Consider an Audit of Your HR Function for the Year Ahead

With 2024 still in its early stages, it may be a good time to take a renewed look at how you manage your organization’s people and HR practices, processes and compliance.

This is where an HR audit can be helpful. An HR audit is an effective tool to assess your present status on a number of HR-related topics, providing recommendations on moving forward.

An audit helps identify areas where your business processes may not be in regulatory compliance and may illuminate inefficient management practices. An HR audit also helps you evaluate employee management practices and identify areas for growth.

To illustrate this, here’s a brief checklist of what an effective HR audit generally entails:

  • Audit questionnaire: Identify the key areas of your HR management practices using a list of specific questions related to each area.
  • Collect the data: Collect and review all pertinent written documents, forms, communication materials and personnel files.
  • Conduct interviews: Gather input from the management team regarding their HR needs, issues, challenges and their day-to-day management practices and employee-related issues.
  • Summarize the results: Consolidate the information collected. Determine which practices are good and which practices need improvement. Recommend specific solutions for improvements in accordance with compliance requirements and HR best practices.
  • Obtain approval from senior management: Present the preliminary results and recommendations to senior management. Obtain their feedback regarding the findings and approval for recommendations.
  • Create action plans: These plans help ensure the audit delivers positive results over the near and long-term.

In support of this, an HR audit helps fuel your employees’ performance and provides leadership with a more focused direction to help stay on a business growth track.

impactAction: If you have questions about conducting an HR audit, contact us at info@impacthrllc.com or 443-741-3900.

MD Department of Labor Issues Updated Minimum Wage Workplace Poster

The Maryland Department of Labor recently issued an updated minimum wage poster for workplaces to openly display for employees.

As a reminder, Maryland’s minimum wage increased to $15/hour effective this past Jan. 1, 2024. With this new wage rate, enacted into law in April 2023, all Maryland employers, regardless of company size, must pay employees at least $15/hour.

Important to note: With most Montgomery County-based (MD) employers previously required by Montgomery County law to pay a minimum wage rate of $15 or more per hour, this new State law (enacted last April) also applies to Montgomery County employers with 10 or fewer employees (which were required to have raised employee hourly wages from $14.50 to $15/hour beginning this past Jan. 1, 2024).

In addition, the minimum wage in the District of Columbia increased last July 2023 to $17/hour for all workers, also regardless of company size.

The Virginia minimum wage, currently $12/hour, will increase to $13.50/hour effective January 1, 2025.

D.C. Issues Updated Paid Family Leave Poster for Workplaces

D.C.’s Department of Employment Services recently issued an updated Paid Family Leave poster to be displayed in the workplace.

This updated poster, to be displayed prominently in D.C. workplaces, reflects the new maximum weekly benefit amount of $1,118. The previous maximum weekly benefit amount was $1,049.

D.C.’s s Paid Family Leave law provides covered employees paid time off from work for qualifying parental, family, medical and prenatal events.

impactAction: If you need assistance in complying with Paid Family Leave, contact us at info@impacthrllc.com or 443-741-3900.

US DOL Releases Final Rule for Independent Contractor Classification, Effective March 11, 2024

The U.S. Department of Labor (DOL) last month published a final rule for independent contractor classification under the federal Fair Labor Standards Act (FLSA).

Beginning on March 11, 2024, the rule will reinstate the longstanding version of the “economic reality” test the DOL previously used.

This test uses a multifactor, totality-of-the-circumstances analysis to determine whether a worker is an employee who is economically dependent on the employer for work, or an independent contractor (IC) who is in business for themselves.

To prepare for this new rule, DOL recommends employers reevaluate their job classifications. Under the new rule, the economic reality test looks at the following six factors:

  • The worker’s opportunity for profit or loss
  • The relative investments by the worker and the employer
  • The degree of permanence of the work relationship
  • The nature and degree of control an employer has over the person’s work
  • Whether the work the person does is essential to the employer’s business
  • The worker’s skill and initiative

Note that Maryland and D.C. have adopted what is commonly known as the “ABC Test.” Under the ABC Test, a worker is presumed to be an employee unless:

  • The individual is free from direction and control
  • The individual is customarily engaged in an independent business of the same nature as that involved in the work
  • The work is outside the usual course of business of the person for whom it is performed
  • The work is performed outside any place of business of the person for whom it is performed

In addition, Virginia law states that a worker is an employee if his or her employer:

  • Furnishes tools, materials and equipment needed to do the work
  • Sets the hours of work
  • Withholds payroll federal and state income taxes and Social Security taxes
  • Receives direction and training from the employer about how to do the work
  • Is paid by the hour, week or month instead of being paid at the completion of a job

Click here to read “Frequently Asked Questions about the Final Rule.”

impactAction: If you need assistance in complying with this new rule, contact us at info@impacthrllc.com or 443-741-3900.

In case you missed these impactNews articles . . .

MD Department of Labor Issues Updated Minimum Wage Workplace Poster

Howard County (MD) Chamber Names impactHR’s Kelly Mitchell “Businessperson of the Year”

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