WEBINAR SERIES HUBZONE CONTRACTORS NATIONAL COUNCIL

Transcription

1 WEBINAR SERIES HUBZONE CONTRACTORS NATIONAL COUNCIL hubzonecouncil.org 1 Human Resources Compliance for Small Business Government Contractors Presented by TechScribe Communications, LLC, an Acquisitions, Proposal, and Compliance Consulting Firm Specializing in Working with Small Businesses July 29, hubzonecouncil.org 1

2 Human Resources Compliance for Small Business Government Contractors There are more than 7.4 million employers in the U.S. Most of these employers (82%) have less than 200 employees. In these small businesses, the HR team is often double tasked with other customer-facing program duties. As a result, the company s size and lack of resources can sometimes make it harder to stay abreast of HR compliance issues, in the rapidly changing small business/government contractor landscape. Today we will discuss the top small business HR compliance issues you should track closely for your HUBZone firm. 3 Top Compliance Issues 1. HUBZone Employee Status 2. Business Ethics and Voluntary Disclosure 3. Security Training and Reporting to Government 4. Employee Misclassification 5. Wages 6. I-9/Department of Homeland Security 7. Social Media 8. Health Insurance 4 hubzonecouncil.org 2

3 Employee Status Compliance HUBZones must be: A small business according to the size standards based on the North American Industry Classification System (NAICS). At least 51% owned and controlled by citizens of the United States (or a community development corporation, an agricultural cooperative, or an Indian tribe). Located in a designated HUBZone area (principal office). Comprised of at least 35% of the firm's total workforce who reside in a designated HUBZone area. The reside requirement means they live in the HUBZone primary residence for at least 180 days with the intention to be there indefinitely. 5 Employee Status Compliance To maintain compliance with the 35% employee requirement, it is important that you build into your processes a monthly or even weekly - status review, depending on the size of your business. Insert it as one of the action items on the routine all-hands Monday morning leadership briefings. Add on your employee out-processing form, a line item check box/signature field/affirmation that the HR rep has consulted with your business leadership team to assess whether the status of the person who is leaving will impact the 35% requirement. Because the balance is so important, leadership should be heavily involved in these compliance matters. 6 hubzonecouncil.org 3

4 Employee Status Compliance Develop and refresh regularly, a very simple database or spreadsheet of candidates who live in the HUBZone area, and are both able and interested in performing the work of each of the current 35%-designated employees. Perform this analysis for every labor category in your firm, just to be on the safe side. This Ready to Go list of employees means that as one of the HUBZone employees leaves, you can immediately backfill the position, without t jeopardizing i your small business designation. 7 Employee Status Compliance Notarized proof of HUBZone employee residency compliance issues relating to: Students No Physical Address Available No Voter s Registration Card Overseas post 8 hubzonecouncil.org 4

5 Business Ethics and Voluntary Disclosure Compliance FAR Case , 006, Contractor Business Ethics Compliance Program and Disclosure Requirements, which gave rise to the mandatory disclosure requirements that govern your contracting business today. Office of Federal Procurement Policy Assistant Attorney General required that the, FAR be modified to require contractors establish and maintain internal controls to detect and prevent fraud in their contracts, and that they notify contracting officers without delay... rather than wait for its discovery by the government. Language is based in part on the Sarbanes-Oxley Act of 2002, which required greater fiscal controls over government entities (i.e., Fannie Mae), and contracts. 9 Business Ethics and Voluntary Disclosure Compliance Any contractor with contracts that involve any portion of the FAR (c) clause (mandatory disclosure, ethics, compliance), including small business concerns must have a written code of business ethics and conduct and must make it available to all employees within 30 days of contract award. Small business best practices include providing business ethics and voluntary disclosure training i to your employees annually and having them sign an attestation that they received and understood the training. 10 hubzonecouncil.org 5

6 Business Ethics and Voluntary Disclosure Compliance Within 90 days of contract award, any contractor with contracts that involve any portion of the FAR (c) clause, must also have a formal ethics and awareness compliance program and internal control system (i.e., to deter or detect bribes, kickbacks, etc) that is reviewed and approved by the government. All of this applies to employees on contracts with a value of $5 million or more, and a duration of 120 days or more 11 Employee Security Refresher Training Compliance All contractors with cleared personnel must have them complete the annual security refresher training. This training i is intended d to remind contractors t and their employees of their personal responsibilities and liabilities under the U.S. espionage and sabotage acts (i.e., lifelong protection of classified information, etc). The training also reaffirms security policies and procedures, in alignment with Title 18 (criminal/penal penalties) and Title 50 (national security/war defense). Small business best practices include having each employee sign an attestation that they took and understood the training. Keep these in each employee s HR file. 12 hubzonecouncil.org 6

7 Employee Classification Compliance Proper classification (i.e., employee, independent contractor, full-time, temporary) will help you make sure the employee receives the benefits to which h he or she is entitled (i.e., medical leave, overtime, minimum wage, and even Social Security accrual). Proper classification also makes sure the IRS, Social Security Administration, Medicare, state unemployment commission, etc. all collect the proper tax/revenue from the workers in your firm. You don't want to be cited or underpayment of proper taxes, etc for failure to comply with proper employee classification reporting. Review employee classification matters on a monthly basis. 13 Wage Compliance Pay at least minimum wage, which is currently at $7.25 per hour at the Federal level. Please note that the state and county that houses your firm may have efforts underway to raise the pay rate, which h will impact businesses. Watch these developments closely, as they may impact you (i.e., government contractors may be required to pay $15.00 per hour, based on the locale). Watch closely, and comply with regulations regarding employee gender wage discrimination issues. You must provide equal pay for equal work. The Office of Federal Contract Compliance programs is auditing contractor s records to assess pay parity. Further, they require you to submit important compensation data so that they can use it to lower pay discrimination. Employee wage compliance is critical. 14 hubzonecouncil.org 7

8 I-9/Dept. of Homeland Security Compliance Make sure your employee s I-9 forms are properly completed. Many people erroneously think this matter applies only to illegal or non-citizen employees, and that if contractors are working within the DoD or national security sectors, that the I-9 issue is not relevant to them. Nothing could be further from the truth. The Department of Homeland Security Immigration and Customs Enforcement, among other things, conducts audits of government contractors to make sure you have completed your I-9 forms properly. In this age of increased security measures, and the government wanting to know exactly who is in the country, this is a huge area where many large and small businesses are being cited, sanctioned, and prosecuted for not complying. Check the I-9 forms very carefully before submitting them. 15 Social Media Compliance Create and communicate a fair, easy to understand social media policy for employees. Make sure they do not post proprietary p or detrimental information about the company, its employees, contract awards, etc. online. Have employees review and sign a copy of the social media policy that outlines the job-related and legal risks that they face, if they violate the policy. Provide social media training (i.e., a ½ hour brown bag lunch) annually. 16 hubzonecouncil.org 8

9 Health Insurance Compliance Many small businesses find it difficult to pay for traditional health insurance plans for their employees. As a result, many of these businesses instead reimburse employees for their premiums. It is important to check with your accountant and other business advisors to make sure your plan is compliant with current health reforms. Failure to do so could result in fines and penalties from agencies such as the IRS. Make the healthcare compliance review a regular part of your yearly tax/business operations analysis with your advisory team. 17 Recap Make compliance assessments and reviews a part of the normal battle rhythm of your business processes. Engage company leadership on all compliance matters, particularly those that can impact your standing as a HUBZone (i.e., the 35% employee residency requirement). Be hyper vigilant about formerly minor administrative issues, such as the I-9 forms. These small details have increasingly caused big headaches for large and small businesses alike. Reach out to the HUBZone Council if you need help with any compliance matters. They can point you in the right direction. 18 hubzonecouncil.org 9