How Remote Work Affects Fair Labor Laws

You've probably heard about the massive change in the workplace that many refer to as the "Big Quit." This “occupational pandemic” is affecting millions of workers and employers across the country. The demand for labor remains high, but the supply of qualified workers - especially in technical areas - is low. As competition for applicants with the skills needed to successfully run a business increases, widespread resignation is creating difficult hiring conditions for HR managers almost everywhere.

With such headwinds, dealing with regulatory violations is a time commitment your company can't afford. Knowing and adhering to fair labor practices is crucial to keeping your business on good legal footing so you can continue to provide your employees with a great work experience.

The discussion surrounding President Biden's Build Back Better (BBB) bill has reignited interest in the Fair Labor Standards Act (FLSA). The goal of the BBB Act is to "put the United States on track to meet its climate goals, create millions of good-paying jobs, enable more Americans to enter and remain in the workforce, and our "To grow the economy from the bottom up and from the center outwards".

Time will tell what the results of the BBB plan will be. Meanwhile, fair working conditions still have an impact on many companies. We've looked at how the FLSA impacts the workplace and what companies can do to adapt.

How fair working conditions impact employee experience

To provide clarity, let's first define what "fair work" means and why it matters in today's climate. The United States Congress enacts labor laws to protect the interests and welfare of employers and employees. The federal FLSA establishes the responsibilities of private and public employers in paying their employees and ensures the protection of employee rights so that employees receive a fair wage for their time.

However, many state and local governments have their own labor standards that support or supplement the FLSA. Depending on where your employees live and work, these government labor standards may include higher wage requirements, stricter overtime regulations, and other child labor regulations.

What does this mean for employers? As remote work becomes more common, employers and human resources managers must design their fair labor practices to address varying state and local laws. A new component of the employee experience is therefore staying up to date on how fair working conditions affect employees in different states.

New sanctions that employers should be aware of

The National Labor Relations Act (NLRA), enacted by Congress in 1935, also influences best practices in the area of fair working conditions. The purpose of the NLRA is to protect the rights of employees and employers, promote collective bargaining, and restrict certain labor practices that may harm the general welfare of workers, businesses, and the U.S. economy.

Some examples of violations of the NLRA include:

• Threatening loss of jobs or benefits if workers join or vote for a union or engage in protected concerted action.
• Threatening closure of the plant if workers elect a union to represent them.
• Promising benefits to employees to discourage them from supporting the union.
• Transferring, laying off, terminating, assigning more difficult work tasks, or otherwise punishing employees because they have participated in a union or protected concerted action.

President Biden's "Build Back Better" bill imposes severe new penalties for employer violations of the NLRA. BBB would impose new civil penalties in the form of fines in addition to traditional violations. The bill provides that any unfair labor practice (ULP) violation by an employer would result in an additional penalty of up to $50,000 per violation.

Additionally, the bill would add personal liability conditions. Personal liability has never been part of the NLRA, so this is an unprecedented step. The bill still faces hurdles as it makes its way through Congress, but companies should be prepared to make adjustments if the plan passes.

What should employers do?

Regardless of whether the BBB passes, this would be neither the first nor the last time labor law changes. So what should employers do now and what kind of fair labor practices should they put in place?

We recommend conducting an FLSA compliance audit. Companies should conduct an internal fair labor audit once a year to ensure compliance, especially as the number of frontline workers increases. The audit should review your company's policies, procedures, and documentation to ensure that payroll, employee hours and wages, and any necessary exemptions are in order.

Remember, a comprehensive review must also include contractor and non-employee policies, record retention, and overtime exemptions, if applicable.

Do more than fair employment

While fair labor practices help ensure fairness for employees and keep the company out of legal trouble, they are not the only considerations for supporting employees. If you want to provide your employees with an experience that will encourage them to stay with you despite a competitive talent market, you must treat them as your company's most valuable resource.

In the era of the "Big Quit," fair labor practices are paramount for businesses navigating a competitive talent landscape. IceHrm stands as a strategic partner, offering comprehensive solutions to ensure FLSA compliance, fostering a workplace where employees thrive amidst changing labor dynamics.