Hr Compliance For Small Business – HR compliance is essential to keeping your business legal and your employees safe. A dedicated HR compliance team or designated HR staff member is responsible for navigating various federal and state laws and regulations to mitigate the company’s legal risk. In this way, HR helps to avoid potential liabilities, fines and scandals that damage the company’s reputation.
HR compliance is the process of creating policies and procedures that ensure your organization complies with up-to-date labor and employment regulations. Not only does HR work to align workplace policies with local and federal laws, but they also enforce procedures to ensure compliance by all employees.
Hr Compliance For Small Business
HR compliance is vital to your business as all employers must meet their legal responsibilities. Failure to comply will result in fines, penalties or even litigation that could be detrimental to your business. In other words, HR leaders must prioritize HR compliance to protect their organization.
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In organizations of any size it is essential to know that you must follow labor laws and various regulations. Otherwise, you risk fines, legal trouble, and bad publicity. Let’s dive into more details about the compliance challenges faced by HR professionals.
The United States has several laws that protect workers’ rights when it comes to wages and hours. There are laws at the federal, state, and local levels. They also set how many hours a day someone can work, overtime and weekend pay.
For example, the federal minimum wage in the United States is $7.25 an hour, but the state minimum wage in Oregon is $13.50 an hour, and the state’s most populous city, Portland, is $14.75 an hour (as of July 2022). Especially if your business operates in multiple cities and states or has remote employees, you need to understand and comply with these laws.
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As the name suggests, the FMLA allows eligible US workers to take work-protected paid leave for family and/or medical reasons. Simply put, your employee has the right to take unpaid leave without fear of being fired for family or medical conditions. Examples are the birth of a child, caring for a parent, child or spouse with a serious health condition or when the employee is sick and unable to work.
Occupational safety is regulated by the Occupational Safety and Health Administration (OSHA). Depending on what your organization does for business, you will have different industry standards to follow.
For example, construction workers are constantly exposed to hazardous environments where they may be exposed to heavy construction equipment, unattended machinery, or exposure to silica dust and asbestos. In contrast, healthcare workers face an entirely different set of risks, such as exposure to viruses and bacteria, possible chemical and drug poisoning, radioactive material, and X-ray hazards.
You can learn more about your company’s workplace safety requirements by doing a North American Industrial Classification System (NAICS) search.
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As mentioned above, companies should be aware of union laws when working with union members. Another example of a strong union is the Association of Flight Attendants – CWA (AFA-CWA). The organization helps its members to achieve
“Enhancing fair compensation, job security, seniority protection, and quality of life through organizing, bargaining, and political action, serving as the leading voice for a safe, healthy, and secure airline cabin for passengers and crew.”
Both business and higher education must comply with immigration regulations when hiring an employee or accepting a foreign student. The law that governs immigration policy in the United States is the Immigration and Nationality Act (INA). This law allows the US to offer a certain number of permanent visas per year in different visa categories.
The Department of Homeland Security (DHS) is the primary agency responsible for enforcing US immigration laws, but many other agencies support it.
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To cope with today’s talent market, many companies have opened up their roles to a diverse workforce, such as remote or hybrid workers, part-time workers and independent contractors. In this case, your company must understand which employees are entitled to which benefits and which wages they should receive based on the hours worked and location.
This type of compliance describes how companies and government agencies keep data secure, confidential and protected from breaches. This generally refers to consumer data, but also includes employee data and financial records.
An example is the California Consumer Privacy Act (CCPA), which applies specifically to companies with revenues of $25 million or more. Under that law, California residents have a legal right to know what data a company has stored about them and what information has been shared with third parties.
Following HR compliance best practices can help ensure your organization is set up for long-term success.
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The rules and regulations you must follow depend on factors such as your location, where you work, your industry, and the size of your business.
Make an easily accessible list of obligations and applicable laws. Consider the different types of compliance issues we’ve discussed above, such as wage laws and workplace safety regulations.
To help with this, you can implement compliance software to track regulatory requirements. Some examples are Donesafe and Libryo.
Members of your HR team must have a clear understanding of their role in ensuring HR compliance. To organize your time, consider the following questions: Is this a shared responsibility among several team members, or do you designate one person to be responsible for compliance? If so, does that person have the necessary knowledge and skills? If not, how can they be developed?
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Depending on your needs, you may decide to hire a dedicated HR compliance officer/manager/team at larger companies or get help from a consulting firm. You may also need legal help. Therefore, you may need to create a cross-functional team within your organization to support regulatory compliance.
Be aware of changes in laws and regulations that apply to your business. Changes usually happen at the beginning of the year.
Subscribing to HR Dive’s compliance newsletter or following the HR section of Corporate Compliance Insights are great places to start. It is useful for HR professionals in general, but especially for those responsible for compliance in your organization.
Conduct regular HR audits to see if your HR policies, such as termination policy, non-discrimination policy and compensation policy, are being followed. Take the time to update your policies.
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You can also educate your employees with HR compliance training. Examples include Fair Labor Standards ACT (FLSA) training, interviewing training for hiring managers and new interviewers, and affirmative action plan training.
You must be consistent in conducting HR investigations, applying your disciplinary policy, accessing FMLA and other processes. Failure to do so can open up opportunities for non-compliance and legal issues.
You can achieve consistency by describing the process steps in writing, maintaining proper documentation, and letting managers know how these processes work.
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Hr Software For Small & Medium Businesses
First, check if your HR technology complies with, for example, privacy laws or GDPR if it works in Europe. Additionally, many HR tools have compliance modules to make compliance easier. Examples of these platforms are BerniePortal Compliance, SAI 360 and IntelliHR.
The HR Compliance Checklist helps make sure you don’t forget anything. You can create a fulfillment list for hiring new employees and a more general organizational fulfillment list. Below you can find a generic checklist; make sure you tailor yours to your business:
Your managers are one of your most important assets when it comes to compliance. Ensure that HR provides compliance training to management, focusing on the following areas:
Without going into too much detail, here are some other checklists to create specifically for your team in the US. These are US Affirmative Action, Equal Employment Opportunity Commission, Veterans Checklist and I-9 forms.
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HR compliance is not just an administrative issue. Instead, it helps you maintain your company’s reputation as a strong business and create a transparent, fair and safe environment for your employees. Additionally, creating an HR compliance checklist can help streamline the process and prevent the company from facing lawsuits.
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Jayla Cosentino is a recruiting professional specializing in recruiting startups and climbing teams. It focuses on 360 recruitment, as well as creating and optimizing organizational recruitment processes. Passionate about recruitment and all things HR, Jayla has spoken at conferences hosted by companies such as Honeypot.io and ProductUp, as well as at universities such as Utrecht University. Content strategist and corporate blogger (2000+ posts). His work has been featured in G2’s Learning Hub, Human Resources Today, Better Buys and over 500 business websites. He plays bluegrass mandolin and enjoys sailing his catamaran and hiking in the red rock desert of southern Utah. Connect with me on LinkedIn
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