[Author: Bob Evnen, Woods & Aitken LLP, 2014 | Keywords: Human Resources, Manager]
When should you hire a Human Resources (HR) Manager for your dealership?
There is no pat answer for this question, such as “when you have X number of employees,” or
“when you have $X in annual sales.” Adding any new position to your business adds payroll costs for salary, employer tax contributions for unemployment, Social Security and Medicare, workers compensation insurance, health insurance, vacation and sick leave.
Integrating a new position into your organization also requires careful thought and planning in terms of responsibility and authority, and hiring and integrating a new person into your existing management staff also takes careful thought in order to get everyone started off on the right foot.
When are these expenses and exertions worth it?
Like every other corner of your business, the legal compliance requirements for employment continue to expand. When I began practicing law (admittedly in the last century) employers had to comply with minimum wage and overtime requirements, and the prohibition of discrimination on the basis of race, national origin, religion, sex or age. Union-free employers were unconcerned with the National Labor Relations Act. The Employee Retirement Income Security Act (ERISA) was brand new and simple. And OSHA enforcement was uncommon.
Since then, new employment laws abound, including: the Older Workers Benefit Protection Act; Americans with Disabilities Act; Genetic Information Nondiscrimination Act; the extension of “sex” discrimination to cover lesbian, gay, bisexual and transgendered people; the Family and Medical Leave Act; increased enforcement of anti-discrimination, OSHA and wage/hour laws; National Labor Relations Act intrusions into the non-union workplace; vast ERISA expansion; COBRA health insurance continuation rights; and the passage of the Patient Protection and Affordable Care Act (often called “Obamacare”).
The increasing complexity of the regulatory environment has two big implications: 1) increased administrative overhead, which is the time, effort and expense to maintain an acceptable level of compliance; and 2) professional advice to help a business get from “point A” to “point B” in personnel matters with the least amount of risk of non-compliance. HR managers can help with both.
Risks of non-compliance increase depending on the number of people employed. Typically, non-discrimination rights apply to businesses employing 15 or more. COBRA kicks in at 20 employees, while FMLA applies to employers of 50 or more. (The way employees are counted is complicated.) OSHA only requires that you employ someone.
By the time a dealer employs 50 people (and possibly before that), consideration should be given to establishing a full-time HR manager position. As I’ve illustrated above, there are compliance requirements for employers with fewer employees, but dealers have a couple of options. First, they can create a position that combines HR administration with other administrative duties such as payroll responsibilities. Some businesses combine HR management with general operations or financial management. As a business grows, these responsibilities can be divided into separate positions.
The individual assigned HR management responsibilities should be given ample opportunity to obtain training in HR issues. There are many good quality resources for this, including workshops and conference sessions provided by the Iowa-Nebraska Equipment Dealers Association (I-NEDA).
Dealers also have another great resource as part of their I-NEDA membership – the Human Resources Helpline. When you call, we’re on the other end of the phone. You can reach us toll-free at (855) 277-5575. For the past two years we have helped dealers with a variety of employment issues, including wage/hour, unemployment, discrimination, disciplinary problems and more. We strive to provide practical advice and clear answers to your compliance questions and respond to all calls within one working day or less.
In conclusion, I suggest thinking about HR management this way: 1) as you grow, make personnel management functions part of the responsibility of an existing management position and make training available to the person in that position; 2) use I-NEDA’s Human Resources Helpline for advice and counsel; and 3) you’ll know when you’ve reached a size that justifies a full-time HR professional on board, and we can help you evaluate that too.
Providing Paycheck Detail to Employees
The Fair Labor Standards Act, which is the federal wage/hour law, requires employers to keep detailed records of hours worked and wages paid to employees. However, it does not require employers to provide pay stubs to employees that show hours worked, gross pay, deductions, net pay and the like.
For many years, Iowa employers have been required by state law to provide their employees with a wage statement showing hours worked, wages earned and deductions taken. Information on hours worked does not have to be provided to exempt employees. Under a new Nebraska statute that took effect on July 1 this year, Nebraska employers must now provide that same information to employees.
Iowa and Nebraska both require the information to be provided every payday via mail or at the employee’s normal place of employment during the employee’s normal employment hours. Nebraska also allows employees to provide the information electronically.
Bob Evnen is a partner with Woods & Aitken LLP in Lincoln, where his practice focuses on advising and representing Nebraska and Iowa employers in labor and employment law issues.