The Ultimate Checklist for HR Compliance

Having a solid system in place for HR compliance will help your business avoid fines, penalties and lawsuits. Clear policies and procedures that are clearly communicated, enforced fairly, and continuously updated can prevent discrimination and other workplace violations.

Other compliance responsibilities may include maintaining pre-employment paperwork, performance review documentation, and strict security protocols for team data privacy. These initiatives ensure your company stays in compliance with federal and state employment laws.

1. Recruiting

One of the most crucial aspects of HR compliance is recruiting. A slew of regulations govern how employers recruit, interview, and onboard new hires. Among them are federal employment discrimination laws, which prohibit discrimination on the basis of race, color, national origin, religion, age (40 and older), sex, and disability.

HR professionals must ensure their recruitment processes are free of bias and discrimination, including avoiding questions that could be perceived as biased against an applicant. In addition, they must also ensure their job specifications and advertisements do not imply that the role is exclusive to certain applicants due to their colour, religion, gender identity, sexual orientation, pregnancy, or national origin.

Other items on the checklist include keeping a current employee handbook, monitoring how employees are paid based on job descriptions and hours worked, and making sure HR is retaining I-9 forms signed by new hires. Lastly, it’s important that companies review and update their recruiting process on a regular basis, Kleiman said. This helps to stay on top of any changes in employment law and to keep the company up-to-date with best practices.

2. Training

HR compliance demands that companies establish policies and practices that are aligned with regulations. This includes ensuring that the company adheres to Americans with Disabilities Act standards, fair-compensation policies for remote workers, and hiring and interviewing practices that are free of discrimination based on age, religion, or sexual orientation.

To avoid costly mistakes, HR professionals should make it a priority to stay up-to-date on new and changing employment laws. This is especially important when managing labor relations, as the NLRA (National Labor Relations Act) has specific regulations that HR managers must adhere to in order to avoid union interference and protect employees’ rights.

Another part of HR compliance involves keeping track of upcoming deadlines, such as filing W-2s, ACA reporting, and EEO-1 reporting. A handy checklist can help keep teams on top of these requirements, while also serving as a resource to point team members in the direction of information and resources that will be useful in meeting compliance-related obligations. Having the right tools to maintain compliance is essential for businesses that want to remain successful and ethical.

3. Performance

Maintaining compliance with employer regulations is a critical HR function that ensures the fair treatment of employees and minimizes legal risks for businesses. To do this, HR professionals must stay up to date on federal, state, and local laws and regulations related to anti-discrimination and harassment, wage and hour compliance, workplace safety, and data privacy and security.

HR compliance audits must include examining employee records, policies and procedures, and training to ensure they align with current law and best practices. This may also involve reviewing company data to ensure that information is secure and accessible to only authorized personnel.

Depending on the type of business, other areas of focus may include pay issues (e.g., calculating regular rate and overtime pay), determining whether exempt employees are truly exempt, and the proper method for recording meal and break periods. Another critical area to consider is how the company handles employee health insurance and filings required by the Affordable Care Act.

4. Compensation

HR compliance involves maintaining a lawful, ethical and positive work environment. The size of a company does not alter these requirements; even small operations must adhere to federal and state rules and regulations.

Fair compensation and wages are key to this objective. For example, aside from having an EOR, HR teams must comply with minimum wage laws and ensure workers are paid for all hours worked. This includes correctly calculating overtime pay and adhering to meal and rest break requirements. Similarly, it’s important for companies to be transparent about their salary policies and practices. This can help reduce pay disparity, boost employee engagement and brand loyalty, and attract top talent.

A good HR compliance checklist will include training for managers on how to maintain compliance, which should also be tailored to each state’s rules and regulations. Some HR technologies, like an automated timekeeping system, have compliance modules that can make compliance easier by automating processes such as attendance and leave requests and making it easy to record data.

two people having a meeting - The Ultimate Checklist for HR Compliance
5. Employee Relations

HR departments are faced with a wide range of unique compliance challenges, from navigating the intricacies of remote work compliance to dealing with ever-changing laws on data privacy. But staying on top of these challenges can help HR departments make sure that their company is running smoothly and that employees are protected from discrimination or harassment in the workplace.

Having clear policies in place regarding handling employee data, transparent communication with employees about monitoring, and regularly reviewing privacy policies are all important steps in the right direction when it comes to HR compliance. In addition, being aware of changes in labor laws and adjusting company processes accordingly are also crucial.

One example is correctly classifying employees as exempt or non-exempt to avoid wage and hour disputes, and resetting worker status each January 1 to prevent an increase in federal and state employment taxes like the Social Security tax (Old Age and Survivors Insurance, or OASDI). Finally, keeping up with EEOC training and workplace trends ensures that all employees are protected.

6. Employee Files

A major part of HR compliance is managing employee files and documents. This includes keeping records up to date, ensuring that all information is accurate and secure, and adhering to regulatory laws about record-keeping.

HR managers also have to be careful about who they share information with. While some documents are legally required to be shared with employees, such as payroll data or performance appraisals, sensitive medical information or other confidential materials should only be given to the person it pertains to. Document storage, security and disposal also play a role in compliance.

This can include keeping a log of who accesses employee files, password protection, encryption, and permissions. It’s essential that the whole team is aware of privacy laws and that all members know their roles in managing company data. The best way to do this is through training sessions and making sure everyone understands how they can help ensure compliance with regulations. Having a technology solution that provides updates and alerts when new laws or procedures arise is another great tool for helping ensure compliance.

7. Privacy

HR professionals must be aware of the latest laws regarding data privacy and employee data protection. This includes a thorough understanding of current state laws that may differ from federal legislation, as well as identifying any potential risks to the organization’s security and creating response protocols for breaches.

This may also involve determining whether or not a DPO needs to be designated, reviewing what legal basis exists for processing employees’ information and how this compares with their rights as data subjects (i.e., “ask permission, don’t ask forgiveness”). It is also necessary to keep up with emerging best practices in the industry, as these can help to mitigate risk and create a positive workplace environment for all employees.

Using a checklist can make it easier for HR teams to manage a wide range of compliance issues. From tracking time and leave to ensuring all employees receive equal pay, the right tools can make it easy to stay compliant.

8. Cybersecurity

Cybersecurity is one of the most important aspects of HR compliance. It involves keeping up-to-date with laws, policies, and practices that protect a firm’s sensitive information. This includes training employees to be aware of cybersecurity risks and implementing procedures that safeguard employee data.

This is particularly important for companies with remote workers, since they can be a larger security risk. As such, they need to be vetted before an HR team hires them. This can involve undergoing background checks, credit checks, and security clearance.

It is also crucial to keep up-to-date with employment laws, which are not static. This might include displaying required employee posters, following wage and hour laws, and ensuring equal opportunity in the workplace.

HR systems often store login details for other internal company systems and platforms, which hackers can use to gain unauthorized access. To mitigate this risk, HR departments can ensure that they are using secure technology and encrypting sensitive files. They can also incorporate cybersecurity training into their new employee onboarding programs. This helps to promote a culture of cybersecurity and prevent phishing scams or other cyberattacks.

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