- HR Compliance involves policies ensuring labor practices align with national, state, and municipal laws throughout the employment lifecycle.
- HR Compliance challenges include discriminatory job listings, unsecured documents, late new hire reports, misclassified workers, payroll errors, unfair pay practices, and inadequate health coverage.
- Consider using HR services providers like Worklogic HR to outsource HR functions and ensure compliance. Contact us today and get started!
It’s common to worry about obeying the law to avoid legal issues. Companies are no exception – they don’t want any complications when it comes to complying with regulations that protect their employees. That’s why they strive to stay up to date with HR compliance.
However, staying informed is not always easy, so we’re sharing important and updated information in this blog. We aim to help you stay current with HR compliance standards and best practices this year.
HR Compliance Definition
HR compliance refers to the set of policies, procedures, and actions implemented by a company to ensure that its labor and employment practices align with relevant employment laws and regulations. This includes compliance with national, state, and municipal laws.
The goal is to create a framework that spans the entire employment lifecycle, from policy creation and documentation to implementation, to ensure continuous alignment with legal requirements.
Critical aspects of HR compliance that you should keep in mind include:
- Legal adherence: Employers like you must follow applicable labor laws and regulations.
Non-compliance results in audits that may result in fines and penalties.
- Risk mitigation: It means reducing the risk of sanctions for non-compliance since this is increasing, and a judicial settlement could bankrupt your company.
- Scope of compliance: The larger the company and the more you operate in different locations, the more regulations you must comply with. In these cases, companies often look for ways to stay updated, such as outsourcing their HR or getting software to help them with personnel management.
- Proactive approach: Staying aware of regulation changes is critical. Your company must adapt to ever-changing HR compliance mandates to avoid adverse consequences resulting from non-compliance.
The Role of HR in Compliance
In a Thomson Reuters Risk & Compliance Survey, 80% of corporate risk and compliance professionals agreed that their organization views risk and compliance as valuable business advisory functions, making the importance of a capable HR team even more relevant.
HR plays a vital role in ensuring compliance with laws and regulations. HR leaders bridge the gap between company growth and compliance, particularly in recruitment, employee development, and retention.
Because compliance requires an organization-wide effort, HR takes responsibility for cultivating a culture of integrity within the company. Successful implementation of this culture means constant communication and education of employees on compliance issues, executive leaders who uphold ethics and good practices, the implementation of mechanisms for employees to report unethical activities, and the equitable application of policies at all organizational levels. These practices allow you to safeguard your company’s reputation and mitigate non-compliance risks.
Compliance is the tightrope between a dynamic work environment and the letter of the law.
HR Laws Employers Should Know
As an employer, you may find yourself worrying about which HR laws you need to know and comply with. This is a common concern for many business owners, but it shouldn’t be complicated. In this post, we will discuss some of the most important regulations that require attention from a company’s HR team:
- Fair Labor Standards Act (FLSA): Regulates minimum wage, overtime pay eligibility, recordkeeping, and child labor standards to ensure fair compensation and working conditions.
- Affordable Care Act (ACA): Addresses healthcare coverage requirements for employers, ensuring compliance with health insurance provisions.
- Family and Medical Leave Act (FMLA): Mandates job-protected leave for eligible employees for specific family or medical reasons, promoting work-life balance.
- Title VII of the Civil Rights Act: Prohibits workplace discrimination based on race, color, religion, sex, or national origin, fostering an inclusive work environment.
- Occupational Safety and Health Act (OSHA): Establishes safety and health standards to maintain a safe workplace and prevent accidents or injuries.
- Equal Pay Act (EPA): Requires equal pay for equal work, addressing gender-based wage disparities.
- Americans with Disabilities Act (ADA): Ensures equal opportunities for individuals with disabilities in employment, public accommodations, and other areas.
In addition to complying with the above laws, HR responsibilities include non-discriminatory hiring practices, I-9 form completion, correct employee classification, payroll and tax administration, medical coverage provision, Workers’ Compensation insurance, and workplace conflict resolution.
None of this is optional. Proactive compliance with these laws is essential to avoid legal consequences and promote a safe, healthy, fair, and equitable workplace.
Current HR Compliance Issues
Many mistakes can be made if you don’t stay current with HR regulations. Likely, many of these errors are not made with bad intentions. But that does not prevent your company from being sued for non-compliance, which is why you must be aware of the most common issues.
- Discriminatory job listings and inappropriate interview questions: Recruitment ads should not show preference based on protected characteristics like race, color, religion, sex, national origin, disability, etc. Use online tools to ensure unbiased job descriptions. During the interview, avoid asking questions that reveal personal information. Instead, focus on questions that demonstrate skills. If a candidate discloses a disability and requests accommodation, you can’t refuse to hire them on this basis.
- Unsecured documents: Keep employee and candidate information confidential. Store paperwork in a secure location and limit access to authorized individuals.
- Late new hire reports: Employers must notify their state agency within 20 days of hiring or rehiring an employee or face fines for non-compliance. This is to ensure that child support agencies can locate parents who owe child support using the National Directory of New Hires.
- Misclassified workers: Misclassifying a worker can lead to penalties. Use IRS Form SS-8 to determine worker status. Identify non-exempt employees under FLSA for minimum wage and overtime entitlement.
- Inaccurate payroll and tax payments: Payroll is crucial for maintaining workforce morale and avoiding wage claims. Automating payroll calculations, tax deductions, and payments can improve accuracy and compliance and save time.
- Unfair pay practices: States have laws for gender pay equality and the national Equal Pay Act. Unintentional gender pay gaps can arise due to recruitment, transfers, and promotions. Regular pay audits with legal counsel can prevent this.
- Inadequate health coverage: Employers with 50 or more full-time or full-time-equivalent employees must offer affordable health insurance that meets ACA standards or face penalties.
These are the most common issues within companies. Still, there are more, so it is essential to stay alert and, if possible, have an HR compliance expert on top of everything to avoid lawsuits and other legal problems.
The goal of compliance isn’t just avoiding fines; it’s protecting your people.
HR Compliance Best Practices
Since you know the risks, we should also give you solutions. These are some of the HR compliance best practices you can apply in your company to ensure you do not have legal complications.
- Practice policy documentation: All policies and practices must be documented and accessible to all employees. New hires must receive orientation to understand their rights and responsibilities and how to report non-compliance.
- Stay current with new regulations: HR leaders should track changing labor regulations at all levels. To stay informed, subscribe to trusted resources like:
- U.S. Equal Employment Opportunity Commission
- U.S. Department of Labor
- Society for Human Resource Management
- Be transparent with employees: Stay in communication with employees about compliance responsibilities. Notify all affected employees of policy changes and collect signatures to acknowledge receipt. Keep notices easily accessible for future reference.
- Use an HR services provider: Human resources software for payroll and candidate tracking processes includes compliance measures. However, your best option is to hire a company that outsources Human Resources services, such as Worklogic HR. Their experts can lighten the burden of keeping up to date with compliance with laws and regulations.
Meet Worklogic HR Compliance: Your First Line of Defense
At Worklogic HR, we are leaders in HR management dedicated to simplifying Human Resources management in central and southern California. With over 20 years of experience, we have experienced significant growth and transformation.
We offer comprehensive HR solutions for growing businesses, emphasizing maximum efficiency through integrated HR services, streamlined processes, and competitive benefits packages.
In 2018, we partnered with Vensure Employer Services to support strategic growth and offer advanced technology to our clients. Our personalized diagnostic service helps identify gaps and align operations with future objectives. We serve as the first line of defense for businesses, offering risk management and compliance services, from accident investigations to loss control. Our proactive approach to mitigating risks and ensuring compliance positions us as a trusted HR compliance solution for companies.
Our flexible and collaborative approach, along with our industry experience, makes us an ideal choice for companies looking to navigate the complexities of HR compliance with confidence and efficiency. Get a free HR consultation today and stop worrying about your company’s HR Compliance.