshold for most “white collar” overtime exemptions (executive, administrative and professional) under the Fair Labor Standards Act (FLSA) from $23,660 to $47,476. This final rule was challenged by many states and preliminarily blocked by a federal court prior to its effective date of December 1, 2016. On August 31, 2017, the federal court issued a final judgment against the DOL, ruling that the DOL exceeded its authority by raising the minimum salary threshold to qualify for those exemptions so high that it created a “de facto salary-only test.”

The Trump administration’s DOL has stated that it intends to withdraw the final rule and issue a different rule with an increased minimum salary threshold but something lower than the amount used in the final rule. This new threshold is anticipated to be in the $30,000 to $35,000 range. The DOL still intends to appeal the court’s final judgment, in an effort to uphold its ability to use a salary-basis test as part of the exemption analysis.

What this means for employers is that a final resolution of this issue will depend on both the DOL likely issuing a new rule in 2018 that will increase the current minimum salary threshold for FLSA exemptions and the appellate court confirming the DOL’s ability to establish that new rule as part of the exemption analysis. In the meantime, it’s a good idea to review your FLSA classifications and have a plan in place to potentially address exempt employees with salaries under $30,000 in case the minimum salary threshold is raised to that level or above. This will help you budget so you can stay ahead of the game.

3) Affordable Care Act
One of the biggest unknowns for 2018 is the future of the Affordable Care Act (ACA). President Trump campaigned on the promise to repeal and replace the ACA. However, Congress has only been able to repeal the individual mandate requirement, beginning in 2019, through the measure’s inclusion in their tax legislation, which passed the House and Senate on December 20 and was signed into law by the president on December 22, 2017.

That means that the ACA will continue to govern individuals who receive medical insurance through their employers and companies that provide such benefits.

The IRS has also stated that it will not accept 2017 tax returns that don’t indicate whether the filer had insurance for the year.  It’s crucial that you work with an HR professional who can help you with the complicated ACA reporting requirements.

4) Equal Employment Opportunity Commission wage reporting
Toward the end of the Obama administration, a ruling was issued that would have required companies that file EEO-1 Reports to provide data on employee compensation and hours worked, categorized by sex, race and ethnicity. This requirement was supposed to apply to the EEO-1 Reports for 2017, which would have been due by March 31, 2018.

The Trump administration stayed the wage data reporting requirement of the EEO-1 Report for further study. The EEOC is expected to provide more information in the near future about the revised EEO-1 Report’s status and what employers should expect.

Even without this requirement, employers should still take steps to ensure that they are providing equal pay to employees who perform similar work, regardless of factors such as sex, race, ethnicity, etc., to comply with any applicable equal pay laws (discussed in more detail below) and anti-discrimination laws and to be at the forefront of best practices. Start by reviewing the current compensation bands within your company. Review your pay bands within each individual job title or each department and see where pay gaps lie. Determine whether there are legitimate factors for the pay gap and, if not, develop a way in which you can begin to close the gap. This can be done with incentive programs, greater annual wage increases for high performers or even temporary wage increase freezes until you are able to level the playing field.

5) Salary equality
Various companies have taken steps, especially over the last few years, to close the gender gap when it comes to compensation. The trend will likely continue into 2018 as more states and cities enact laws intended to keep employers from asking about—or relying on—salary history as a basis for compensation negotiations, which is one way to combat historic difference in compensation by gender. One would expect additional actions from states and municipalities to address this issue as well.

California is on the cutting edge of this trend, having previously enacted the California Equal Pay and Fair Pay Acts. Those regulations allow employees to openly discuss compensation and require equal pay for employees who perform “substantially similar work,” among other provisions. In addition, California recently passed a ban on salary history inquiry that begins on January 1, 2018.This ban prohibits California employers from asking about or seeking previous salary history and from including that information in decisions regarding compensation or an offer of employment. Notably, the California law requires an employer, upon reasonable request, to provide an applicant with the pay scale for a position.

Delaware and Oregon also have compensation history inquiry restrictions in place. Massachusetts is set to follow in 2018. San Francisco and New York City have also passed similar regulations. Additionally, there are federal laws, such as the Lily Ledbetter Equal Pay Act and the Equal Pay Act, which address unfair wage gaps. You can expect the list to grow over time, as more and more cities and states seek strategies to address pay inequality.

These are just a few of the major HR topics businesses should keep an eye on in 2018. As always, TriNet will stay abreast of trends and changing legislation that affect SMBs.

This communication is for informational purposes only; it is not legal, tax or accounting advice; and is not an offer to sell, buy or procure insurance.

This post may contain hyperlinks to websites operated by parties other than TriNet. Such hyperlinks are provided for reference only. TriNet does not control such websites and is not responsible for their content. Inclusion of such hyperlinks on TriNet.com does not necessarily imply any endorsement of the material on such websites or association with their operators.

Jenna Brown is a principal human capital consultant with TriNet.

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