HR professionals have many responsibilities: Recruiting, hiring, onboarding, and terminating employees; managing payroll; administering company benefits; and even managing health and safety procedures. And yet, the most important of HR’s roles may be ensuring compliance with all pertinent laws and regulations.
Businesses have to follow a number of laws related to employment and labor. This can seem daunting, especially in smaller companies with more modest HR teams. (Or, in companies so small that the business owner has to handle HR functions all on their own.)
A good first step is simply ensuring knowledge of what HR compliance is, and what it requires of your small business.
Defining HR Compliance
HR compliance can be defined as the process of creating, implementing, and enforcing internal policies in accordance with employment and labor laws. The goal of HR compliance is primarily to avoid legal issues, but also to help minimize employee disputes.
HR compliance is sufficiently important, and sufficiently complex, that it’s generally best to entrust it to an experienced professional. This may be someone in-house, or it may be an outsourced consultant.
Key HR Compliance Tasks for Small Businesses
There are a handful of HR compliance tasks that are especially important for small business to follow:
- Display mandatory posters. Federal regulations require businesses to obtain and display posters that list certain labor laws and make employees aware of their rights. Some states may have some additional posters that must be displayed. The regulations regarding these posters change pretty often, so one of the important tasks of HR is to regularly check that their posters are current.
- Accurately classify workers. It’s crucial for businesses to classify employees properly. Some might be hourly, and others salaried. There are also important distinctions between exempt and non-exempt, and contractors versus employees.
- Keep an up-to-date employee handbook. While not every state requires an employee handbook, it’s often a good idea, providing a simple way to keep employees up to date about internal policies as well as their legal rights.
- Provide the right paperwork. When new hires are brought on board, it’s vital for HR to provide them with the necessary documents.
- Abiding by “final paycheck” laws. A final way to ensure HR compliance is to verify that, when an employee resigns or is terminated, they are paid on their last day of work.
Maintaining HR Compliance
As for how to maintain HR compliance, the best advice we can give is to hire a seasoned professional who is able to stay up to speed regarding HR laws, and who has some experience crafting internal policies and procedures to maintain regulatory compliance.
The most effective way to do this may be to outsource. That’s something we’re happy to talk with you about. To find out more about our HR experience, and the different ways in which we can help your small business, contact FullHR today.