Human resource compliance means building policies that ensure a company follows all local, state, and federal regulations. Failure to comply can lead to fines, penalties, or even lawsuits that may bankrupt a business.
While it may seem like compliance is simply protocol and blind rule-following, it shapes employee experiences and the workplace.
Human resource compliance is one of the most critical responsibilities of any company’s human resources department. It ensures that a business’ hiring practices, workplace rules, and treatment of employees all comply with a city’s, state’s, country’s, or even the world’s labor laws. This involves many tasks, such as setting up policies and schemes that satisfy the regulations, investigating complaints, reasonably disciplining non-compliant employees, and retaining documentation.
Moreover, human resource compliance ensures that the business complies with the laws regarding employees’ rights to organize and collectively bargain for terms and conditions of employment. It also encompasses the employer’s obligation to provide workers with their job’s health and safety necessities, including adequate wages and vacation time. Furthermore, it means that the employees should be able to file legal actions against the company in cases of violations.
In the case of non-compliance, a company could be subjected to fines and penalties by an enforcing authority. In addition, a company that is found guilty of violating the law may have to pay damages to its victims. For this reason, a company needs an active HR department that constantly monitors the latest labor laws and regulations and ensures that the business complies with them at all times.
To achieve this, HR departments must ensure they have the right people. The team in charge of compliance must have a good understanding of how to interpret the latest laws and guidelines and understand the nuances that can arise from differing local regulations. For example, while every employee should be treated equally, there might be cultural or gender-based nuances in certain parts of the world that must be taken into account when creating employment policies and guidelines.
Furthermore, the team should work closely with the company’s legal department to ensure the governing laws are correctly interpreted and applied. The team should also ensure they have an up-to-date playbook covering the most critical compliance issues for their specific industry and region. This will help them stay abreast of any new laws and regulations that might affect their business, such as a shift in privacy standards after a data breach or an update to the minimum wage laws following a change in government policy.
Lastly, the HR team must be able to communicate all of these requirements to their employees. This includes ensuring that the employee handbook clearly outlines all of the compliance issues that apply to the company and giving employees the tools they need to report any violations that might occur. It is also a good idea to offer regular training so that the employees can refresh their knowledge of the compliance requirements and keep themselves updated on any changes.