HR compliance is one of the most important company practices. It may be the most important. What exactly is HR compliance? It refers to the policies and procedures put in place by the company to ensure that everything is run legally. These procedures and practices are not just in written form, but also come in the form of actions taken by the company. Though the idea is simple, this topic is not to be taken lightly.
A company must establish a culture where all roles in the company-–from executives to managers to employees–-understand the rights and responsibilities they have, as well as how they can react to things that go against compliance policies. HR compliance protects everyone financially and also creates a work environment in which people feel safe, positive, and able to (and want to) do their job well.
Establishing the policies as part of HR compliance is one of the first steps to take when starting a business–-this should not be something that only happens in response to a problem. Going in with the right policies and procedures will help to keep things from going wrong, and in the case that something does go wrong, there are steps in place on how to handle it.
HR compliance policies should be communicated with employees through a handbook as well as posters around the office and proper HR compliance training. You want everyone in the company to be on board with the different policies so that there are no questions.
Why Does HR Compliance Matter?
HR compliance is a large piece of what holds a company together, whether things are going as planned or whether things get derailed.
Compliance matters for a couple of different reasons. First, it keeps things organized within the company and keeps everything sailing along smoothly. Things such as schedule requests, paid time off, payroll, and more are part of HR compliance and when there isn’t a mutual understanding of these policies, things can get tricky. Being compliant with these and other policies and procedures ensures that everyone is on the same page and that your company can stay organized as it grows.
A second reason why HR compliance is important is that it helps keep a safe, trusting, and healthy relationship between employers and employees. Policies such as the prevention of discrimination must be put in place so that every employee feels safe and is treated equally in the workplace.
By implementing a successful HR compliance procedure into your company, you stand a much better chance of handling issues in a way that minimizes the problems, and also keeps you from suffering from negative changes in the company culture, as well as potential fines. Establishing these procedures benefits everyone.
What Does Success Look Like?
Though setting up HR compliance policies and procedures may take some time, it will be well worthwhile for you, your employees, and your company as a whole. Here are some ways in which your company will see the benefits of successful implementation of HR compliance.
Smoother Hiring Process
There is no shortage of paperwork when it comes to bringing new hires onto your team. With everything from offer letters to 1-9s, NDAs, and more, it can get complicated to remember what forms you need to give your new employees. However, failing to provide them with the proper paperwork can leave you in some serious trouble. When you have HR compliance policies and procedures in place, you can onboard people more smoothly and get all of the paperwork taken care of.
The training process may look a bit different depending on the position you hired for, but one thing that will stay the same across the board is that the employee handbook will be reviewed in training and that the handbook will include all the company’s HR compliance policies and procedures. Ensuring that time is taken to review the handbook will ensure that compliance training is equal and that everyone has a chance to understand fully what their rights are within the company.
Higher Employee Retention
The employees in your company are likely to stay longer if they know that should an issue arise, that there will be fair and safe handling of the problem. Knowing that they can trust the company to implement the right policies and procedures gives employees a strong sense of safety that will keep them at your company much longer than an employer who makes them wonder if their rights will be upheld if ever put in question.
If HR has set up policies regarding payroll, and those policies are shared with employees in training and also in the employee handbook, there should be much fewer issues and questions when it comes to getting paid. It is impossible to avoid the inevitable occasion payroll problem, but you will massively decrease the number of issues and likely the severity of them if everyone is on the same page with compliance procedures.
Fewer Benefits Issues
In order to get employees to work at your company, and also in order to get them to stay, you need to offer them benefits. These benefits vary depending on the company, but HR compliance policies and procedures need to be set in place to ensure that the benefits are equal across the board. Doing this will make sure that benefits are understood from the getgo and that employees rarely, if ever, have problems with their benefits.
Things can get complicated when you’re still using archaic HR compliance procedures in order to get things done in your company. This was certainly the case for Price Brothers, Inc., a plumbing contractor whose specialization is new-home construction.
The HR process prior to implementing a new system was time-consuming and left lots of room for error and non-compliance. Anyone interested in a job at Price Brothers was required to fill out a paper application. In addition to that, once hired, all new-hire paperwork was also filled out by hand, and filed by hand. You can imagine the mistakes that could have been, and were made as a result of this outdated system.
To fix the issue, Price Brothers integrated HR software Paycor into their HR, payroll, and onboarding process. This software erased the need for entering anything manually and made things much easier for new employees, current employees, and managers. With this new software, new hires are now able to view and sign their paperwork before their first day, which reduces the risk of compliance issues. In addition to that, rather than keeping physical files of employee paperwork, Price Brothers now has a digital home for all employee data. This allows employees to access their personal information and update it, as well as view past paycheck stubs, and more.
One Secret Weapon To Master HR Compliance
With the option to automate these days, it’s a wonder why people are still doing things manually. You may be part of a company that does things manually simply because it’s what the company knows and is comfortable with, and it seems more difficult to switch things over to digital than it’s worth.
We are here to tell you that switching all your HR needs to a digital platform will make your life infinitely better. And the process is not a difficult or time-consuming one, but rather a quick one that will end up saving you a whole lot of time and a whole lot of headaches.
In order to best master HR compliance, you need HR software. This will help you with all the tricky parts of hiring, firing, benefits, payroll, performance management, and much more. The tools in HR software will let you manage all employee records from a desktop application, as well as give your employees access to make changes on their own, without having to run everything by you via paperwork.
There are plenty of HR software options on the market, but the one that offers the best all-in-one HR toolbox is Zenefits. Zenefits provides all the features you need for employees, including compensation packages, employee onboarding, paid-time-off management, paid-time-off requests, employee management, and more. Using this tool will help to greatly increase the productivity of your employees, and your company as a whole.
6 Essential Strategies For HR Compliance
As an HR professional, you have a lot of different things to balance. Staying on top of laws and other regulations to keep all things in your company compliant is no easy task. To help make things simpler, there are some essential strategies that you can follow.
Using the Right Software
As mentioned above, HR compliance is achievable when you have the right tools. The best tool you can implement to keep things compliant is HR software.
However, the key is knowing which software is right for your company because they aren’t all made with the same type of business in mind. We already mentioned Zenefits as a great all-in-one tool, but there are other solid options for more specific needs. Gusto is best for small businesses who are struggling with payroll, Namely is best for mid-sized companies, while Freshteam is best for talent management. While they all have similar tools and abilities, some shine in specific areas better than others. Thus, it is key that you recognize the area of your business that needs help with HR compliance and find the right HR software that can help you get there.
Hiring the Right People
The hiring process is a crucial one to have sorted out for your company. We hope turnover rates are not high for your company, but we know that your company will be looking for new candidates at some point in time. And when you do so, you must follow various laws and regulations.
To keep everything compliant and not overlook anything regarding who you can hire, and who you can choose not to hire, you must have a strong hiring process in place that follows compliance policies and procedures. Not only do you need to keep in mind the specific staffing needs of your company, but you also need to keep in mind federal regulations and fair treatment.
Educating and Training Staff
Training staff is a crucial part of the hiring process, and though the roles in the company vary in terms of the exact training that is done, there are some parts that will be the same across the board.
To keep your HR department updated on all legal requirements that may change what compliance looks like, you need to update, educate, and train them on any and all of those regulatory requirements. Ensuring that your HR department has the most updated information is of the utmost importance. This will make sure that no compliance issues will be a surprise.
Creating an Employee Handbook
Every employee needs to start working at your company with the same base of information regarding policies and procedures. The best way to do this is with an employee handbook. This guide will be the place where your employees go to reference information about all sorts of things including payroll, benefits, time off, and more.
Not only does your company need to create a handbook, but you also need to be diligent about keeping it updated. Rules and regulations may change, as well as policies, and it is a legal requirement that your employees always have the most up-to-date information so that everything and everyone stays compliant.
Performing Compliance Audits
Auditing your company once in a while to ensure that everything is HR compliant is an important strategy to use in your process. This helps your company to avoid fines that may arise from issues you weren’t aware of.
In all areas of business, communication is key. However, it becomes especially important when it comes to HR compliance. Everyone in leadership positions needs to be aware of all HR compliance risks and ways to deal with any potential compliance issues that may arise.
Checking that everyone is on the same page and that everyone has an understanding of compliance helps to avoid penalties and fines.
Most Common Mistakes of HR Compliance
Because HR compliance can be a complicated process, that means there is room for mistakes. In addition to understanding the strategies we covered above, to help keep you from making those mistakes, you need to know the most common HR compliance errors. Knowing these ahead of time will help you keep them from happening in the first place and suffering the consequences of noncompliance.
- Not Updating the Employee Handbook. The employee handbook doesn’t have to be a massive book of rules, but it does need to always have the most up-to-date information. No matter how small a change is in any company policy or procedure, a new employee handbook needs to be given to each and every employee so that they may see those new changes and learn how they will be implemented. No matter how big or small your company is, an updated employee handbook is non-negotiable.
- Incomplete Employee Files. If you choose to keep all of your employee information in paper files, that is your decision. Though making everything digital will make your life and the lives of your employees much easier, however you choose to have employee files kept should be done in such a way that those files are complete. Employee files include all sorts of things such as leave forms, disability forms, I-9s, benefits information, and more. Not all of this information needs to be stored together – in fact, some documents that contain personal information should not be put in the same folder as employee performance files, as they are not relevant to each other.
- Not Documenting Performance Issues. Any violation that is made by an employee at any point in time, regarding any sort of issue needs to be documented thoroughly. It may seem like a waste of time to take down notes and put them in a file for an employee who continues to show up late to work, but it may come into play down the line when you are attempting to terminate an employee for poor job performance. You cannot make a case for this unless you have actual evidence supporting your claims.
- Poor Training. Some companies may feel that training is not a necessary part of the hiring process. However, no company should skip training, or do a poor job of training. Taking the time to properly train employees is key to their understanding of the position and the company, as well as key to their success in the position in the short and long term. Training is also where employees can learn more about HR compliance and their role in it.
HR compliance is not only important to keep your company out of legal trouble, it is also a way to show your employees that you respect them and that you have created a culture where their voices are heard, and where they are important. By following the rules, you avoid hefty fines and also create a great working environment for your employees. And, by implementing the right HR software, the process of HR compliance becomes less stressful for everyone.