DEALING WITH HR COMPLIANCE

 

DEALING WITH HR COMPLIANCE

HR compliance is how a company defines its policies and procedures to ensure they’re carrying out fair practices in relation to applicable laws and regulations. Human resources helps protect the company and its employees to ensure that they are adhering to the numerous regulations and laws that govern the employment relationship

What is HR’s role in compliance?

As an HR professional, it can be tricky to develop specific policies and procedures that ensure your organization is compliant. It’s in your best interest to be well-versed regarding how your company expects to grow and what that’ll mean for hiring, retention, and employee development. Having the right balance between an effective strategy and the necessary understanding of compliance as you define these goals will better set your organization up for success.

 Common HR compliance issues

 When it comes to compliance issues the HR department faces, they typically fall within employee-related situations and encompass everything from recruitment to retirement.

·      Benefits compliance

·      Anti-discriminatory laws

•       Hour and wage compliance issues. 
•      Family and Medical Leave Act (FMLA) 
•       Workplace safety compliance. 
•       Compliance to Immigration Laws. 
•       Federal Civil Rights compliance. 
•       Employee retirement plans and other benefits                                                                                                                                                                                         Some of the most common examples of laws and regulations that govern the employer-employee relationship include the following (SHRM.org):

•   Age Discrimination in Employment Act
•  Americans with Disabilities Act
•  Fair Labor Standards Act
•  Family and Medical Leave Act
•  National Labor Relations Act
• Worker Adjustment and Retraining Notification Act

These federal laws cover all employees of all organizations. Several other factors may apply in determining employer coverage, such as whether the employer is public or private, whether the employer offers health insurance, and whether the employer uses a third party to conduct background checks. Source: SHRM website, https://www.shrm.org/, accessed October 20, 2018.

 Scheduling HR compliance audits should be part of the company’s overall strategy to avoid legal risk. Noncompliance can cause enormous financial and reputational risk to a company, so it is important to have audits that test the organization’s controls and preparedness. When the human resources function takes the lead in implementing audits and other best practices, they create real value for the organization

 

This is most likely to happen in cases where HR compliance has been integrated with the organization’s overall business strategy, and the organization’s leadership has taken steps to ensure all employees understand the importance of HR compliance. Here are five basic principles organizations should follow to help achieve these goals:

·       Hiring the Right Talent – Hiring the right talent within the HR function’s area of responsibilities (compensation, employee benefits, legal requirements, talent management) is one of the most important issues for organizations today. The HR function must have the knowledge, skills and experience, or be able to access it through third-party relationships.

·       Proper Education and Training – The talent in the HR function must be well versed in employment law and the regulatory/legal requirements that can affect an organization at any time. These laws and requirements are changing all the time and its imperative for the HR function to stay apprised of the latest information available.

·       Create an Employee Handbook and Update it Regularly – An organization’s Employee Handbook is one of its most important documents. The Employee Handbook is a communications tool that should clearly articulate the organization’s policies and procedures and how business should be conducted. It is a best practice to have legal counsel review the handbook and any new policies and procedures before distribution.

·       Conducting Scheduled HR Compliance Audits – Many HR functions are typically understaffed and overworked. As noted, non-compliance can be the basis for financial and reputational risks for organizations. Conducting scheduled HR compliance audits should be a part of an organization’s overall strategy to avoid any legal liabilities.

·       Communicate, Communicate and Communicate – The HR function is a critical component of an organization. Whether there are compliance issues or not, it is critical for the HR function leaders (CHRO, VP of HR, etc) to keep other executives up to speed on potential HR compliance risks and recommended remediation.

·       These steps will help the HR function take a large step to achieving its goal of maintaining HR compliance for the overall organization.

 

CONCLUSION

Human resources compliance is an area that traces back to the very origin of the human resources function—to administrative and regulatory functions. Compliance continues to be a very important area that HR manages, and there are numerous regulations and laws that govern the employment relationship. HR professionals must be able to understand and navigate these laws to help their organizations remain compliant and avoid having to pay fines or penalties. The additional threat of reputational harm to the organization is another reason that HR needs to be aware and alert to any potential gaps in compliance

 

REFFERENCES

Jass.(2021) Compliance Issues Every HR Official Must Know (online). Available athttps://www.jazzhr.com/blog/6-compliance-issues-every-hr-official-must-know/ Accessed on 26^th April 2021

 

Davis & Carnovali. (2021) Corporate Compliance Insight (online). Available at https://www.corporatecomplianceinsights.com/hr-function-compliance-role/ Accessed on 26^th April 2021

 

Payrollvault. (2021) HR Compliance Checklist- Needed Prep for HR Audits (online). Available at https://www.payrollvault.com/hr-blog-resources/hr-compliance-2021.html/ Accessed on 26^th April 2021