HR Compliance Beyond the 1099

Worker-Compliance-Beyond-the-1099-1.jpgYears ago, navigating whether or not a worker could be classified as a 1099 contractor was your only concern. No doubt, it’s an important question. The IRS, DOL, and other state and local agencies have investigated and fined companies for violating these rules. Keeping on the straight and narrow path with 1099 status is no longer enough.

HR Compliance and Risks In The News

If you have been heads down in your company’s affairs, you may have missed some of the new developments in worker compliance. These news items will give you a sense of what’s happening in the world of HR and benefits:

Racial Harassment Is Back In The News.

HR Compliance

A nurse of Chinese descent has received approval from the U.S. Circuit Court of Appeals to pursue claims against the Cleveland Clinic Foundation in 2017. Of particular note: the employee’s claim was first dismissed because the person was suspected of attempting to avoid discipline. That was a costly mistake. (Source: SHRM)

Employee Claims Beyond The Grave?

HR ComplianceA construction worker’s estate has lodged a disability discrimination lawsuit under the Americans with Disabilities Act (ADA). This case serves to remind us that resolving claims can take years and may continue even if an employee passes away. (Source: SHRM)

Made A Mistake With 1099 Status?

HR ComplianceMaking a mistake in your company’s IRS filing may be less onerous. According to IRS Notice 2017-09, you have the opportunity to make 1099 corrections and avoid penalties in the case of a mistake. Of course, this option is only valuable if your HR compliance program is operating effectively. (Source: Accounting Today)

As the IRS announcement shows, new opportunities and threats in managing employee benefits can occur at any time. That’s why it pays to periodically assess your HR programs to see if your current risk management program is complete.

How To Assess Your HR Compliance Program In 4 Steps

There’s a lot to lose if your HR programs and management violate these regulations. Aside from the fines, violating these rules also damages your brand as an employer of choice. That means recruiting the best candidates will become more difficult. Constant worker compliance problems also make life unpleasant for the HR department. Instead of waiting for an issue to explode, use these steps to assess the effectiveness of your HR compliance program.

1. Documented Processes

Review your current processes such as on-boarding, off-boarding, orientation/training, administration of benefits, and more. Are these processes currently established and effective at your organization? If not, it may be time to consider engaging a third-party vendor that can take on these legal and administrative duties, leaving you to focus on your core business.

2. Program Reviews

Has your HR compliance program been reviewed to determine if it is up to date with all requirements (e.g. industry specific, federal, state and others)? As a general rule, an annual program review is a recommended frequency to detect gaps and refresh your program.


If you have a Microsoft SharePoint internal website or other intranet resource, you can easily identify documents by the date they were last updated. If you’re unsure how to do this, contact your organization’s IT Help Desk.

3. Internal Training

Do your managers and staff know their obligations and rights for HR compliance? When was the last time you held an internal workshop or educational session to inform your staff? Take the time to explain complicated terms and concepts in such a way that your managers can easily put the ideas into action.


Self-serve training such as websites, PDF downloads and recorded webinars can be useful to prepare as background to a live session. The main drawback to self-serve training materials is the difficulty of providing evidence that staff attended the session.

4. Evidence of Compliance

If you have ever been audited, you know the importance of having evidence to demonstrate your organization is in compliance. Common ways to gather evidence include distributing letters to managers and requesting that they return a signed and dated copy attesting that they read and understand their obligations.


Keep these records in a secure location so that you can easily produce them if requested by an audit, law suit or other investigation.

Sharpen Your HR Risk Management Skills at the SHRM-Atlanta Conference

To protect your company from risks and uncertainty, a few hours attending the following seminars at SHRM Atlanta could save your organization an expensive lawsuit:

Protecting Your Business in 2017 & Beyond: Employee Benefits Compliance

Led by employee benefits consultants Suzannah Gill and Carl Pilger, this seminar offers a great refresher on key compliance requirements for employee benefits. You will also walk away from the event with a checklist so that you can “self-audit” your compliance program.

A Best Company’s Guide to Handling Harassments Allegations

Imagine receiving an email from senior management next week with the subject “Prep for Harassment Lawsuit.” That’s the kind of nightmare scenario that you can avoid by attending employment lawyer Greg Hare’s seminar. You will find out how to write anti-harassment policies that make a difference. Over and above documentation, this seminar also gives you clues on how to spot harassment behaviors and address them professionally.

Avoiding Risk While Using Advanced Selection Techniques: The Challenging World of Pre-employment Testing and Big Data Analytics Used as Selection Tools

If the U.S. Equal Employment Opportunity Commission checked on your company’s hiring processes, what would they find? Unconscious bias, “hiring in your own image” and company tradition are some of the reasons why your company’s hiring practices may need to be refreshed. Gavin S Appleby, JD and Dionysia Johnson-Massie, JD present their advice on how to hire with digital tools without taking on legal risk. You will also discover best practices relating to pre-employment testing methods.

For more ideas on how to ensure your organization’s compliance, check out our on-demand webinar: “Everything you Need to Know About a 1099.” Also be sure to stop by and see us at nextSource Booth #217 at SHRM-Atlanta!

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