Part
01
of one
Part
01
Signature Issues - HR
Research suggests that HR (human resource) and administration departments at U.S. mid-size firms encounter several issues when employees do not sign HR documents on time. These delays often cause unnecessary offenses as per the nation’s employment laws. For instance, failure to comply with the regulation regarding Form I-9 could instigate a criminal offense, and hefty fines levied on the HR managers and staff. Find an elaborate research methodology below explaining the steps taken to uncover the information presented after.
METHODOLOGY
To retrieve details concerning the most common signature issues HR/Admin at mid-size firms in the U.S. face following delayed signing of HR documents and compliance with various employment requirements on time, we started by examining articles and reports published by reputable HR organizations and associations in the U.S. via sources such as SHRM (The Society for Human Resource Management) HR People & Strategy, Inc., and HR Leaders. We discovered that these sources and many more provided information regarding HR issues related to poor documentation and implications; however, these reports focused on general issues affecting both small and large businesses.
Next, we checked through HR business news forums to identify specific documentation issues highlighted for U.S. mid-size firms through sources such as Small Business Administration, Chron, CBIZ Inc., and Fit Small Business. We uncovered relevant and useful information but not specific to only medium-sized firms.
Third, we proceeded to examine business sites such as the Harvard Business Review, Forbes, HR Success Talk, and the Human Resources Management Website. Luckily, we found various compilations of information around HR documentation delay/compliance issues specific to U.S. small and medium-sized businesses.
Fourth, we tried to locate at least two relevant cases of mid-sized companies in the U.S. that have faced issues due to the delayed signing of HR documents. We studied a few examples of cases from companies such as Buffalo Transportation Inc. and Hartmann Studios; however, we found these cases lacking since they did not feature reliable information that accurately matches the requirements of the topic.
Therefore, based on the publicly available data, we adopted the following strategy to answer the query. First, considering the repetitive mentions across multiple credible sources related to HR news and business forums, we identified the five primary HR documents with compliance mandates that employees are required to sign. In this regard, we discovered that those documents include the non-disclosure agreement (NDA), employment agreement, IRS forms (W-4, W-2, and 1099), employee handbook, and the 1-9 tax forms. Further, excerpts from the searches conducted on the sources discussed above indicated that small and mid-sized businesses (SMBs) in the U.S. face recurring issues such as penalties, criminal offense, severance pay, and a notice of termination among other penalties because of delayed filling or violation or non-compliance with these HR and employment documents.
Overall, the issues included in the research are based on the fact that they directly relate to the delay in the timely filing of reports or violation or non-compliance with various employment rules and regulations. Moreover, these issues stem from documents that are mandatory for employees to sign them. The issues were also included because they are repeatedly mentioned across multiple credible sources. Lastly, these common issues pertain to all businesses in the U.S. including small and medium-sized businesses. Nevertheless, Balance Careers dictates that under the U.S. employment laws, organizations must comply with the following documentation — employee handbook; tax forms (I-9); FMLA records; employee personal file with a signed employee handbook, employment contract; and other reference documents.
1. 1-9 FORMS
U.S. businesses must comply with the regulation regarding Form I-9 as required by the U.S. Department of homeland security. Moreover, employees must also sign and submit citizenship and immigration services documents (USCIS), which verify employees’ eligibility for working in the U.S. Failure to sign and submit these documents could result in criminal offenses levied on the employers along with fines levied on managers, owners, and HR staff members. The gravity of the offense is well articulated via financial value in that, small and medium-sized businesses can face fines for Forms 1-9 violations from $110 to $1,100 per violation and $216 to $2,156.
2. NON-DISCLOSURE AGREEMENT (NDA)
U.S. employees are required to sign an NDA to be legally bound to not disclose any confidential information to external parties. The NDA is filed under the employees' personal files for audit and other legal purposes. Additionally, the agreement should specify its validity. Delayed signing or non-compliance of NDAs can lead to legal claims charged to the employee and loss of protection against proprietary information. According to research, small and medium-sized businesses in the U.S. that hire business owners and independent contractors potentially face the loss of proprietary information such as business plans, payroll information, and legal documents in case of a violation of the NDA. Besides, a breached NDA is often problematic to SMBs, especially if the prerequisite documentation is not signed and secured properly. In such cases, the audit teams investigate the breach by reviewing the original documentation before pursuing legal claims to protect company assets.
3. EMPLOYEE HANDBOOK
Employees agree to the terms and agreements of employment by signing the employment handbook. This documentation is important as the employees agree to the provision of the organization. However, there are numerous issues organizations and employees face due to delay or non-compliance with the employee handbook documentation, in particular, terminable offenses. While existing laws do not specify that it is compulsory to sign the document, failure to do so could be perceived as insubordination and therefore, a terminable offense. The company bears the most costs since it will have to recruit due to the termination. Research published by Gusto indicates that SMBS face the legal recourse and cost implications following incomplete, outdated, or not signed employee handbooks.
4. EMPLOYMENT AGREEMENT
In the U.S., all employees must sign the employment agreement document, which defines the employment relationship and lays down the conditions and terms of the job offer. The most common signature issue associated with delayed or non-compliance with the employment agreement includes notice of termination and severance pay. SMBs often encounter this issue and courts respond by imposing obligations on the company; therefore, it cannot claim the notice of termination and be liable for severance pay. Overall, the employment agreement documentation is crucial to any business since it protects the parties affected by any disputes arising in the future. Moreover, it allows the business the opportunity to negotiate the termination terms and payable claims to the employee following a breach of the agreement.
5. TAX FORMS
All types of businesses in the U.S. must record the W-4/W-2 and 1099 tax forms as per the IRS Federal employment regulations. Employers must also submit the forms by the last day of January. Failure to comply or delayed documentation leads to legal penalties, which can be greater than $5 million for three previous tax years or $75,000 for filing one month later. These fines are applicable for organizations that fail to mail the signed W-2 form inclusive of the social security number for each employee within the stipulated time. Medicare and social security taxes also attract hefty fines for late mailing of Forms W-2 on time. The fines range from 2% to 15% of the underpayment and depend on how late but can reach a maximum of 40% for extreme lateness cases.