ClubPay Blog


Why it is Vital to Audit Your Club’s Pay Policies

Jun 4, 2014 12:43:00 PM

One of the most pressing concerns stated by Club Management is Human Resource issues. Often times Clubs either cannot afford internal HR resources or are unable to devote the administrative time needed to understand their exposure risks and implement the required changes to Club Policies in order to be fully compliant with the latest mandates.   Now, due to DOL’s increase of enforcement to conduct targeted Wage and Hour investigations within the hospitality industry; EEOC may simply call or show up at your Club’s doorstep, without charge, and request your policy and pay practice information.

What has changed?

What’s driving the HR Outsourcing trend for the Club Industry …  As the government regulation/mandates rise combined with their public education efforts on employee rights, so have the number of class action lawsuits risen against the hotel and hospitality industry.  Currently, due to the indication of widespread violations within the industry, the DOL has authorized an increase of enforcement to conduct targeted Wage and Hour investigations.  Pressure from political influences, increased tax revenues, unemployment, increased regulation and litigation, has created an ”HR Perfect Storm” for private clubs. 

Club Management's approach to HR administration can no longer be “if” we’re investigated and instead, needs to be "when" an investigation occurs, how to respond? 

Why all the hype about HR Strategy now, when it hasn’t been an issue… The EEOC’s new guidance is technically not a fundamental departure from a decade ago; the key difference is under the current administration’s emphasis on employment related federal law and regulation. EEOC is now able to take a stronger stand on enforcement and has identified a number of new “emerging issues” to include enforcement of.  As the EEOC closes in on the half-way point of its 2012-2016 Strategic Enforcement Plan (SEP), it shows the agency has met some of the performance measures, but fell short on others, signaling that the agency may double-down in its 2014 enforcement efforts to make up for the goals its missed.

The EEOC means business; by the end of the FY 2013, the EEOC had launched 300 systemic investigations resulting in 63 settlements or conciliation agreements that recovered approximately $40 million.  They continue to make strides to achieve the agency’s stated litigation docket goal to ensure that systemic cases make up 22% to 24% by 2016. Systemic suits comprised 16% of all merits filings in 2013, and by the end of the year represented 23.4% of all active merit suits; the largest proportion since FY 2006. The EEOC also obtained the highest level of monetary relief ever obtained by the Commission through the administrative process, securing $372.1 million in monetary benefits based on the resolution of administrative charges.

How EEOC is meeting their Strategic Enforcement Plan Goals…With a multifaceted effort to aggressively target employer policies for potential “Disparate Impact” and a broad range of “emerging issues”.  One example of EEOC’s new enforcement program is pursuit of its authority to enforce the Equal Pay Act that specifically empowers the EEOC to conduct “Directed Investigations”.   This means, EEOC can conduct an audit of employer pay practices without having to wait for a charge to be filed to investigate alleged Title VII violations; EEOC may simply call or show up at your Club’s doorstep and request your policies and pay practice information.  These audits open the door for them to seek other potential “systemic” or “disparate impact” problems to investigate further.  

Because of EEOC’s renewed focus on facially neutral employer policies that may have a “disparate impact” on protected classes of employees; it is prudent for Club Management to be thoroughly reviewing and auditing your Club’s policies and pay practices with an HR or Employment Law Professional.

How can HRO help?

The vast majority of Clubs opt for an “outsourced” strategy to relieve administrative burden, gain expertise and prevent liability. Clubs need protection more than a large company, yet many times either cannot afford the internal HR resources or aren’t really aware of their true exposure as an employer.  Given the trend towards Club Controller’s taking on increasing HR related responsibilities, and due to the current, sometimes confusing Federal and State employment regulations being imposed, an HRO approach has accelerated as a popular choice for Clubs “doing more for less”.  Even the most efficient employers are unable to devote the time required to make meaningful changes to Club policies and procedures.  Partnering with an HR Outsourcer helps an employer achieve relief.  Other reasons to outsource include:

  1. Access to outside expertise.
  2. Remain up-to-date with rapidly changing employment environment.
  3. Eliminate high volume of low-value transactional activities.
  4. Reduce management distractions away from core business.
  5. Leverage existing staff to focus on key competencies.

Partnering with an HR Outsourcing Service can help mitigate HR issues but also, can offer greater budget flexibility and control.  Club’s now have the flexibility to pay for HR service in areas they need and professional HR expertise when they need it.

Our HRO Service… We assist each ClubPay HRO client with an initial assessment of their current HR practices and procedures to ensure we work as a partner for future growth.  To address the diverse needs of each Club HRO client we start the assessment with a custom employee handbook and build from there to determine what, if any future advanced HR support will be required.  Our HRO platform ensures that every client receives not only compliance protection, but also provides an opportunity to take advantage of our advanced Club HR Consulting services.

The time to consider an HR Strategy at your Club has passed; now is the time to implement an HR Strategy!

Are there aspects of your Club’s existing HR practices that are unsatisfactory or could benefit from improvement?  

Contact us for an HR Analysis today!

For a full list of ClubPay's HRO Services, View Brochure Here

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