Mistakes with Employment Compliance You Must Avoid
There are many laws that budding entrepreneurs need to adhere with to ensure full compliance of their businesses with the legal requirements of their region. However, some of the very important laws which are often ignored by entrepreneurs are employment laws which must be complied with because failure to comply can result in the business having to pay heavy fines to the government.
The most trouble happens with the paperwork which must be filed, as it is very easy to ignore the nitty-gritty details that require great amount of attention and focus, which entrepreneurs simply do not have. However, it is also easy to comply with the legal requirements, as long as you steer clear of the following three errors.
I-9 Forms that are Missing/Incomplete
Filing the I-9 forms is a requirement, however make sure they are complete before you file them. It is also important to keep all I-9 forms on file as well. According to the legal requirement, the I-9 form must be filed within three days after an employee starts working with the company, and if the deadline is missed, that will result in a fine.
To avoid missing the deadline, it is recommended that you have employees sign the I-9 forms during their initial orientation and onboarding. You can also digitize the process and go paperless, which would require e-signatures and would be much faster and efficient.
Make sure to attach all the supporting documents required by law with the I-9 form. This needs to be done by the employee, so all you have to do is make sure they attach it in time.
After the employment contract is terminated, it is necessary to terminate the I-9 form as well, however the timeline is crucial. The form must be terminated either after one year of the termination of the employment contract, or three years after the employee starts working for the company.
W-4 Forms Which Are Outdated
The W-4 form must be completed before the employee receives the first paycheque, ideally right after the start of the employment contract. Compliance requires that the forms represent the most current situation pertinent to the employees they represent. However, of course it’s not possible to maintain absolute current information on the W-4 forms. Hence, good practice would be to have your employees update the W-4 form every year.
Filing the W-4 form can seem very intimidating to new hires who are not used to dealing with tax documentations. However, it is important that employers not influence the tax filings of the employees, even if it is to help them. Instead, employees should be redirected to this article by the IRS which shows how to accurately calculate the withholding tax.
The Job Application Form is Absent
The job application form must be completed in accordance with the legal requirements of the state as well as the country of the business. It is very important to assess which questions must be put on the job application form to make it compliant with regulatory requirements. These questions are needed to assess whether the employee has any criminal background, among other things. It is important that the legal team (if there is any, otherwise you must do this), stays updated with the regulatory requirements of the region where the business operates, as failure to comply with these requirements can result in liability claims as well as penalties for non-compliance.
The job application form also has benefits for the employer. Throughout the term of the employment, it serves as the primary document which the employer can refer back to as a quick source of obtaining primary information about the employee.
Of course, the process of employment is lengthy, costly, and time consuming, and requires diligent input by both the employer and the employee. However, it is more important for you, the employer, than the employee, to make a careful analysis of the legal requirements laid out in the region’s employment laws as any non-compliance penalties will have to be paid by the business, and not the employees. Other than that, the employment laws are pretty straightforward, and you should not expect to run into much trouble with them.
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