With a new U.S. presidential administration still in its early stages, there are likely to be upcoming regulatory changes that could affect your organization’s compliance strategy. What should you be doing now to prepare for potential changes, and how should you plan to manage compliance once changes take effect? There’s no room for error when adhering to compliance rules — especially those associated with the Fair Labor Standards Act, paid sick leave, and joint employer regulations. By investing in fully automated workforce management processes rather than having a hodgepodge of manual and partially automated solutions, organizations can better predict risk, provide solutions to mitigate existing risk, and create effective communication to employees of pending or existent changes labor laws and regulations — enabling them to minimize risk, improve productivity, and enhance employee engagement. Cliff Stevenson, principal analyst at Brandon Hall Group, will be joined by Kronos® Director of Product Marketing Kristen Wylie to outline how your organization can build a stronger compliance strategy. You’ll get valuable information on: How your organization’s level of readiness compares to that of your peers amid changes in administration and policies Minimizing risk through technology and automation Finding your organization on the compliance climate matrix and learning real-world next steps

1. Preparing for Compliance Changes
Under a New Administration
Sponsored by:
Cliff Stevenson,
Principal Analyst,
Workforce Management,
Brandon Hall Group
Kristen Wylie,
Product Marketing Director
Kronos

2. HCM Research and Advisory Firm
2
FOUNDED IN 1993
Community of 300,000+
10,000 Global Clients
Leading Independent HCM
Research & Analyst Firm
Publishing 2+ Pieces of
Research Each Day
Sample of Our Clients
© Brandon Hall Group 2017

3. How We Help You
© Brandon Hall Group 2017 3
MEMBERSHIP
STRATEGIC
CONSULTING
EXCELLENCE
AWARDS
PROFESSIONAL
DEVELOPMENT
Learning & Development
Talent Management
Leadership Development
Talent Acquisition
Workforce Management

4. Agenda
4
What’s the objective of today’s presentation?
What study or key findings will be presented?
What case study or use case will be discussed?
Will there be tips on how to get started? Or key takeaways that I
can use?
© Brandon Hall Group 2017

5. © Brandon Hall Group 2017 5
What’s the
Deal With
Compliance?

6. POLL 1: How Do You Expect Compliance
to Change in 2017?
1. I think there will be less regulation than we have now
2. I think there will be the same amount of regulation as we
have now
3. I think there will be more regulation than we have now
4. We might as well consult a Ouija board
© Brandon Hall Group 2017 6

7. Expected changes to regulation
• Repeal of ACA possible, but not likely
• Most are stating a “fix” over “remove” strategy
• Ironically, this may lead to more regulation, especially at the
state level
• New (2016) FLSA under temporary injunction, Congress last
heard testimony on February 16, 2017
• New DOL head to be sworn in
• Best guess: there will still be a salary test, it may (read : will) be different than
current/frozen FLSA rules
© Brandon Hall Group 2017 7

8. What is Your Estimated Compliance Risk?
© Brandon Hall Group 2017 8
Source: Instructure, 2016, n=2,246
14%
56%
17%
13%
We have no compliance risk We have small amount of compliance risk
We have a moderate lievel of compliance risk We have a large amount of compliance risk

9. Has Your Organization Ever Undergone
a Compliance Audit?
© Brandon Hall Group 2017 9
48%52%
No Yes

10. How Often Do You Review Government, Union or
Other Regulations that Affect How you Pay Your
Employees?
10© Brandon Hall Group 2017
12%
5%
19%
9%
23%
6%
18%
8%
Monthly Bi-monthly Quarterly Semi-annually Annually/once
per year
Less than once
per year
Ad hoc We have never
internally
assessed
compliance
0%
5%
10%
15%
20%
25%

11. Greatest Challenges Organizations Face When
Keeping Up with Regulatory and Compliance
Changes
11© Brandon Hall Group 2017
37%
25%
40%
38%
20%
21%
23%
Current technology systems are inadequate for compliance tracking
Lack of funding/budget
Lack of employee resources for data collection and tracking
Incomplete understanding of compliance regulations
Lack of support from senior leadership
Resistance to new processes from line-level managers
There are no major barriers to compliance
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

12. Do You Outsource?
12© Brandon Hall Group 2017
74%
3%
13%
10%
No, we do not outsource compliance Yes, our compliance partner is slightly effective
Yes, our compliance partner is moderately effective Yes, our compliance partner is highly effective

13. Which Process Best Describes Your Organization’s
Compliance Reporting Capabilities?
13© Brandon Hall Group 2017
8%
52%12%
28%
We do not track compliance at all Semi-automated (some functions automated, some are not)
Automated throughout organizations Manual

14. Which of the following features is most important
in compliance technology?
14© Brandon Hall Group 2017
8%
16%
17%
18%
19%
24%
26%
29%
34%
38%
56%
Push notfications (mobile)
Job coding
Cloud-based
Explantory text or video for new regulations
Time/hour tracking 35
Forced compliance
Integration with other HCM systems
Case management
Automatic updating
Advanced analytics
Document management
0% 10% 20% 30% 40% 50% 60%

15. Assessment
of Needs
15© Brandon Hall Group 2017

16. Compliance Decision Matrix
16© Brandon Hall Group 2017

17. © 2017 Brandon Hall Group 17
Compliance Decision Matrix

18. © 2017 Brandon Hall Group 18
Compliance Decision Matrix

19. © 2017 Brandon Hall Group 19
Compliance Decision Matrix

20. © 2017 Brandon Hall Group 20
Compliance Decision Matrix

21. Actionable Steps
HCM SOLUTIONS HELP MINIMIZE COMPLIANCE RISK

22. Compliance Concerns:
Challenges at Every Turn

23. Odds NOT in employers’ favor…
Source: https://dayshift.com/2016/01/04/flsa-minimum-wage-overtime-lawsuits-set-new-record-in-2015-filing-growth-continues/1352/

24. Source: https://www.dol.gov/whd/data/
Odds NOT in employers’ favor…

25. Source: David Weil, Measuring Real Impacts for Workers (February 2015), found at https://blog.dol.gov/2015/02/26/measuring-real-impacts-
for-workers/.
Odds NOT in employers’ favor…

26. $266 Million in Back Wages in 2016
Source: https://www.dol.gov/whd/data/

27. The HR Transformation Journey:
Optimizing the People Part of Your Business
Automated
•Paperless environment
•Standardize processes
•Disparate systems
Manual
•Paper and
spreadsheets
•Complex requirements
•Errors and fines
Strategic
•Integrated systems
•Attract, hire and
develop top talent
•Communication and
collaboration
Data-Driven
•Unified platform
•Actionable data
provides insight
•Measure the impact
your people have
•Employee engagement
and retention
One Unified Platform for the Entire Workforce
Compliance
Concerns
Centralized
Administration
HR is a
Business Partner
HR is a
Business Leader

28. ONE UNIFIED PLATFORM FOR YOUR ENTIRE WORKFORCE
CENTRALIZED POLICY ADMINISTRATION
LOCALIZED POLICY ENFORCEMENT
DETAILED AUDITING & TRACKING
Recruiting
Benefits
Human
Resources
Payroll
Leave
Scheduling
Time &
Attendance
Compensation
Performance

29. Automate Processes to Minimize Compliance
Risk
Timekeeping and Scheduling
• Centralized policy administration
− Managed by HR and Legal versus individual line
managers
• Flexibility around the globe
− Different rules in different countries
− Different rules in different states
− Different rules in different cities
• Need to centralize to effectively manage
• Exposed from a risk perspective if not automated

30. Supervisor Resolves
Discrepancies
Payroll Keys
Timesheets Into
Payroll System
Check Cut and
Distributed
Errors Reported
to PayrollPayroll
Flags Issue
Employee Data Gathered Using
Various Manual Formats
Supervisor Collects,
Calculates, and Approves
Various Timesheets
Reports After
The Fact – Done
Manually
Employee Errors
• Transcription
• “Buddy punching”
• Gaming rounding rules
Supervisor Errors
• Difficult to catch errors
• Preferential treatment
• Wrong interpretation of rules
• Wasted time on tedious work
System Errors
• Poor data validation
• Rules improperly applied
• Inability to flag problems
• Delayed reporting
A Breeding Ground for Errors

31. Scheduling Changes
Lack of
Efficiency
Poor &
Hidden Data
Numerous
Rules
& Requests

32. Scheduling is a Balancing Act
Demand
Labor Laws
Availability/Leave
Preferences Skills/Certifications
Policies
Costs

33. Use Your Technology to Understand Potential
Impacts
• FLSA Changes
− Do you know who has been impacted?
− Do you typically require these impacted employees to work over 40 hours a
week? How many hours do they actually work?
− If these employees typically work more than 40 hours per week then what is
your strategy?
• Pay overtime?
• Hire additional employees?
• Modify business metrics?
− How will you track their time?

34. Key Recommendations &
Questions

35. Key Recommendations
• Assess your organization’s readiness for regulatory compliance
• Determine which facets of compliance are putting your organization at risk
• Automate systems that were previously manual, beginning with the high-risk
compliance areas identified previously
• Compliance and automation do more than protect, they also create opportunity
for strategic decision-making (rather than reaction)
• Constant vigilance is required, even in the most robust of compliance
environments

36. © KRONOS INCORPORATED │ April 13, 2017 │ 36
Questions?
• Cliff Stevenson
− Cliff.Stevenson@brandonhall.com
− @clifforddarrell
• Participate in Brandon Hall
Surveys:
− For a complete list of surveys that you
can take, please visit our survey page
here.
− If you would like to join a panel of
survey takers, please contact us at
success@brandonhall.com
• Kristen Wylie
− Kristen.Wylie@Kronos.com