Ask any HR professional in the building service industry for their company’s three greatest workforce challenges, and labor compliance is likely to be on their list.
After all, BSCs manage a predominantly hourly workforce, which makes them subject to a battery of wage and hour laws on the federal, state and local levels.
And by definition, BSCs operate a distributed workforce. Distributed workers are harder to track and manage, making everyday labor compliance tricky. And because those worksites are typically spread across multiple jurisdictions, there are more rules to juggle.
Yes, it’s hard to keep up with it all—and employment law never stands still. Of all the labor compliance issues clogging your industry newsfeed, here are three every BSC should have on its radar right now.
Changing DOL Overtime Rules (It’s Getting Real!)
Paying overtime is an unfortunate fact of life in the building service industry (callouts and turnover, anyone?). Since 2016, the industry has followed the Department of Labor’s shifting proposals to raise the overtime salary threshold. Now, it looks like action is imminent.
The rule under consideration would raise the overtime salary limit to $679 per week—higher than the current $455 a week, but lower than the $913 proposed by the Obama Administration. For BSCs, this will likely translate to higher labor costs, as more hourly workers become eligible for overtime pay.
Should the new overtime rule become law (the 60-day public comment period ended in mid-June), it is expected to go into effect in early 2020.
How to Prepare: Now is the time to audit your workforce, identify which nonexempt workers would be affected, and estimate how much it might cost. You might want to consider reclassifying some workers from nonexempt to exempt status—after you weigh the pros and cons.
Independent Contractor Classification Lawsuits Increasing
If you rely on independent contractors to augment your permanent workforce, be mindful that more employers are finding themselves on the wrong end of misclassification lawsuits.
Part of the problem stems from the fact that there are multiple guidelines. Different governing bodies employ different tests for different uses.
For example, the DOL developed the six-factor Federal Economics Realities Test (often used to review FLSA claims). The IRS uses the 20-factor Right to Control Test (often the yardstick used to weigh unemployment and workers’ compensation claims). And several progressive states have adopted the so-called ABC Test, which makes it tougher to classify workers as independent contractors.
How to Prepare: If you don’t have a formal policy regarding the use of independent contractors, now’s the time to develop one—one that will satisfy every applicable test everywhere you operate.
Paid Sick Leave Laws on the Rise
To date, 11 states have enacted paid sick leave laws (PSLLs), along with nearly three dozen municipalities. Each law is unique in terms of who is covered, how and when leave can be used, and the rate at which it’s accrued.
For building service contractors, this presents dual challenges. For one thing, it’s an expensive benefit that many employers wouldn’t otherwise offer to hourly workers. For another, maintaining PSLL compliance across multiple jurisdictions is no small thing.
How to Prepare: Some BSCs have responded by developing a separate paid sick leave plan for each PSLL. Some have adopted one company-wide paid sick leave policy that incorporates the most generous features of all of them. And some have grouped similar PSLLs under a single policy, reducing the number of plans, but still maintaining multiple plans.
Each of these methods has plusses and minuses. If you’re using one of them, audit it regularly to make sure it’s working for you. Meanwhile, stay on the lookout for future PSLL laws—they’re coming.
Your Time and Labor Management System Should Help
A robust time and labor management system is one of the most powerful labor compliance tools at a BSC’s disposal. As it happens, EPAY’s time and labor system was designed for building service contractors and features all kinds advanced compliance safeguards? For example:
- EPAY’s scheduling system automatically flags accidentally-scheduled overtime, so managers can edit their crew’s schedule on the spot to keep labor costs down.
- Managers can set up text and/or email alerts to tip them off before workers cross into overtime—especially valuable once the OT threshold increases.
- EPAY’s flexible pay engine can correctly apply every state and municipal paid sick leave law, tabulating earned and taken paid sick leave correctly.
- All EPAY customers have access to a helpful HR compliance portal, so it’s easy to stay abreast of wage and hour compliance updates. They can elect to receive email alerts, too.
There’s a reason EPAY is the leading time and labor provider for the building service industry. See for yourself—watch our video case study for Capital Building Services Group.