Compliance Best Practices for Human Resources

by Carolyn Kick | Jan 13, 2022 | Compliance, Human Resources

Human Resource managers are vital to the success of an organization. They communicate with every level of an organization and consistently impact business activities – from recruitment and retention to continued training and compliance.

While HR is primarily concerned with the “human” aspect of a company, it is also necessarily interested in the ways team members relate with organizational, state, and federal regulations which govern the business’ operations.

Navigating these requirements is a complex undertaking often relegated to legal entities and compliance committees. But because of the wide-reaching applications of regulations, HR is particularly well-suited to positively affect compliance outcomes.

Effective compliance begins with people, policies, training, and communication, which is exactly what HR deals with daily.

HR’s Role in Compliance

Successful compliance begins and ends with the functions of Human Resources

So, what is it?

HR Compliance is the process of defining and implementing policies concerning current laws and regulations. From there, it is the insurance that employees acknowledge, understand, and comply with these policies.

While it might deal primarily with employment laws, most compliance regulations revolve around people’s behaviors.

Crucial in Corporate Compliance 

HR managers are a protecting force against the wide and varied threats to doing business. Beyond safeguarding employees through adherence to federal law, they also spearhead company efforts to mitigate risk at every turn.

HR is a far-reaching department, and thus communicates with employees at every level. Being responsible for hiring and training makes HR the best place to be for building an organizational culture of compliance.

Common Issues:

HR’s compliance management generally falls into three common categories:

1) Employment Law: This is the acronym department, featuring laws and regulations that apply specifically to Human Resources which include Family Medical and Leave Act (FMLA), hour and wage laws (Fair Labor Standards Act), anti-discrimination laws [Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act, Age Discrimination in Employment Act (ADEA)], and anti-harassment laws.

2) Employee Health and Safety (OSHA): While having traditionally covered hazards, HR has recently played a larger role in employee health and wellness. Research continues to show the benefits of healthy employees, resulting largely in higher rates of productivity, reduced benefits costs, and fewer sick days.

3) Hiring/ Firing Processes: While traditionally focused on labor relations and unions, this now includes a greater focus on immigration laws. Severing relationships with employees in such a way that does not invite problems or lawsuits have long been a primary function of HR.

Implementation of HR Compliance Best Practices

With the multitude of functions carried out by HR departments, how might HR managers most directly influence their company’s compliance efforts?

Let the Right Ones In

In other words, “hire the right people.” This is perhaps the most obvious answer to the question, but it is the most significant challenge in growing a business. But how do you define what the right person for the job looks like?

 There are multiple laws and regulations regarding onboarding, from the Fair Labor Standards Act to minimum wage and overtime rules. The ADA protects against disability discrimination, and the Age Discrimination in Employment Act protects those over 40 from similar discrimination. Thus, it is important to understand what regulations surround the onboarding process. 

Beyond legal considerations, another primary concern for HR is bringing in recruits who pose the least risk regarding continued HR compliance. Ethical red flags from previous employers can be multiplied in high-liability industries or roles.

The entire recruiting/hiring/onboarding process is in the purview of HR and sets a tone for an employee’s career at a company. It exerts a major influence on overall workplace culture, and culture is an effective measure of a company’s compliance.

Consistently Update Employee Handbook and Policies

There are a wide array of approaches to handbooks and individual policies. Some companies use a single handbook for the entire enterprise, others opt for department or individual-specific policies. Whatever the preferred method, HR usually has a hand in the writing and conveyance of these policies.

All too often these policies are thoughtfully created, then cast aside and neglected in day-to-day operations. In practice, they should be living documents, constantly adapting and changing. While the core might remain the same, the details will shift. When framed this way, these policy guidelines can have a real impact on an organization. Effective management should change and grow with regulations to ensure continued compliance

Regular reviews and revisions of policies come to nothing, however, if they are not shared with and lived by the teams they directly impact.

The Necessity of Two-Way Communication

Of course, communicating these constantly shifting expectations and policies can be points of friction. Impressing the importance of new policies is one thing, but making them resonant in day-to-day interactions can be another thing entirely.

This is where communicative leadership is vital. Consistent, clear communication from leadership will help increase employee buy-in and convey a sense of top-to-bottom accountability. Still, effective communication from leadership is only one facet.

Communication must also flow honestly and unimpeded from employees to leadership. Some employees may be able to address concerns with management directly, but others may prefer a less direct avenue of recourse. An anonymous whistleblower hotline is a fine example of a formal mechanism that solves this problem. But it cannot function without the informal aspect of HR and their willingness to hear individual concerns. Safety and processes need constant attention, and so addressing issues surrounding these concerns must be done promptly and effectively. If left unchecked, trust begins to erode between employee and employer.

Transparent communication is one of the highest goals for an organization. A hazard-free flow of communication with administrative bodies, as well as accountability in all offices has multiplying effects on regulatory compliance as well as workplace satisfaction. Win/win.

Train On Compliance Regularly

It is tempting to host one extravagant, day-long training on sexual harassment or diversity, have employees sign an attendance sheet, and leave it at that for another year. It seems simple and to the point, but if there is not a direct link to your company’s core values, this grand show might fall on deaf ears and blind eyes.

Instead, consider shorter, more personal online pieces of training that coincide with policy updates or general reviews.

Compliance should complement your core values. By personalizing messaging and making it a consistent pursuit, you increase the likelihood that your employees will internalize the training. Practicality and consistency are fundamental to this success.

In short, the integration of meaningful compliance training into your training schedule can have an immense impact on workplace culture; indeed, it should be a vital part of it.

Audit HR and Compliance Regularly

The other side of meaningful compliance training is the insurance of that training’s effectiveness. Enter the audit. Essentially, this is when HR teams look at hard data relating to regulations they interact with directly – dispute documentation, hiring processes, employee surveys, policy manuals, etc.

The aim is to diagnose issues before they turn into problems. It can shine a light on what is working, and what is not. Once a general landscape of current practices is illuminated, the organization can strategize ways to reach compliance, maintain it, or more effectively imbed it in their culture.

Of course, this type of audit requires a thorough understanding of applicable laws and industry best practices. It also comes with a non-insignificant time-cost alongside other day-to-day human resources compliance tasks. However, it is tremendously valuable in the continued legal successes of a business.

Get Started

Sounds good, right? What could be better than ensuring regulatory compliance and increasing a positive workplace culture at the same time? 

Then again, desire and action are not the same things. It can be taxing work, and oftentimes those most concerned with these issues are already wearing more than one hat in their organization. Luckily, there are steps you can take without attempting a full-fledged HR compliance audit yourself. You can educate yourself first. You can evaluate the state of your current HR policies and measure them alongside current regulations. You can seek third-party guidance through these issues. This is exactly what we do here at Launchways – we work alongside our clients to navigate the complexities of regulatory compliance. And we do much more than that too! Contact us to learn how else we can help.