The pandemic has created a variety of compliance challenges for companies. This includes employees working remotely, to new and constantly changing regulatory and statutory requirements such as vaccination and paid leave mandates. As they work to understand these changes and help their clients through a new compliance landscape, these challenges are placing accounting firms—particularly owners and decision makers—in the hot seat.
Here are four ways you can find your way through the maze:
Adapt Policies, Practices and Systems
For many employers, the pandemic brought on full or partial cessation of in-office work. Remote work became the norm almost overnight, regardless of how prepared a company was to support it. While employers’ legal obligations did not change, managing their workforce became much more complicated. For example, how could they properly track time for non-exempt employees who no longer work onsite and access a timeclock? Do outside sales employees still qualify as exempt under the Fair Labor Standards Act (FLSA) when they’re no longer on the road visiting clients and prospects?
The realities of a fully remote workforce challenged many companies’ internal policies, practices and systems. For the first time, employers must consider where their employees are working, since they are no longer bound by proximity. It’s very likely that many of your clients’ employees are working not just from “home,” but in some cases, from new jurisdictions as employees migrated to other states and locales.
This could mean changes in income tax, workers’ compensation, and other state-based legal and tax obligations. For example, your client may need to now pay into unemployment in other states, which could impact whether you need to prepare income tax returns in those states going forward. A good payroll solution provider monitors these changes and integrates them into the payroll system in real time—so you and your clients don’t have to worry about the added complexities of their decentralized workforce.
Stay on Top of Laws and Regulations
Fortunately, many states issued safe harbor laws or regulations in which they would not assert certain tax obligations for temporary remote workers early in the pandemic, but this was not universal. The laws often did not exempt all of a company’s potential obligations in a state, or they might apply in some states where employees were working but not others. And many of the state safe harbors are now expiring.
Employers should work with their legal counsel to analyze the laws and regulatory requirements both where they have physical workplaces and where they have remote workers. In addition to differing tax rules, pay particular attention to differences in paid leave and anti-discrimination laws.
The hybrid world of work is here to stay. Your clients and employees need your guidance to navigate this new world.
Also, remember that many states and municipalities have laws that apply based on the total number of hours spent working within the jurisdiction, so keeping track of this information is critical. During the past year and a half, states and municipalities created new leave obligations—some related to COVID and vaccinations, but others more universal. Employers may find that some of their employees are covered by laws with which they are not familiar. And some of these laws contain notice and posting obligations that must be considered and addressed.
Even when employees work remotely in the same municipality as their onsite workplace, companies must maintain compliance to the same standard as they did when work was in-office. How a company complies with notice and posting, for example, will differ for in-office versus remote workers.
Maintain a Culture of Compliance
Timekeeping can be challenging for remote workers who can’t access a company timeclock. Businesses need to make sure that employees’ ability to log their time is unimpeded and that there are no irregularities. Advise your clients to communicate to employees what is expected and conduct a self-audit to make sure recordkeeping practices are as good for remote workers as when they were onsite.
The pandemic and remote work has led many workers to feel like they are “always on” because there is no longer any physical separation between work and home. For non-exempt employees, this can create wage and hour issues if not properly monitored and addressed.
Also, discrimination, harassment and retaliation can still happen, even when employees work remotely. In fact, sometimes individuals feel less inhibited by the more informal and impersonal interactions when communicating remotely over videoconference or internal collaboration tools than when employees are in the same physical space. Advise your clients to remind workers that the same expectations exist regardless of where work is being done and improper behavior is never tolerated. Be sure employees know how to report misconduct.
Adapt Corporate Governance and Communication for Remote Work
Remote and hybrid work can be a real benefit to companies. Companies have access to a larger labor pool of talent, and many employees prefer a remote or hybrid arrangement. But remote work also brings complexity and risk. The business must remain aware of and adhere to laws passed in new jurisdictions, and the administrative burden could outweigh the benefits of having remote workers in some localities.
Some companies have started to limit where they will permit remote workers to be based—not just restricting work from other countries but even from certain states that may have unique compliance obligations.
For remote workforces, collaboration can be more challenging. Fortunately, there are many tools available today to collaborate via chat and videoconference, as well as traditional email and phone. But employers need to choose the right tools for the message. For example, important messages about changes in company policies should be communicated through more formal means than internal chat platforms which tend to be more informal. Leadership needs to communicate often and consistently to employees on critical topics like compliance requirements. The need for these kinds of communications is even stronger for remote workforces.
The hybrid world of work is here to stay. Your clients and employees need your guidance to navigate this new world. Help them learn how to maximize all the benefits that hybrid work brings while avoiding any compliance headaches along the way.
Joe Nuzzo is VP – Managing Counsel on ADP’s Human Capital Management legal team. He and his team provide advice and counsel on the design and functionality of ADP’s HCM product offerings and in support of the services ADP provides to over 900,000 clients and 40 million workers. Prior to joining ADP, Joe practiced law at national and multinational law firms, primarily focusing on employment and labor law matters and commercial litigation. Joe has represented global companies in disputes in federal and state courts and administrative agencies, involving employment discrimination, harassment, whistleblowing, wrongful termination, wage and hour, employee misclassification, disability accommodation, noncompetition, workplace tort, benefits and labor issues. Joe has represented clients across a broad spectrum of industries, such as financial services, manufacturing, telecommunications, transportation and logistics, technology, entertainment, travel and hospitality, sports and healthcare.
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