Managing compliance

Mara Bergen and Kim Green saw the writing on the wall.

For nearly four years, Bergen’s Greenhouses had been using Sage HRMS Payroll to great effect. The CFO and HR manager of the Detroit Lakes, Minn.-based company agreed that the software package helped it become much more efficient with managing its payroll and benefits.

“It’s like another office employee, without the paycheck,” Bergen says.

But as 2014 drew near, Bergen realized that just having a payroll module wasn’t enough. The human resources landscape was changing, and even more changes were coming down the road.

“With all the changes to health care, we wanted to track that a little bit better,” Green says. “We do a lot of our open enrollment in February, so we wanted to get this started before all the health care changes really kick in in 2015.”

In November, Bergen’s Greenhouses expanded its Sage HRMS software to include human resources functionality.

Despite the rush to begin tracking benefits before February, the biggest challenge the company faced for HR, Bergen says, was immigration tracking. “I-9 paperwork takes up a lot of (Green’s) time,” Bergen says.

“We wanted to track things like vacation and OSHA incidents,” Green says. “And a big part of (adding HR) was the I-9 requirements for identification.”
 

Compliance becomes a requirement

For decades, greenhouse growers and the federal government basically had a handshake agreement on human resources: Growers could take care of things the way they always had, and the government would accept that growers simply do those things differently.

This agreement worked because of the unusual labor force needed to make the industry function, according to Marc Fowler, a Sage HRMS consultant. As the U.S. moved away from its agrarian roots over the last century, many Americans lost both the knowledge of large-scale horticulture at the ground level and the ability to work in sweltering conditions.

After Sept. 11, 2001, this relationship started to change. A spotlight shone on illegal immigration, and the federal government began to crack down on this potential security breach. Interestingly enough, changes imposed by the federal government weren’t initially directed at the horticulture industry.

“Growers weren’t being audited by the government,” Fowler says. “Companies like Walmart were being audited, so Walmart started auditing its vendors to make sure they were in compliance. Some greenhouses were getting in trouble with Walmart, and they didn’t even know they were in violation.”

With the recent downturn in the economy, many state and local governments have begun passing legislation to fill gaps in federal immigration laws, but that has put an unintended strain on the horticulture industry. Now, immigration is the number one HR issue with which growers are dealing, Fowler says. This is leaving many growers scrambling to comply, especially since the federal government turned a blind eye to the industry for so long.

“A lot of greenhouse growers don’t track HR,” Fowler says. “They think all an HR system does is track benefits, and most growers don’t provide benefits for their greenhouse workers, so they don’t think they need one. But it’s much more than that.”

Another compliance issue with which growers deal is seasonal employees, especially tracking hire dates, termination dates, and wages. Fowler says many growers do not realize they need to track all of this information.

“A lot of times, companies will get sued if an employee finds out that someone else in their same position gets paid a lot more,” Fowler says. “Or, why did this employee get four pay raises and this one didn’t, and they had the same evaluation.”

Any time an employee is terminated – especially seasonal employees – COBRA, unemployment compensation, and other documentation must be tracked.

“A lot of companies don’t understand that they better have their documentation together or their employee may be denied unemployment,” Fowler says. “If that happens, there may be an employee with a lawyer with a lawsuit on the other end of a phone call.”
 

New compliance pains

With the Affordable Health Care Act signed into law, there are now more issues to deal with in the coming years for HR compliance, Fowler says.

Greg Lafferty, the senior account manager with Practical Software Solutions, says he’s seen these issues hitting both the greenhouse industry, as well as traditional manufacturing. Many smaller manufacturing companies suffer the same human resource pains that family-run greenhouse growers do, Lafferty says.

“I recently spoke to a friend who owns a family-run manufacturing business started in 1947,” Lafferty says. “They had been able to pay for their employees’ health benefits up until this year. The employees are now having to pitch in. And next year, it’s already projected that their overall premiums are going to rise by 40 percent.”

Lafferty says this raises hard questions for the company: How will they be able to manage the cost-sharing? How will they manage who is enrolled? How will they be able to apply for reasonable cost deductions based on demographics and health concerns?

“And this is an organization that has less than 20 employees,” Lafferty says.

Bergen’s Greenhouses, on the other hand, has 80 full-time employees, which will triple when the spring season begins in earnest.

Fowler says a solution like Sage HRMS can help greenhouse growers stay compliant with all HR issues.

“Sage HRMS is going to track all employee documentation, and that’s a big thing,” Fowler says. “When a worker comes in, the system is going to make sure they have the proper work authorization. It does visa tracking, and tracks when all documentation expires. It tracks hire dates, termination dates, and pay rates. A regular payroll system doesn’t track that level of detail. Federal I-9 forms and other documents are attached to an employee’s file, and that’s a big help when it becomes necessary to go back through all of an employee’s documentation.”

Fowler says the most important reason for needing to keep up with compliance is because of government audits. Several greenhouse growers have already been audited under this new era of federal oversight.

“Everything they need for HR, they need to do it because of audits,” Fowler says. “They may think they’re never going to be audited and when they are, it’ll be a mess.”

Bergen’s added Sage HRMS Payroll when it first installed the Grower Vertical module for Sage ERP in 2010. Although the entire Sage HRMS suite is integrated with Sage ERP, it also can run independent of Sage ERP software.

“We are always trying to be efficient in all areas of our business,” Bergen says. “Growing plants is the easy part; it’s really the record keeping that has become more detailed and necessary as our business also grows. By adding HRMS, it provides another layer of checks and balances. Our industry works very hard, so it’s nice to find tools to help us work a little bit smarter as well.”

For more information about Sage HRMS, contact Chris Nesbitt at Practical Software Solutions, 704-721-6800 ext. 3028 or cnesbitt@practicalsoftwaresolutions.com.

Amanda Tomaini is marketing director for Practical Software Solutions in Concord, N.C. Tomaini worked 10 years as a journalist before working in marketing. She comes from a long line of tomato farmers in Italy, and says she is proud to carry on the tradition in her home garden.