Top Concerns by Chief Financial Officers that impact revenues, margins and using benchmark analytics is critical for profit, and non-for-profit organizations.

1. 2019
COMPLIANCE GUIDE
FOR FINANCE LEADERS
The Comprehensive Guide to Compliance
through the Employee Lifecycle
center of excellence

2. The HR Center of
Excellence Presents:
2019
COMPLIANCE
GUIDE FOR
FINANCE LEADERS
CFOs and financial professionals are charged
with the task of overseeing a growing workforce
and have special reasons to be vigilant about
compliance. Finance leaders are naturally wary
of additional regulations, lack of clarity from
the government, costs of compliance and the
unintended consequences of policy decisions
that can impact their business.
As part of our commitment to help Finance
leaders make a difference in their organizations,
we’ll publish deep dives like this one to help you
stay current and effective in a fast-paced and
changing world.

3. About the HR Center of Excellence (HR COE)
The HR COE provides action plans, practical
advice and inspiration to help you make
a difference in your organization.
VISIT PAYCOR.COM/HRCOE

4. What You’ll Learn:
• How to maintain compliance with federal regulations
through the employee lifecycle, including:
Recruiting. . . . . . . . . . . . . . . . . . . 2
Hiring. . . . . . . . . . . . . . . . . . . . . . 6
Payroll. . . . . . . . . . . . . . . . . . . . . 10
People Management . . . . . . . . . . . 14
• Potential violations
• Action plans to help mitigate risk
This information is not intended to serve as legal advice, only as information your organization should
consider when reviewing compliance regulations. We recommend that you consult with an attorney to
discuss specific compliance questions that may affect your organization.
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5. RECRUITING COMPLIANCE
(EEOC & OFCCP)
Recruiting, especially in a tight labor market, is a fast-paced game. Your
company’s recruiters help make sensitive yes/no decisions rapidly, so
the pre-hire phase of the employee lifecycle can be a risky time for
employers. Equal Employment Opportunity Commission (EEOC) and
Office of Federal Contract Compliance Programs (OFCCP) ensure that
companies’hiring practices are fair to everyone and, in addition, do not
discriminate against protected classes of applicants.
PART 1
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6. Who does it affect?
• EEOC: All employers, state agencies and labor unions with 15
or more employees who have worked in that capacity for a
minimum of 20 calendar weeks are required to comply with
EEOC regulations.
• OFCCP: All federal contractors who conduct business with
the government in excess of $10,000, fall under the jurisdiction
of the OFCCP.
Potential penalties:
• EEOC: In 2017, 84,254 workplace discrimination charges were
filed with the EEOC. Victims were awarded $398 million in
settlements and litigation. In 2018, we’re on pace for more than
$100,000 discrimination charges.
• OFCCP: Forty million in back wages and fines paid in 2017,
more than $100 million since 2000.
RECRUITING
COMPLIANCE
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7. What you should know:
You’re the headlights of the organization.
More than 60% of recruiters expect to hire more people
in 2018 than they did in 2017, and 42% of employers are
worried they won’t be able to find enough talent.* That’s
a whole lot of recruiting in the foreseeable future and a
whole lot of compliance to keep up with right at the start
of the employee lifecycle. Don’t count on your in-house or
outsourced recruiters to be compliance experts, especially
when they’re as busy as they’re going to be in 2019. Instead,
make accurate, automated recordkeeping a top priority.
In the event of an OFCCP audit, having applicant data on
file can better tell the“story”for each applicant during the
selection process (e.g., did not meet basic qualification,
phone screened, interviewed, offered, etc.).
*Employer Outlook 2018 and Indeed
Be on the lookout for new regulations.
Another new area of compliance added to recruiters’
checklists relates to salaries. This year, some jurisdictions
–Massachusetts, Puerto Rico, and San Francisco – have
enacted laws either banning recruiters from asking
applicants for salary histories and/or requiring companies to
pay employees equally regardless of gender. It’s important to
review your recruiting practices and implement training to
ensure recruiters don’t unknowingly violate these new laws.
Stay ahead of the curve so you’re not surprised.
In May 2018, the European Union enacted GDPR (General
Data Protection Regulation). GDPR is designed to give EU
citizens more protection over their personal data. And
while this is an EU directive, the European Commission
has applied the principles to the rest of the world (so it
applies to any company that markets or deals with EU
citizens), making it the first global data protection law. If
your company hires people in Europe, you’ll be all over
this. But even if you don’t, GDPR is the start of a movement
that will probably be coming to U.S. legislation soon. GDPR
was designed to protect European citizens’data from
organizations looking to gather and use consumer data.
It just so happens that in recruiting candidates, employers
tend to have a great deal of personal data. In the future,
American employers may be required to give candidates
more control, perhaps in the form of an“opt-out”button
that would automatically delete their data.
PART 1
How Paycor Helps:
Applicant Tracking HR
4

8. HIRING
COMPLIANCE
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9. HIRING COMPLIANCE
(I-9, E-VERIFY)
Your compliance headaches don’t end at recruiting. Federal law
requires all employers to use certain forms to verify the employment
eligibility and identity of all employees hired to work in the United
States. The U.S. Immigration and Customs Enforcement (ICE) has
become far more active this past year, and fines for simple errors,
such as incomplete forms, range from $110 to $1,100 per violation.
Fines increase up to $16,000 per violation for knowingly employing
unauthorized workers.
PART 2
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10. Who does it affect?
• I-9: Form I-9 verifies employment eligibility, and it is required
for every person your company hires. The I-9 does not require
gathering a Social Security number or photo identification.
• E-Verify: E-Verify is operated by the Department of Homeland
Security* and, like the I-9, allows employers to verify the
employment eligibility of employees. E-Verify is mandatory in
more than 20 states and counting. Unlike I-9, however, E-Verify
does require your HR team to gather Social Security numbers
and photo identification.
*Note that E-Verify is also mandatory for employers with federal
contracts or subcontracts that contain the Federal Acquisition
Regulation (FAR) E-Verify clause.
Potential penalties:
• I-9: Penalties for knowingly hiring and employing unauthorized
workers range from $375 to $16,000 per violation. Since early
2018, ICE has relied on I-9 inspections to discover and impose
penalties on businesses that have not appropriately verified
employment eligibility. The number of companies that have had
their I-9 processes audited every year has rocketed from a few
hundred to thousands. In the first seven months of 2018, ICE has
opened more worksite investigations than in all of fiscal year 2017.
HIRING
COMPLIANCE
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11. What you should know:
This is something you’ll want to automate.
Don’t let your HR team spend valuable time (and money)
manually tracking expiration dates and reminding
employees to provide updated documents. Employees who
fall through the cracks are a major compliance risk. Tracking
systems should not only offer a process for entering
I-9 data but also provide confirmation of employment
authorization, allow for customized reports for self-auditing
and implement safeguards to prevent over-documentation.
Make sure your team is on the ball.
In many companies we talk to and survey, HR corrals the I-9
process and owns the proper completion and retention of
the I-9 form. If that’s the case in your company’s situation,
that’s even more reason to automate the process as much
as possible. Otherwise, if you don’t rely on HR technology,
your HR teams (and anyone who assists with I-9) better be
well trained and understand anti-discrimination practices.
They should know the federal guidelines around the I-9
process, and be familiar with the M-274 Guidance for
Completing Form I-9 handbook. Hiring compliance needs
leadership because the proverbial devil is in the details. For
example, employees who telecommute must still complete
Section 1 of the Form I-9 and have their identities and/
or work authorization documents reviewed in person by
HR. And that’s only the beginning. That’s why you should
conduct an annual self-audit to help ensure continued
compliance with I-9 and E-Verify rules. (For starters, see
Paycor’s I-9 checklist.)
PART 2
How Paycor Helps:
HR Onboarding
HR Support Center
8

12. PAYROLL
COMPLIANCE
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13. PAYROLL COMPLIANCE
(FLSA, EPA, WORKERS’COMP)
Broadly speaking, payroll compliance makes sure employees are
paid and treated fairly. There are a lot of federal laws to keep track of,
and state and local tax codes add more complexity. That’s why it’s
important to have a process in place to consistently apply pay policies,
accurately calculate Fair Labor Standards Act (FLSA) overtime and
streamline administration of Family Medical Leave Act (FMLA) and
other leave policies. If you don’t and your company is audited or sued,
you won’t have the proper controls in place to quickly provide accurate
records and audit trails.
PART 3
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14. Who does it affect?
• FLSA: Employers in the private sector and in federal, state and local
governments fall under its umbrella. FLSA establishes minimum wage,
overtime pay, recordkeeping and youth employment standards.
• EPA: The Equal Pay Act (EPA) dictates that men and women in the same
workplace receive equal pay for equal work. Every employer in the private
sector and in federal, state and local governments are required to comply.
• Workers’Compensation Insurance: Every state, as well as the federal
government, has a Workers’Compensation program (though some are
state-run and others are offered by commercial entities). Workers’Comp
provides compensation to employees who experience injuries or illnesses
on the job.
Potential penalties:
• FLSA: Fines vary in size, but a few big cases made headlines including
that of FedEx, who paid $240 million in back wages for unpaid overtime
because of a classification error that affected 12,000 employees. FLSA
compliance is important, especially since the vast majority of fines are big
enough to hurt, but small enough not to contest in court.
• EPA: EEOC filings of wage discrimination more than doubled, rising to 184
lawsuits in 2017 from 86 the previous year, while settlements spiked nearly
ten-fold, from $52.3 million in 2016 to an incredible $485.25 million in 2017.
• Workers’Comp: The cost of workplace class-action settlements rose
steeply in 2017, according to the 14th annual Workplace Class Action
Litigation Report published by the Seyfarth Shaw law firm. The top ten
settlements totaled $2.72 billion — a pretty startling surge from $1.75
billion in 2016. Discrimination, employee benefits and wage and hour
claims were among the top actions.
PAYROLL
COMPLIANCE
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15. What you should know:
Watch out for employee classification mistakes.
Employers with the very best intentions can improperly
classify workers as FLSA exempt and then fail to pay the
overtime wages they’re due, leaving themselves open to
penalties and lawsuits. For example, as more companies
move to at least partially embrace the gig economy, they
deal more than ever with independent contractors or interns.
Gig workers aren’t entitled to employment benefits such as
minimum wage or overtime pay. If some of your employees
are misclassified as independent contractors, and don’t
receive those benefits, your company could be in hot water
when it comes to compliance. It’s important that your HR
team periodically audits your employee database to make
sure everyone is appropriately classified, especially if you don’t
have a trusted HR platform in place that does much of that
classification for you.
There are no shortcuts or workarounds for pay equality.
The EPA dictates that men and women in the same workplace
receive equal pay for equal work. The jobs don’t have to be
100% alike, but they do have to be substantially similar. Job
content, not title, is the determining factor to test for job
equality. The EPA covers all forms of compensation, not just
salary: overtime, bonuses, benefits packages, stock options,
vacation pay and reimbursement for travel expenses. If a
wage inequality between men and women is discovered,
you cannot reduce the wages of either party to equalize pay.
Ask your broker about Workers’
Compensation Insurance.
Ideally, you’ll want to talk to your broker about your
company’s Workers’Comp obligations. As each state
has different rules to abide by, it’s important for your
organization to keep up-to-date on any changes, especially
if you have offices in multiple locations. The most common
examples of employer violations include failure to file or
accurately complete forms and failure to pay the correct
benefits to injured or ill employees in a timely fashion.
PART 3
How Paycor Helps:
Payroll Time
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16. PEOPLEMANAGEMENT
COMPLIANCE
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17. PEOPLE MANAGEMENT
COMPLIANCE
(OSHA, FMLA, COBRA, SEXUAL HARASSMENT)
We think of“people management”compliance as a cluster of
regulations that govern the day-to-day working lives of your team.
Occupational Safety and Health Administration (OSHA) assures safe and
healthful working conditions for employees by setting and enforcing
workplace safety standards and by providing training, outreach,
education and assistance. FMLA is a federal law that provides medical
and maternity leave rights to eligible employees. COBRA is covered
under the Employee Retirement Income Security Act of 1974 (ERISA)
and relates to continued health care benefits after an employee
separates from the company. And sexual harassment, broadly defined,
falls under the purview of the EEOC.
PART 4
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18. Who does it affect?
• OSHA: Businesses with more than 10 employees.
• FMLA: Companies with 50 or more qualified employees on the
job 12 months.
• ERISA – COBRA: Companies with 20+ employees that offer a
group health plan.
• Sexual Harassment: Any business can be at risk for a sexual
harassment claim.
Potential penalties:
• OSHA: There are six specific categories of violations. The most serious is a
willful violation. The minimum penalty for each willful violation is $12,934
and the maximum fine is $129,336.
• FMLA: If your company loses an FMLA case, you can be required to
provide back pay, actual money lost by the employee and fines by the
DOL’s Wage and Hour Division.
• COBRA: General notices must be distributed within the first 90 days of
coverage. Election notices, which describe employees’rights to COBRA
and how to make an election must be provided to employees within 14
days after receiving notice of a qualifying event.
• Sexual Harassment: Sixty-three percent of harassment lawsuits filed
in 2017 included sexual harassment claims.* These claims can result in
enormous settlements or jury verdicts.
*Employment law firm Littler
PEOPLEMANAGEMENT
COMPLIANCE
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19. What you should know:
Good communication is the foundation of
“people management”compliance.
The penalties, fines and settlements associated with
people management violations can be devastating to your
company. Your HR team’s Employee Handbook (you have
one, right?!) not only communicates FMLA, OSHA and
EEOC entitlements and obligations to employees, but is
also useful in demonstrating that your organization strives
to be compliant. For example, if your employee is called
away to active-duty military service, HR needs to make
sure they understand their rights and obligations when
communicating their reason for taking leave. Your Military
Leave Policy should clearly define these parameters to the
employee. Similar policies should communicate rights and
obligations regarding state disability leaves, federal FMLA
leave and other government mandates. (Note that FMLA
regulations are separate from your company’s sick leave
policy. Even employees who are not entitled to company
paid-time-off may be eligible for FLMA relief.)
FMLA also has strict notification requirements, which is
another communication challenge. In addition to displaying
the mandatory FMLA poster and notifying employees of
their rights and responsibilities, you must also provide a
written notice of this information within five business days
of an employee requesting FMLA leave. You must then
allow at least 15 calendar days for the employee to submit
a completed certification form. Within five business days
of receiving the certification form, you must provide a
company response form indicating whether or not the
request has been approved.
Federal law also requires the OSHA poster (and/or the state
plan equivalent) to be hung in a prominent location within
the workplace.
PART 4
How Paycor Helps:
HR Payroll
HR Support Center
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20. TALK TO PAYCOR
We’re proud to keep more than 30,000
organizations informed about and compliant
with federal and state laws and regulations.
For nearly 30 years, Paycor has maintained
a core expertise in payroll and compliance.
We established our compliance expertise in
the Cincinnati tri-state area, one of the most
complex tax jurisdictions in the country,
so we’re able to handle payroll and tax
complexities in a way our competitors can’t.
Next Steps:
VISIT PAYCOR.COM
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