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HR compliance is critical for both small and large businesses. HR must help their companies stay up-to-date on all local and federal laws and regulations, as well as industry standards and best business practices. By creating and following internal guidelines centered around compliance, HR can ensure the organization is safe from audits, fines, lawsuits, and other negative impacts to the business.
Learn more about HR compliance and discover the important role HR plays in overall compliance for your organization.
What is HR compliance?
Compliance is the process of defining, developing, and implementing various policies and procedures to comply with all applicable laws and regulations. Additionally, training must also be in place to guarantee employees understand, acknowledge, and comply with measures put in place.
Many compliance concerns center on people and their behaviors—which places its management firmly in the hands of HR. As you develop new company HR policies and procedures, make sure that you are always in compliance.
Additionally, HR compliance applies to employment laws—from the hiring process to compensation and benefits such as overtime, pay, and leave, as well as equality, discrimination, and harrassment.
In a rapidly changing work environment, maintaining compliance can be difficult for businesses. In some industries and depending on company size, you may need to hire compliance officers with special training in labor laws and other potential conflicts.
What is HR’s role in compliance?
Proper Hiring Practices
HR compliance can safeguard against unfair and discriminatory hiring policies at work. Start by making sure you abide by state and federal legislation like the Fair Employment and Housing Act and the Americans with Disabilities Act (ADA). Consider how you approach each phase of the process, including recruiting, interviewing, hiring, and onboarding.
You can use a Learning Management System (LMS) to promote diversity and inclusion with new hires and long term employees. Non-discriminatory hiring helps to diversify your staff and strengthen the company with a wider range of perspectives.
Don’t skip the background checks when vetting applicants, but make sure you have a consistent policy holding everyone to the same standard.
Employee Benefits
Companies with more benefits generally have more HR compliance issues to navigate.
- The Affordable Care Act (ACA) no longer has an individual mandate, but employers still have certain obligations when it comes to employee benefits.
- The Family and Medical Leave Act (FMLA) has requirements for unpaid time off.
- If you offer health insurance, then you will also need to allow departing employees to sign up for COBRA.
Pay and Time Rules
Minimum wage laws and rules against child labor are pretty well known, but your policies for raises and bonuses also need to be compliant. More than an optimistic slogan, “equal pay for equal work,” helps to reward and motivate all employees with a level playing field.
- Worker classification will affect overtime payment and taxes. Some states have additional laws about break periods.
- The Fair Labor Standards Act (FLSA) does not require pay for lunch breaks lasting 30 minutes or more. Although an employee’s commute (to and from work) doesn’t count as part of the work day, their travel time during work hours (such as driving between clients) would be eligible for compensation.
Workplace Safety
Labor laws govern workplace safety. The Occupational Safety and Health Administration (OSHA) sets and enforces regulatory standards across the country. Employers must comply with all applicable OSHA standards.
Data Security
Every month, the news seems to feature another data security breach at some bank or another major corporation. You have an obligation to employees and clients to protect sensitive data like financial information and home addresses.
Most present-day companies also want to protect their own digital records and internal software. Industries that handle medical or legal records may need to follow additional confidentiality requirements like HIPAA.
What can HR do to ensure compliance?
These tips and online resources are meant to serve only as an general overview and should not be interpreted as legal advice.
Create and distribute HR policies and forms
If you wait for problems to arise, then you’ll spend more time fighting easily preventable fires. Clear HR policies protect the company from unnecessary incidents. From recruiting to exit interviews, each phase of the employee lifecycle should be planned to ensure compliance.
Handbooks allow you to clarify policies like PTO and distribute required paperwork. If you don’t already have one, develop an employee handbook and update it regularly.
Host proper education and training
Beginning with onboarding, training sets the tone for your workplace culture. An LMS is great for new hires and experienced workers. Get everyone on the same page about safety protocols, new regulations, and other compliance issues.
Conduct scheduled HR compliance audits
With an audit, HR can conduct a deep-dive investigation into your organizations’ operations to determine if everything is in line with federal and local guidelines, while simultaneously adhering to the needs of employees.
A comprehensive HR compliance audit should review a wide array of HR-related topics, including pay & incentives, hiring practices, employee behavior guidelines, health/safety precautions, and performance reviews.
Communicate frequently and in detail
Keep open channels of communication with workers, not just during onboarding or open enrollment, but throughout the employee lifecycle. If a new policy or regulation affects your business, don’t be afraid to go into detail. After new training sessions, send out thorough notes and materials for attendees to review the information.
Some employees might be reluctant to report a minor issue, but you can start the conversation by checking in regularly. Because offboarding is just as important as onboarding, an exit interview provides a huge opportunity for more candid feedback about workplace culture.
Properly investigate work-related incidents and accidents
When incidents occur, you can’t afford to settle for the most convenient explanation. Follow protocols and investigate problems thoroughly.
It’s okay to think outside the box when trying to prevent further accidents, but your top priority should be following all the established policies when things actually happen. Particularly when it comes to disciplinary action, follow your company protocols to stay fair and consistent from one incident to the next.
Keep all your bases covered with HR compliance. In addition to protecting the company from liability, compliance helps you better serve and support your employees.
For more information on HR topics, read our HR blog and follow Netchex on social media—Facebook, LinkedIn, and Twitter.
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