HR Compliance: What Business Owners Should Know

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Human resources compliance is about more than just following the law. It is a strategic cornerstone for your business and a high-stakes venture that can either help or hinder growth. Failure to comply with local, state, and federal employment laws could result in fines, litigation, and damaged trust. 

What Is HR Compliance?

Compliance in HR encompasses an awareness of all the applicable HR laws and regulations for your business. It also includes the policies and procedures that ensure adherence to those regulations.

As employment laws and regulations have evolved, compliance has become increasingly complex, and the risk of penalties for non-compliance has escalated.

Sources of HR Compliance

• Statutory Compliance: Your business must comply with government laws, or statutes, that regulate the workplace. 
• Regulatory Compliance: Regulatory compliance covers rules established by government agencies or regulatory bodies such as the Federal Trade Commission or the Department of Labor.
• Contractual Compliance: Contractual compliance refers to stipulations laid out in legally binding contracts between your business and other parties.
• Union Law Compliance: If your company employs union workers, you must understand and comply with the union's collective bargaining agreement. 

Why HR Compliance Is Important

As you grow your business and expand your workforce, you will encounter both new opportunities and new risks. It's common for business owners to grapple with complex OSHA regulations, laws for remote workers, and other thorny compliance matters. Having a definitive HR compliance policy in place that is regularly reviewed and reinforced may help your business avoid exposure to costly legal penalties for non-compliance with federal and state regulations.

About 56% of business leaders cite risk management and workers' compensation as their top HR challenge in the next 12 months.1 Maintaining compliance with employment laws becomes even more difficult when companies have locations in multiple states or employ remote workers outside the state of operation. With remote work on the rise, penalties for employer-related violations can soar as high as $1,240 per worker annually.2

Non-compliance is simply not worth the risk.

HR Compliance Laws and Regulations Employers Should Know

Numerous HR compliance laws and regulations require attention from a company's HR team. You can prevent compliance violations by remaining aware of legal requirements in areas like these:

• Non-discriminatory postings and hiring
• Completion of Form I-9
• Conducting background checks
• Properly classifying employees as exempt vs. non-exempt
• Pay deductions
• Making payments for payroll and taxes
• Providing healthcare coverage
• Ensuring labor posters are up to date and visible to all employees
• Managing workers’ compensation insurance
• Responding to conflicts within the workplace

In addition to the key compliance areas highlighted above, be familiar with specific federal employment laws that underpin these responsibilities. Below is a detailed list of employment laws that play a crucial role in guiding HR compliance efforts:

• Fair Labor Standards Act (FLSA)
• Family and Medical Leave Act (FMLA)
• Occupational Safety and Health Act (OSHA)
• Title VII of the Civil Rights Act of 1964: Title VII human resource laws protect workers from discrimination based on race, color, religion, sex, and national origin.
• Americans with Disabilities Act (ADA)
• Age Discrimination in Employment Act (ADEA) ADEA prohibits age-based discrimination for individuals aged 40 and older.
• Equal Pay Act (EPA)
• National Labor Relations Act (NLRA)
• Immigration Reform and Control Act (IRCA)
• Genetic Information Nondiscrimination Act (GINA)

As you develop your company's strategic priorities, understand that compliance concerns may impact key decisions. HR goals should support company strategy, yet they must also strictly comply with human resource laws and regulations.

If you want more help, download our FREE Guide to Year-End Compliance or click here to speak to a dedicated rep that understands the unique HR needs of franchisees like you.