Now that 2011 has come to an end, you have wrapped up the W2s and sent them off to your employees, your financial team is preparing year-end documents and now it is time to do a thorough review on 2011. How successful was your company? Where were you over budget? Did you budget for your human resources? How have your company's HR policies and procedures affected your bottom line? Let's take a look.
Aside from wages, benefits are likely the next largest expense for your company. Evaluating the plans that your employees actually use is critical and can bring you savings. By actively engaging with your broker, you should be able to determine your benefit plan utilization. Secondly, properly reconciling your benefits monthly with the carriers is essential to be certain changes in your company demographics are getting reported and charged correctly. Are you wisely spending money on your benefits or is it time to look at alternatives like a health savings account, a flexible spending account or a consumer driven health plan?
Now that you have reviewed your benefits, what about those salaries? Have you conducted a salary survey to see that you are paying your staff competitively? There are several on-line resources that can help you determine salary figures for your type of industry and geographic area. Have you reviewed exempt vs. non-exempt status recently? There are many things to consider when determining an employee's status. Seek professional advice if needed. You need to reduce the cost of having to pay overtime wages unnecessarily, but you also need to pay overtime wages if your employees are truly non-exempt employees. Failure to pay overtime can lead to back pay, fines, criminal penalties and attorneys' fees. It is your responsibility to know the law, train your managers on proper time-keeping procedures, investigate any complaints, audit time records and address any discrepancies immediately.
Take a look at paid time off, vacation, sick time and holidays. Many companies carry a substantial amount of paid time off each year for their employees which can leave a heavy burden on your financials. If your company offers paid time off, ensure that you are recording such events properly and reconciling it each pay period. It's best to implement technology to properly record vacation and leave events automatically. Many time-clocks or electronic timesheets will provide a record for you. Ensure that you are providing each of your employees a listing of the company holidays at the beginning of each year. It may also be an opportunity for you to remind each employee of your time-off practices to ensure that everyone is following the guidelines. If you are a multi-state employer you will want to ensure you are complying with the vacation pay-out and accrual laws for each state. Nevada has some of the more employer friendly laws as it relates to vacation payout and accrual.
All companies should review their workplace for safety conditions regardless of industry. Oftentimes we see boxes in major walkways, heavy materials stacked up on shelving units, cramped workstations which can lead to ergonomic injuries and many other situations that can go unchecked in the workplace and end up costing hundreds and even thousands of dollars in workers' compensation claims if not addressed. It is your obligation as an employer to ensure that every employee works in a safe and healthy environment. A Nevada employer with 11 or more employees must establish a written workplace safety program. If you have more than 25 employees, the establishment of a safety committee is also required. The Safety Consultation and Training Section (www.4safenv.state.nv.us/) is available to provide a workplace hazard assessment. This service can assist employers in minimizing on the job hazards and is provided at no cost. The division also offers free safety training and information programs for Nevada employees.
Employers often think of an employee handbook as simply a bunch of policies and procedures. The handbook can actually provide much more than just a framework for daily operations. A good handbook outlines policies and procedures that support the company's mission, minimize operating costs, reduce liability and encourage a certain corporate culture. To that same end, your employee handbook could have a number of policies that are no longer necessary, costing the company money unnecessarily and hurting morale instead of boosting it. This is a great time to take a look at your employee handbook from the perspective of how the handbook can work for the company, support your short and long term goals and create cost savings wherever possible.
This might be a good time, too, to review all of your employee personnel files and ensure that all forms are completed properly and filed appropriately. The most common mistake that we see is that employers file the employee's I9 in the employee file. You should file all the I9's in a separate file to avoid opening the door to other forms of litigation. Employers should also have a separate medical file for all medical-related information including the group health enrollment form. An audit can also help you make certain your company is consistently requiring that every employee complete the same documents including an employment application. Compliance with state and federal laws and implementation of your corporate policies and procedures are two key issues when it comes to personnel files.
Remember last spring when you finally cleaned out the garage? You were so excited to find that item you had been missing for so long that you really needed, and thank goodness you found that leaking gas can before a fire started! Auditing your HR practices is very similar. It is a great opportunity to be sure your HR infrastructure is both legal and supports your company goals. An audit can also uncover an HR leaky gas can that needs to be fixed before it results in a potentially costly accident and lawsuit.
Sarah Sommers is chief executive officer of Solutions At Work, a Reno-based human resources consulting firm. Contact her at 775-827-9675 or sarah@mysolutionsatwork.com.
