There are two government organizations that most small business owners fear - the IRS and the Department of Labor. The regulations are extensive and most business owners do not have the knowledge or time available to commit to fully understanding how all the regulations may impact their business. The NH Department of Labor hosts free seminars all across New Hampshire every Spring to help educate employers on labor laws. I was fortunate to attend one of these seminars earlier this month and I’d like to share with you the top ten labor violations in NH as presented at this seminar:
Failure to secure and maintain workers compensation (RSA 275:42 I & II and RSA 281-A)
Every employer who has any employees, full or part-time, is required to cover these employees with workers' compensation insurance written by a carrier. It does not matter if they are related, such as daughter, son, husband, etc. It also does not matter if the business is a "Non-Profit" organization. Sole-proprietors, partners and self-employed persons are not required to carry workers' compensation on themselves but may elect to be covered.
Failure to pay all wages due for hours worked (RSA 275:43, Lab 803.01)
Unless exempt by the Fair Labor Standards Act, overtime is paid to hourly employees at the rate of time and one half of the employees regular rate of pay for all hours actually worked over forty in any one week. An employer must pay all overtime even if the overtime was not authorized by the employer. In the event an employer has frequent unauthorized overtime, the employer should review their timekeeping policies and adjust accordingly to prevent unauthorized overtime.
Illegal employment of workers under 18 (RSA 276-A, Lab 1000)
The rules regarding workers under 18 is extensive. Some of the requirements include parental permission, no more than 6 consecutive days of work, no more than 30 hours of work while in school 5 days per week. Refer here for additional information.
Record keeping (RSA 279:27, Lab 803.03)
The employer must keep a true and accurate record of all hours worked and all wages paid each employee. These records must be kept for a minimum of a least four years . Electronic records are acceptable as long as the records are easily accessible.
Failure to provide written notice (RSA 275:49, Lab 803.03)
Employers must provide, in writing, an employee's rate of pay at the time of hire and upon any changes, as well as all policies pertaining to any fringe benefits. The employer must also maintain on file a copy of the written notifications for pay and fringe benefits, signed by the employee . The NH Department of Labor has created a template for small businesses here.
Failure to pay 2 hour minimum pay (RSA 275:43-a, Lab 803.03 (h), (i), (j))
An employee who reports to work at the employer's request must be paid for a minimum of two hours.
Employment of Undocumented Workers Prohibited (RSA 275-A:4-a)
Specific documentation is required for all new employees which includes an I-9 to verify the identity and employment authorization of individuals hired for employment in the United States. Click here for Form I-9.
Illegal deductions from wages (RSA 275:48, Lab 803.02 (b), (e),(f))
An employer is required to provide the employee with a written statement of all deductions, which may include taxes, insurance premiums, contributions to charities, legitimate deductions made from gross wages. Notification may be made through email as long as the Employee responds to the email as evidence of acceptance.
Failure to have a written safety plan (RSA 281-A:64 Lab 602.01, 602.02, 603.02, 603.03)
All businesses with 15 or more employees must file the NH Department of Labor Safety Summary Form, have a written safety and health program for employees, and meet quarterly to document Joint Loss Management Committee Meeting.
Failure to Pay Minimum Wage (RSA 279:21 Lab 803.02)
Minimum wage is $7.25 in New Hampshire effective September 1, 2008. Here is a link to additional information on minimum wage.
Small business owners need to remain diligent about these rules when making decisions regarding employees and should always keep written documentation to support decisions easily accessible in the event of an audit. The NH Department of Labor encourages businesses to contact them directly with any questions at 1-800-272-4353.