HR Compliance: What It Entails and What You're Responsible For

As a business owner or leader, it's important to define objectives and empower your team to reach them. That means employing the right team while also nurturing their growth.

Part of ensuring your team is taken care of includes paying attention to employment regulations along the way. Suppose a new law is passed regarding employment taxes or overtime pay as it relates to non-exempt status. That’s where HR compliance comes in. HR compliance ensures that your organization’s HR policies and practices align with all employment-related regulations.  

Whether you have an in-house team or outsource HR, every organization must comply with specific regulatory requirements. Let's dive into the ins and outs of this critical component of HR.

Intricacies of Compliance

HR compliance is fundamental to the success of an organization and requires a comprehensive, detail-oriented understanding due to its complexities. Even if you have a dedicated HR team, it can be hard to keep track of all the changing rules, regulations, and moving components.

HR compliance includes everything from enforcing workplace rules to handling paid time off, medical leaves, and adhering to all legal protocols. It can be a lot to handle at once, especially if you’re not well-versed in HR or need to concentrate on business operations.

Even if you have an in-house HR team, their time is more productively spent fostering your company’s work culture, not bogged down with paperwork and legalities. Working with an organization, like a PEO, to handle HR compliance allows your team to focus on reaching the goals you identified, plus giving you the confidence that nothing is slipping through the cracks related to employment regulations.

Adapting to Laws and Regulations

Business regulations and policies aren’t stagnant. As our society evolves, our rules follow suit. Minimum wages are rising, and policies are often amended. Local, state, and federal laws are always changing, and they can be difficult to keep up with. However, there’s little room for error when it comes to adhering to the law.

Non-Compliance Has Major Consequences

Failure to comply with workplace regulations or mispay has serious, costly consequences. Even if you accidentally miss something, it can cause problems down the road, including auditing and accounting changes. Suppose you manage an employee’s exemption status incorrectly. They are then owed overtime with up to triplicate damages. These are mistakes that many businesses cannot afford to make.

Mishandling of HR issues can lead to severe repercussions—if employee rights are violated, your organization is vulnerable to EEOC claims regarding employment discrimination. Non-compliance can lead to loss of revenue, reputation damages, and even legal action. When it comes to compliance, you’ll want to enlist the help of HR professionals.