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HR is responsible for every aspect of your company’s employment process, including recruitment, interviewing, hiring, onboarding, and taking disciplinary actions. Along the way, HR has to navigate a confusing maze of laws and regulations. Is there a way to streamline compliance in HR departments and reduce errors at the same time?
Nearly every aspect of your organization’s relationship with employees is regulated in some way. There are laws governing hiring, overtime pay, insurance packages, taxes, workplace injuries, and even dismissals. The HR department plays a pivotal role, making HR compliance vital for meeting your legal obligations.
HR compliance violations carry significant penalties. The government takes employment laws seriously, applying penalties and fines against violators.
There’s also a positive side to HR compliance. When organizations meet regulations for pay, fairness, workplace safety, and confidentiality, employees are often more motivated and effective. HR departments can promote a strong workplace compliance culture, improving productivity and efficiency.
HR compliance means following laws and regulations for hiring, payroll, employee benefits, and other aspects of the employee-employer relationship.
Federal laws outline the minimum age for workers, prohibit certain jobs for minors, and require large businesses to offer health insurance coverage for employees.
HR compliance also covers state and local statutes. For example, states and cities set their own minimum wage for workers.
The HR department must stay up-to-date with government regulations that affect employees. The Occupational Safety and Health Administration oversees a complex worker safety framework. OSHA standards apply to HR training programs, whistleblower protections, workplace injuries, reporting requirements, and recordkeeping.
Many organizations have additional policies and requirements for employees that HR departments need to enforce. Some common examples of workplace HR compliance include:
Internal compliance can be tricky because of the overlap between government regulations, industry expectations, and company policies.
Compliance in HR extends to contract agreements. Benefits and pay perks attract top talent. These stipulations are legally binding, requiring HR to balance details for hundreds or thousands of employees.
Enterprise organizations may also need to comply with union agreements, such as providing sufficient notice. Unions get involved with disciplinary actions, wages, benefits, severance packages, and dismissals.
Multinational organizations have significantly more complex HR compliance obligations. Each country has different laws for employment, payroll, taxes, employee protections, and information reporting.
Compliance in HR matters doesn’t just mean meeting government regulations. The HR department can actively help with compliance training for other frameworks, including ISO 27001, SOC 2 Type 2, and HITRUST CSF. One of the best defenses against phishing attacks and data breaches is a good training program for email safety.
It’s easier to understand how to achieve HR compliance with a few concrete examples.
When hiring any worker, your HR department must complete Form I-9 for U.S. Citizenship and Immigration Services within three days. It’s necessary to include the individual’s Social Security number and photo ID. Compliance also requires making sure the new worker fills out part of the form on the first day of employment.
A common HR compliance violation is misclassifying an employee’s work status. In some situations, salaried employees are exempt from overtime pay, but it depends on how much they make and their overall benefits package. Compliance mistakes can hit you with hefty penalties and require you to suddenly pay a huge amount of overtime hours.
Workers’ compensation laws require employers to provide state-mandated insurance coverage to cover workplace injuries. Each state has different rules for reporting, HR responsibilities, and coverage minimums. Employees generally need to contact HR before filing for benefits, and accurate recordkeeping is a must for regulatory and legal reasons.
Some HR compliance requirements apply to every business, such as payroll documents and tax forms (e.g., W-2s and 1099s). Others are industry-specific, such as healthcare or defense industry requirements:
The specifics of these laws and regulations can change quickly, especially for reporting requirements, so HR departments need to stay up to date to avoid non-compliance.
Achieving compliance in HR starts with an in-depth assessment of your company’s responsibilities and scope. Create a comprehensive list of city, state, federal, and country laws that apply to your employment framework.
Assign clear responsibilities for compliance in the HR department, including who is in charge of updating company guidelines and monitoring compliance. Provide clear documentation with real-world examples. Do an HR compliance audit to review your policies annually.
Compliance in HR often requires a hybrid governance structure. There are efficiency benefits with centralized compliance policies, but the regional nature of many HR rules also requires local managers to have freedom for implementation.
Compliance platforms that offer granular details are an excellent HR compliance solution. This type of tool enables you to track compliance on an organizational level, keep an eye on training completion rates, flag noncompliance issues, and locate regional bottlenecks.
Compyl can help you save time on HR compliance without sacrificing accuracy. Learn how to manage the complexity without making it complicated. Discover Compyl’s powerful tools for HR professionals today.
