employees in a meeting
Current legislation impacting the modern workplace is encouraging business owners to understand HR compliance and review their policies. — Getty Images/FS-Stock

In the current social landscape, issues like sexual harassment and legal cannabis are at the forefront of many people's minds – including our nation's lawmakers. Across the country, new and updated federal, state and local laws are impacting the HR compliance responsibilities of U.S. employers.

Small businesses in particular should pay attention to these changing laws: If employers do not adhere to these rules and comply with legal requirements, they can be subject to very costly penalties and fines, said Kristin LaRosa, senior HR counsel for ADP, a global provider of cloud-based human capital management solutions.

"[They may also] be subject to complaints filed with human rights agencies, lawsuits, ... wages owed, attorney fees [and] other damages attached to that particular violation of law," LaRosa added.

Compliance with employment legislation is about more than avoiding monetary fines, though. In today's competitive environment, compliant, inclusive HR policies can help you build a reputation and culture that's appealing to top talent.

"You want to make sure as an employer that you're ... putting into place all of the necessary tools, resources [and] policies that you need ... to promote and support a diverse and inclusive workforce," said Meryl Gutterman, counsel for ADP.

HR compliance areas impacting small businesses

CO– recently spoke with LaRosa and Gutterman about current legislation that is impacting the modern workplace. Here are a few of today's biggest HR compliance trends and how small businesses can keep their policies up to date.

Reasonable accommodations: Medical marijuana laws

Cannabis legalization is one of today's fastest-changing legislative areas. Federally speaking, the Americans with Disabilities Act (ADA) does not protect individuals who use medical marijuana, since marijuana is still an illegal drug under federal law. It's a different story on the state level, though: At present, 33 states and the District of Columbia do allow for the use of medical marijuana, and 10 (plus D.C.) permit legal recreational use.

This is why it's imperative to understand the laws in your state and local jurisdiction surrounding cannabis use. Despite this evolving legislation, you do not have to permit the use of marijuana in the workplace, during work hours or on company premises. However, if your company operates in a jurisdiction where medical marijuana is legal, your employee may have certain protections for off-duty conduct, as long as use does not impair them on the job.

#MeToo: Sexual harassment training and policies

Much like marijuana legislation, requirements around anti-harassment policies and training vary from state to state. Many jurisdictions have recently updated laws related to sexual harassment in the wake of the #MeToo movement, and in a number of states, employers of a certain size may be required to adopt official sexual harassment policies and follow employee training protocols.

Even if you are certain that you are compliant with your state's laws about anti-harassment initiatives, it's important to ensure that all employees acknowledge and understand your policies, as well as the consequences of violating them. Having a policy in place may not be enough. According to a survey of small businesses done by Aureus Asset Management, of the small businesses surveyed who had a written sexual harassment policy, only one in three had conducted any employee training on the topic.

The wage gap: Salary-related interview questions

An increasing number of cities and states have enacted bans on salary history questions during job interviews and screenings. Gutterman explained that these laws were passed to address pay gaps resulting from discriminatory pay practices. If workers were paid less than they should have been in a prior job and tell a new employer what they earned, it may give the employer an incentive to perpetuate that lower salary, she said.

"Hiring managers [in jurisdictions with these laws] … can't ask what an applicant is making in their current job or what they've made in the past," Gutterman added. "They can't base their pay decisions … on an applicant's prior pay history."

The gig economy: Worker classification

As an increasing number of professionals opt for freelance or contract positions over traditional employment, employers need to pay close attention to how they’re managing relationships with any independent contractors they hire to provide services.

"We've seen cases where workers have filed complaints against employers claiming they were misclassified as independent contractors and should have been classified as employees," said LaRosa. "For example, they're bringing claims under the Fair Labor Standards Act for wages owed, such as overtime or minimum wage, etc."

The IRS (amongst other agencies) has laid out a number of behavioral, financial and relationship factors that determine whether a worker should be rightly classified as an independent contractor. Generally, said LaRosa, a contractor is self-employed and is free from direct control and supervision by the company, over things like when and how they do their jobs.

"If a worker is not meeting all of the applicable contractor requirements, they can claim that they should be treated as employee [and therefore] entitled all of the benefits they should have gained had they been properly classified," LaRosa explained.

A culture of inclusion: Expanded protected characteristics

Title VII of the Civil Rights Act of 1964 introduced the federal prohibition of employment discrimination based on "race, color, religion, sex and national origin." Since then, other characteristics, such as disability, age, pregnancy, military service, genetic information and citizenship status, have been added to that initial list. However, many states and local jurisdictions have expanded their protected characteristics even further, particularly around sexual orientation, gender identity and family status.

Gutterman noted that laws are being passed that require equal restroom access, and expanded protections for pregnancy and related medical conditions, and for breastfeeding mothers, to name a few. She advised reviewing your Equal Employment Opportunity and anti-discrimination policies to ensure that all individuals in your workforce receive the protections to which they are entitled.

You can learn about other important HR compliance issues, such as paid family and sick leave, new proposed overtime rules, and minimum wage increases, in ADP's recent blog post.

How to keep your HR policies up to date

At a minimum, ADP recommends reviewing and updating your company's human resources policies on an annual basis. However, due to the increasing number of evolving laws and employer requirements, Gutterman said it's a good idea to review every six months, if not more often.

Staying abreast of employment laws, including those that impact your specific industry, can also help you determine whether or not you need to update your policies and handbooks, Gutterman added.

Of course, as a small business owner, you may not have the time or resources to track every single changing law that might affect your workforce. That's why it's important to have a resource you can turn to for a broader perspective, so you can ensure your policies are up to date, said LaRosa. Small business owners can consider joining organizations that are focused on local businesses to keep on top of recent legislative developments. They can also review federal and state department of labor and agency websites for updates, or subscribe to receive publications issued by human resources organizations and employment law firms which often track and communicate changes in employment laws.