Among the most overlooked legal requirements of new and smaller businesses are federal and state labor law posters. In fact, research shows that upward of 80 percent of companies are noncompliant and at risk for court actions and civil penalties potentially costing tens of thousands of dollars. If you own or manage a payroll service bureau, adding labor law poster compliance to your core services can help elevate your reputation among customers and boost your revenues.
Believe it or not, there exists over 2,000 different types of labor law posters in the United States, all designed to clearly and quickly explain employees’ rights and employers’ responsibilities. Federal law requires six separate postings for businesses with 50 or more employees, five for smaller firms. State laws can require up to 14 others depending upon a company’s size, location, industry type if they perform any government work.
Even microbusinesses are subject to labor law poster compliance. In fact, every business with at least one employee is required to post all state and federal labor laws and regularly replace those posters as laws and policies are changed. Full compliance requires the poster to be displayed in clear view in locations frequented by every employee such as in a break room, lounge, conference room or near a time clock. Eight states require businesses to display labor law posters in both English and Spanish.
Worth the hassle?
Many new companies start off in compliance but fail to keep up. It’s no wonder. A typical year brings two federal labor law updates and up to five on the state level for the average company. All total, there were 80 required state posting updates last year and more than 400 since 2013.
Keeping track of mandated posting updates can prove time consuming, but understanding the financial risks makes compliance worth the hassle. Among the most common penalties:
- Fines of $166 per offense for failing to display FMLA posters
- Fines of up to $534 per violation for failing to display the Federal Equal Employment Opportunity poster
- Fines of up to $7,000 per violation for failing to display the US Occupational Safety and Health Administration (OSHA) poster or $1,000 for the Cal/OSHA
- Court actions and civil penalties of up to $10,000 brought by the US Secretary of Labor for failing to display the Federal Employee Polygraph Protection Act poster
- Court actions and civil penalties for failing to display the Migrant and Seasonal Agricultural Worker Protection Act (MSPA) poster
Of course, the government does not employ a “poster police” to drop in, unannounced, for inspection of your posters. However, if a government official, such as an OSHA or Department of Health inspector, should visit your business they do possess authority to check for poster compliance. Or, if a business must defend itself in an employee-filed lawsuit involving any labor practice, poster law compliance will certainly become a consideration.
Positive Bottom Line
Helping clients avoid steep fines isn’t the only reason to facilitate compliance with labor law poster requirements. In fact, payroll service bureaus enjoy two primary benefits.
First, educating your clients about poster requirements and other legal issues helps to elevate you as a trusted advisor – and that trusted advisor status helps to assure both client loyalty and new client referrals.
Second, providing labor law posters can easily generate a 5-figure revenue boost. For example, partner with a company such as PosterElite. The Poway, CA-based company specializes in consolidating all mandatory state and federal labor law postings on one attorney-approved poster that can be private-labeled with your clients’ company name, logo, telephone number and web address. Offering this added value to your clients as part of your core payroll services can generate roughly $7/company/month in additional revenue. Many payroll service bureaus generate over $30,000 incremental revenue per year by simply providing their clients labor law posters.
Compliance never felt so good!
This blog post is authored by Jim Myers, owner of Capital Payroll Partners located at 3200 Lauderdale Drive in Richmond, VA. Jim can be reached at (804) 364-7220 or email@example.com