How has compliance measures shifted for contract security in this new normal?
Despite new normal, one thing is clear – adhering to fair labor standards act (FLSA), affordable care act (ACA), family medical leave act (FMLA), and other regulations will always be enforced. Now more than ever, there will be a tight vigilance on enforceable regulations to ensure businesses are maintaining compliance through this new normal – and it will be essential to maintain proper lines of communication to your workforce.
As a necessary part of managing any security workforce, contract security must ensure all rules and regulations set forth from federal and state agencies are being properly adhered. These compliance laws are designed to help protect both employees and you – as the employer. However, for a lot of businesses, understanding and navigating compliance can be daunting. Let’s look at a few important compliance rules, and some places to find more information to help you.
Fair Labor Standards Act (FLSA)
Fair Labor Standards Act (FLSA): As one of the biggest labor laws, the FLSA encompasses a number of elements. FLSA is enforced by the Department of Labor’s Wage and Hour Division, and covers a number of requirements, including:
- Minimum Wage: The current federal minimum wage is at $7.25/hour or $2.13 for tipped employees. Yet, it can get tricky for businesses who operate in multiple jurisdictions. As you know, many states have their own minimum wage rate; and, in some cases, counties and municipalities will have their own minimum. The key here is to find the highest minimum wage and adhere to that. Download a document to view the minimum wage down to localities to see where you stand.
- Overtime Pay: In addition to ensuring your security workforce is paid the required minimum wage, security company owners must also know who is eligible to receive overtime pay and how to calculate it. Failure to do so will result in a wage and labor violation. Recent changes overtime eligibility rules extended overtime to more employees.
- Hours Worked, Records, and Child Labor: FLSA regulations also include details on employee’s hours, including breaks and meals, proper recordkeeping and notification to employees, and addressing child labor laws.
The Affordable Care Act (ACA)
Regardless of business industry, employers who employ over 50 Full Time Equivalent Employees (FTE) are required by law to offer health insurance and benefits. The ACA is designed to monitor and track all employee health benefit elections, eligibility and reporting to the IRS. Many employers struggle with their ability to pay for the required benefits while many employees opt out of these programs for financial reasons. Employers who disregard offering benefits may face a fine as high as $2,320 per FTE. For this reason, it’s essential to communicate clear, concise, and well documented benefits offerings to your security workforce. You need an ACA compliance Solution in place to help track the eligibility of employees, as well as find a benefits management solution that offers affordable packages, providing your employees Minimum Essential Coverage (MEC) and Major Medical plans, possibly also including additional benefits for Commuter Benefits, Flexible Spending Accounts.
You can review and download the forms for reporting ACA to the IRS below:
Family Medical Leave Act (FMLA)
Just as the FLSA protects the employee’s right to a fair wage, the FMLA protects an employee’s right to keep their job while taking an extended medical leave. If an eligible employee needs to take time off for a medical event – such as the birth of a child, illness, or care of a loved one – they are able to take up to 12 weeks during the year of unpaid time without penalty or risk of losing their job. The federal law applies to companies with 50 or more employees; and, just like minimum wage, the requirements could vary depending on where your business is located. Some states offer paid family leave while others offer unpaid. It’s important to not only know what you need to provide but to also make sure you communicate this to all employees. View an overview by the Department of Labor.
Sexual Harassment Training
More recently the topic of Sexual Harassment Training has been brought to the forefront of the workforce compliance discussion. Part of the Equal Employment Opportunity Commission’s oversight, Sexual harassment is illegal and currently 10 states require documentation of sexual harassment training.
- New York (with NYC having their own requirements)
Proper Tax Reporting
Probably the most common compliance concern for contract security and other employers alike is planning, recording, and filing tax returns properly and on time. Employers are required to submit multiple tax forms to a number of different agencies and provide different tax forms to your employees. The list can be very extensive depending business type and the types of workforce pay. The federal forms generally fall into these broad categories (view more information here):
- W-4 (Employee Withholding Certificate): The W-4 form was recently revamped for 2020 and provides direction and proof of how much tax withholding employers need to take from employees.
- W-2 and/or 1099 (Wage Statements): Your security workforce needs their W-2 in order to file their induvial taxes.
- The 941 and 94”x” forms (Employer Tax Returns): There are several types of tax return forms to consider for employers – depending on business type and filing requirements. View a summarized list of tax forms and the full list from the IRS here.
Ensuring Proper Compliance Measure for Your Security Workforce
Just like anything related to compliance, there are form and filing variations based on state, locality, industry, sector, and more. The important thing when it comes to operating your security company in a compliant manner is to determine which defined categories apply to your business. The best advice is to invest in a partner, provider, or consultant that will help you navigate these compliance waters. Having someone that will help you along the way will allow you to focus more on running your business while staying compliant.
If you have any questions about compliance, security, and how to manage your hourly workforce, feel free to contact us.