What is HR compliance? HR compliance involves understanding local, state, and federal labor laws and adhering to them. Companies have to set up policies to abide by all compliance standards to avoid fines and other penalties.
You can review everything business owners need to know about HR compliance with our team at NetPEO. As a PEO broker and HR outsourcing company, we focus on helping clients like you adhere to all compliance standards and helping your business grow.
What Does HR Compliance Include?
HR compliance deals with human resources. Generally, compliance focuses on setting up policies and procedures that ensure your business adheres to all required laws and regulations. Every company faces challenges when handling HR issues.
Employment laws and federal regulations have increased over time. Additionally, local, state, and federal governments have added increased penalties and consequences of non-compliance for businesses.
What Happens if Businesses Don’t Handle HR Compliance?
Businesses face numerous laws handed down by the state, local, and federal governments. Government agencies may audit your business at any time to ensure that your company follows these laws appropriately.
You could face fines and other penalties if a government agency finds compliance violations. Generally, government agencies do not make allowances for businesses that do not know or understand these regulations.
Therefore, it’s essential that you review all relevant compliance regulations and take steps to protect your company.
What Role Does the HR Department Play in Compliance?
Your HR department plays a tremendous role in ensuring compliance throughout your company. The HR department helps connect compliance practices with the company’s overall growth. The department influences events like:
- Hiring employees
- Employee development
- Employee retention
Generally, the HR department must develop a set of goals while handling the needs of the company and compliance issues. However, taking these steps can take a lot of resources from your business.
Therefore, many companies choose to work with PEO companies. PEO companies handle HR responsibilities, providing companies with experience and guidance as they handle HR compliance.
What HR Compliance Issues Do Businesses Face?
Now that we’ve answered the question, “what is HR compliance?” we can move on to everything business owners need to know. Let’s get started by discussing HR compliance issues your business could face.
Compliance Issues Tied to Recruitment
Businesses want to hire the right people. However, while looking for new employees, you need to focus on adhering to all regulations on diversity. Leaving out applicants because of their race, gender, religion, or disability status could result in legal challenges for your company.
Your HR team needs to know how to correctly handle I-9 forms, for example. These forms allow employees to present various documents to establish their authorization to work in the U.S. You must properly store them and ensure employees complete them in a timely fashion.
Compliance Issues Tied to Benefits
Many businesses around the country have a responsibility to provide certain benefits to their employees. Depending on the size of your company, you may have to legally offer:
- Health insurance
- Retirement benefits
Failure to provide proper benefits can lead to legal actions. Additionally, many employees make decisions about where to work based on the benefits package offered by the company. Therefore, you could lose out on employees if you do not offer competitive benefits.
Compliance Issues Tied to Overtime
Your employees may sometimes end up working overtime while handling busy periods. You have to adhere to all local, state, and federal laws regarding increased pay for overtime hours. HR compliance helps to ensure you follow these regulations.
Compliance Issues Related to Pay
You must pay all your employees according to the regulations covered under the Fair Labor Standards Act (FLSA). Some employees have non-exempt status, changing the way you have to pay them.
Generally, you must pay non-exempt employees at least minimum wage for the first 40 hours they work every week. These employees receive a specific overtime rate if they work more than 40 hours in a week.
Allowing employees to work off the clock can represent a serious issue for HR compliance.
How Can You Handle HR Compliance for Your Business?
HR compliance issues can have tremendous impacts on your business. Fortunately, you can take steps to ensure you adhere to all applicable laws. The experts recommend that you:
- Perform an HR audit to assess your compliance levels
- Offer training to everyone involved in HR compliance
- Set up a monitoring system to check internal processes regularly
Part of monitoring your company for HR compliance may involve setting up a compliance checklist. You can use this list to ensure that individuals monitor company actions at all times, preventing compliance issues.
You can work with HR professionals to develop a checklist that goes over all regulations applicable to your business.
Can You Outsource HR Compliance Services?
HR compliance plays a pivotal role in many companies around the country. However, many small and medium-sized enterprises struggle to juggle regulations and grow effectively.
Fortunately, you do not have to try to handle compliance concerns on your own. Instead, you can reach out to a PEO company for help with all your HR needs. PEO companies employ HR experts who stay up-to-date about all local, state, and federal laws.
PEO companies allow you to retain control of your business while outsourcing HR issues with payroll, taxes, and other highly regulated HR tasks.
Contact Us to Learn More About HR Compliance
What is HR compliance? You can review everything business owners need to know about HR services with our team at NetPEO. Then, we can help you find a PEO company that provides all the support your business needs to thrive.
Find out more by calling us or completing our online contact form.