As the end of the year approaches, it’s time to review your HR policies and ensure they are up-to-date and compliant. HR compliance is intricate and constantly evolving. It's a complex issue that can’t be overlooked or hastily reviewed, as noncompliance can have severe long-term consequences.
Noncompliance can lead to significant penalties, damage to your reputation, decreased employee retention, and lower job satisfaction - all of which can have detrimental effects on your business. It's crucial to be proactive to mitigate these risks. Regular audits, education on legal changes, and consistent policy enforcement can safeguard your organization.
Moreover, a culture of compliance can enhance your company's image in the eyes of potential talent, customers, and partners, leading to better recruitment opportunities, customer trust, and strategic relationships. It also fosters a positive work environment, which is instrumental in boosting employee morale and engagement. Investing in HR compliance is not just about avoiding negative outcomes—it's about creating a solid foundation for your business's success and longevity.
Maintaining compliance is complex, so we’ve gathered a few things to consider as you wrap up the year.
What Is HR Compliance
HR compliance is the practice of adhering to all labor laws and regulations at the federal, state, and city levels.
- Federal laws: These broad regulations apply to all U.S. employers, covering minimum wage, anti-discrimination, and benefits. A few examples include the Fair Labor Standards Act (FLSA), Title VII of the Civil Rights Act, and the Affordable Care Act (ACA).
- State laws: Each state has its own set of employment laws that can expand upon or differ from federal regulations. These include higher minimum wages, stricter anti-discrimination laws, or different overtime pay requirements.
- Local laws: In some cases, local governments enact ordinances that affect employment practices within their jurisdictions. For example, some cities have their own paid sick leave requirements that are more generous than state or federal provisions.
Businesses that operate across multiple states face a magnified challenge when it comes to compliance. You must ensure you're not only meeting the federal baseline but also adhering to the varied requirements of each state in which you operate.
HR Compliance Checklist
To set yourself up for success, wrap up the year by reviewing and ensuring your HR policies are up to date. While it can be a lot to manage, a little work now will save you time and stress later. The following is a list to get you started:
OSHA regulations
- Assess and update your job safety and health training programs to ensure they are current and effective.
- Keep precise documentation of work-related injuries and illnesses using OSHA's Form 300 log.
- Evaluate personal protective equipment (PPE) needs to identify the required safety gear for employees.
- Post the official OSHA Job Safety and Health poster in a prominent location where all employees can see it.
- Establish and maintain transparent channels for employees to report workplace hazards or compliance issues without fear of retaliation.
Workers' compensation
- Ensure your business is compliant with state-level regulations for workers' compensation.
- Establish and maintain correct protocols for reporting and filing workers' compensation claims.
- Conduct an assessment of your workplace to confirm it's secure and hazard-free.
Employee information and W-2s
- Check your records and ensure you have updated addresses from your team to ensure they receive their W-2s immediately.
- Confirm you have all social security numbers or federal employer identification numbers (FEIN) to avoid penalties from the IRS.
Benefits and leave
- If you have 50 or more employees, you’re required to provide health care coverage under the ACA.
- Review employee classifications to ensure accurate benefit entitlements.
- Familiarize yourself with the Family and Medical Leave Act (FMLA), which allows up to 12 work weeks of leave annually and requires you to keep records for no less than three years.
- Review and communicate your leave application process to ensure employees understand how to request leave and the approval process.
- Perform a thorough examination of all benefit offerings to verify their adherence to regulatory standards.
Hiring practices
- Review your hiring practices and job postings. Avoid discriminatory language that would violate Title VII of the Civil Rights Act.
- Retrain your hiring managers on appropriate interview questions to avoid any illegal questions. For example, you can’t ask if someone has a disability or a medical condition. You can, however, ask if they will be able to perform the job with or without reasonable accommodation.
Onboarding
- Update your employee policies and ensure employees have easy access to them via an employee handbook.
- Review your onboarding process to ensure each new hire understands your company's policies and how to remain compliant.
While this checklist is comprehensive, it does not encompass everything your business needs to ensure compliance. You should revisit laws and regulations specific to your industry and location to ensure you haven’t missed anything.
How GMS Can Help
As a business owner, you may discover that you can no longer manage administrative tasks or keep up with the ins and outs of HR. That's where we come in. We manage a range of responsibilities for your business. From payroll tax to employee benefits, we focus on administrative work so you can focus on what truly matters in your business.
At GMS, we take HR off your plate. In addition, we offer four types of HR audit programs to meet your specific needs, including the following:
- Compliance audit: This focuses on how compliant your business is with federal, state, and local laws and regulations.
- Best practices audit: This audit reviews your competitive advantage by comparing your HR practices to proven best practices.
- Strategic audit: This audit helps identify your strengths and weaknesses and helps ensure your HR processes align with your organization’s strategic plan.
- Function-specific audit: Need help with something specific? We can run focused audits on areas such as payroll, hiring and onboarding, and risk management, to name a few.
For all of your HR needs, we’re here to help. We’ll connect you with one of our dedicated HR specialists who can lighten your load so you can focus on other areas of your business. Contact us today!