Human Resources compliance best practices

The role of HR is one of utmost importance. With all that’s at stake, there is no way for a compliance program to be successful without the functions of HR.

What is HR compliance?

With HR at the center of organizational success and critical to compliance efforts, you might be wondering, “What is HR compliance?”

Simply put, human resources compliance is the process of defining and implementing the policies, procedures, and training to ensure employees understand, acknowledge, and comply with all applicable laws and regulations.

As mentioned above, HR compliance mostly applies to employment laws, such as medical leave, equal employment, and anti-discrimination.

But HR compliance doesn’t stop there. Because most compliance regulations revolve around people and their behaviors, HR really touches on all aspects of compliance.

Why HR is crucial in corporate compliance

As the front line of defense, HR managers tackle compliance in the company’s efforts to treat employees fairly, adhere to federal laws, and mitigate risk.

Typically, HR is the one department with oversight of and contact with all employees at every level of the organization.

Human resources hires employees, regularly communicates with them, and trains them. And most importantly, HR plays a critical role in creating culture of accountability, which serves as the crux of compliance. Therefore, because HR wields tremendous influence on compliance, it serves as a critical function in corporate compliance efforts.

Common HR compliance issues

Compliance management in HR generally falls into three common buckets, described below.

1. Employment laws: These federal laws and regulations specifically apply to Human Resources. They include Family and Medical Leave Act (FMLA), wage and hour laws (Fair Labor Standards Act), anti-discrimination laws (Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act, Age Discrimination in Employment Act (ADEA), and anti-harassment laws.

2. Employee health and safety (OSHA): Traditionally, this covers workplace hazards and safety. More recently, HR plays a much deeper role in employee health and wellness initiatives as research continues to show how healthy employees are more productive, have fewer missed days, and reduce benefits costs.

3. Hiring and firing processes: This now includes a greater focus on immigration laws, labor relations and unions (not technically a regulation, but it can lead to significant legal costs down the road. Plus, HR must properly let costly employees go in a way that doesn’t invite lawsuits or problems.

Clearly, HR compliance plays a pivotal role in identifying issues and is at the center of an organization’s success.

Where can HR managers directly influence their company’s compliance efforts? Take a look at these HR compliance best practices.

Hire the right people

When it comes to the hiring process itself, HR must follow multiple laws and regulations. For instance, the Fair Labor Standards Act ensures that the company provides the minimum wage and meets overtime requirements when hiring employees.

The Americans With Disabilities Act protects workers with disabilities from being discriminated against in the hiring process, including boundaries around the questions employers can ask candidates during the interview process. And the Age Discrimination in Employment Act protects older workers (40 years or older) from being discriminated against due to their age.

Having a solid, compliant hiring process serves as one of the most important functions for HR compliance. HR managers must balance the staffing needs of the company with federal regulations regarding fair treatment.

Next, HR is tasked with hiring the right people who will contribute to the company’s compliance culture. As the company gatekeeper, HR recruits and hires people who are likely to be compliant as opposed to candidates with questionable ethics or red flags from previous employers. The HR manager plays a crucial role in setting the hiring standards, particularly in high-liability industries or roles.

Finally, HR’s onboarding process for people they do hire marks a key step in compliance that shouldn’t be overlooked. This process outlines the expectations, processes, and culture the organization wants to convey to new employees.

This recruiting/hiring/onboarding process sets the tone for an employee’s career with the company. Plus, it exerts a major influence on the overall culture of the company, which is a key contributor to the company’s compliance.

Keep your employee handbook and policies up to date

For all intents and purposes, think of the employee handbook and individual policies as the same. While some companies use a single handbook with the main policy information, others use individual policies. Regardless of which approach companies take, the HR department typically has a hand in both employee handbooks and policies.

Don’t make the mistake of creating policies and procedures once and then never returning to them again. They are living documents that should grow and adapt with the constantly changing regulatory landscape as well as the changing needs of the company. While the core policy elements might stay the same, their details need to adapt to continue to protect the company and maintain compliance.

Bottom line: Regular policy reviews, revisions, approvals, and dissemination should be a key part of business operations, as they play a crucial role in HR compliance.