When a business is brand new, they’re in survival mode. Every penny of profit typically goes back into getting it off the ground. Naturally, very few company founders from the get-go are thinking about developing a comprehensive human resources management strategy.
Jacks-of-all-trades by necessity, new business owners typically handle the hiring, recruitment, onboarding and other people-management tasks by themselves.
A DIY approach to HR policies can backfire bigtime. Keeping in compliance with ever-evolving federal, state and local rules takes vigilance. And when compliance falls through the cracks – either out of ignorance of laws or because policies aren’t enforced – it puts businesses at risk of exposure to penalties, fees, legal action and reputational harm.
So consider it a sign of good growing pains when the day comes that HR tasks become too overwhelming to remain a DIY job. After all, the very goal of human resources management is taking care of a business’s most vital asset: its people.
Managing human resources is intricately connected to a company’s bottom line. A well-thought out HR management strategy steers a company’s culture. All policies related to employees – from recruitment and hiring to training, compensation and disciplinary procedures – are established and enforced to ensure a safe, fair, inclusive and accommodating culture for all employees.
Overview: What is HR compliance?
HR compliance is the process of ensuring that a company’s policies meet applicable legal and regulatory requirements. It’s not as simple as having written policies in place; it’s a combination of policy and practices.
A comprehensive HR management strategy creates a culture of compliance in which both managers and employees understand their rights and mutual responsibilities under the law, and it encourages their buy-in.
If you’re wondering whether it’s time to take a plunge to create a larger HR presence, consider whether your company policies are in compliance with federal, state and local requirements.
To help, we’ve created an HR compliance checklist.
1. Do policies conform with anti-discrimination laws?
The U.S. Equal Employment Opportunity Commission enforces laws that make it illegal to discriminate against candidates and employees based on a protected class, including race, color, religion, sex, national origin, age, disability and genetic information.
States and local municipalities can impose their own spin on employment discrimination laws. For example, many states prohibit discrimination based on gender identity and sexual orientation.
These laws cast a wide net and affect widespread HR operations including recruiting and screening, hiring, promotions, pay, benefits, leave and retirement.
Simply creating a solid set of compliance policies and procedures is not enough. It’s critical that all employees understand their rights and duties under anti-discrimination laws and that managers carry out company policies to prevent discrimination.
Are employee files up-to-date?
Personnel files should include all job-related documentation and information about employees. This includes hiring records, performance reviews and any disciplinary actions. Moreover, employers must also complete and retain I-9s for all employees to verify employment eligibility.
Are wages and working conditions fair?
Federal laws protect employees from unreasonable working conditions. Most are encompassed in the Fair Labor Standards Act (FLSA), which provides a federal minimum wage and rules for overtime pay, record keeping and youth employment. In addition, several states and municipalities impose their laws governing wage and hour requirements beyond the federal standards.
Wage and hour laws affect HR activities related to scheduling and pay as well as the hiring of independent contractors.
Are safety standards followed?
Workplace safety, the process of protecting employees from work-related illness and injury, falls under the Department of Labor’s Occupational Safety and Health Administration (OSHA).
Most private businesses in the US must comply with OSHA, even those with just a single employee. However businesses with under 10 employees are not required to keep detailed records. At a very basic level, OSHA requires that all employees should be trained in the tasks, situations, and equipment necessary to safely do their job.
Are required employee benefits offered?
While most employee benefits are voluntarily offered to attract and retain top talent, some are required. While requirements may vary by state, they can include family and medical leave, health insurance, FICA, unemployment insurance, workers’ compensation, disability insurance and paid sick leave.
Some states require employers to reimburse their employees for remote work expenses, such as internet access costs, cell phone bills and the cost of tools necessary for the job. Some mandate employers to participate in state-sponsored retirement plans or provide their own benefits.
Is there an employee manual?
An employee manual is a written document explaining policies, certain procedures, behaviors, and even some background information and history of the company for employees. It is an essential tool of compliance and so much more, setting the tone for business expectations, including the company’s mission and values. If written clearly and precisely, it can serve as the roadmap for workplace conduct and expectations, which go a long way in establishing a positive company culture.
On the compliance front, the manual details all policies and procedure expectations, including but not limited to those governing attendance and time off, use of company equipment and intellectual property, social media use, the company’s adherence to laws, a definition of employee classifications and compensation rates.
Importantly, handbooks should include all policies related to anti-discrimination and sexual harassment, including well-defined steps employees can take to file a complaint should an issue arise. Defining policies and procedures up front prevents conflicts down the line while also providing crucial protection in case of disputes.
Conclusion:
When considering whether or not it’s time to create a more comprehensive HR strategy, businesses have options. Some opt to hire a dedicated HR generalist or team of professionals that work in-house. Others designate a trained employee to oversee issues as they arise while outsourcing some or most HR functions. There’s also HR software that assists companies in the management of specific HR-related tasks, such as payroll software, hiring platforms, and onboarding tools.
First Contact HR works all HR models, helping to align staff and their functions to a company’s mission, vision and values. Our process involves conducting an audit of your current human resource practices and programs relative to your organization’s strategic plan and goals, and recommending an HR strategy that will support the organization’s goals and objectives.