May 30, 2022
HR compliance - 7 issues to watch out for
There are many factors involved in ensuring a company is lawful and legal at all times. If you employ just one part time employee, HR compliance becomes just one of those important factors that is critical to get right, right from the start. However, elements of it can be complicated and overwhelming to those that are not experts in the field. That being said, complexity will be no excuse if you are found to be breaking the law thanks to an approach to HR compliance which is found to be lacking.
Here, we provide a guide to HR compliance by explaining what it is and what are the legal compliance issues facing HR departments at the moment. In particular, we look at how COVID19 has changed the face of HR compliance due to the increased usage of remote working to maintain social distancing standards.
What is HR compliance?
HR compliance is the requirement for companies to adhere to laws, rules and regulations pertaining to employment and employees in the country they work. Different countries have different laws and approaches to HR and employment which is why HR compliance can become complicated.
However, it is imperative that it is right. Without proper HR compliance, your company is subject to penalties and fines of your business’s regulatory authority. Additionally, having an HR compliant company will also help promote a positive working environment where employees feel supported as well as ensuring that all hiring is done on a legal and proper basis. HR compliance also ensures that all employees receive the right benefits and entitlements - another way of promoting a good company culture, improved employee satisfaction and, as a result, employee retention.
An essential method that all companies can use to be HR compliant is through the use of employment contracts, NDAs and other relevant legal paperwork before hiring an individual. Effective contracts help underline what is required of both parties and as a result works to help improve the relationship between employees and their company. Everyone knows where they stand from the outset which minimises the scope for disagreements further down the line.
What are the legal compliance issues facing HR departments?
There are a number of critical issues that HR departments currently face, and will continue to face, in every business. Each department must ensure that it does everything it can to mitigate the risks that these issues can provoke so that companies stay on the right side of the law and employees are treated fairly.
- Anti discrimination
When hiring or firing employees, HR departments must ensure that it is done on a fair basis. Decisions that are made cannot be influenced by a person’s race, gender, ethnicity, age or any disability they may have.
Leave, particularly in the times of COVID19, requires companies to permit employees to extended periods of leave should their circumstances require it. Before COVID this would have meant situations where a person becomes ill with a long term sickness or maternity/paternity leave.
Now, in the times of COVID, companies must fully support their country’s government approach to stalling the growth of the disease. For many, this will mean allowing a period of self isolation if a family member tests positive.
- Benefits and entitlements
HR compliant companies will always provide the benefits an employee is entitled to. Benefits can vary from country to country but will often include health insurance policies, pension plans and holiday leave allowances for a year. In the US, that will mean adhering to the ACA, or Obamacare policy for example. Or, in the UK, providing a workplace pension for employees.
With greater global mobility comes the issue of only employing people who are entitled to work in your country. If you are employing a person, you must always ensure they have the right and legal documentation in place to verify who they are. If you’re in the EU, that means you have to know about the rules of free movement.
Employees have the right to work in a work safe environment - an idea that is key during pre vaccine COVID times. If a company is found to be lacking when it comes to the safety of its employees, not only is it subject to fines or penalties, they are also playing with the long term health of its employees. In the States, companies must therefore adhere to the Occupational Health and Safety Act, while in Europe the less obviously titled European Framework Directive 1989/391/EEC sets out the guidelines that must be followed with regard to employee safety. Both are still in place, despite more and more people working from home.
If your company is big enough to have enough employees that they can start a union, to be HR compliant, you must allow it. Unions can wield a lot of power on companies - for example in the UK, the nurses union in the NHS went on strike in an argument with the government over hours and pay. However, they are necessary as a means for workers to help improve their working lives. HR compliant companies must engage with unions in appropriate and respectful means.
- Wages and hours
Perhaps most critically, for your company to be HR compliant it must meet minimum wage requirements as well as pay fairly for overtime. Additionally, it must allow sufficient amounts of breaks as well as meet the strict rules with respect to child labour. Laws regarding minimum wages, hours and child labour vary greatly from country to country, which is why you must be well versed in your own juridsdiction’s own laws.
What is legal compliance in HR - overall takeaways
Legal compliance with respect to HR commitments is essential. Without it, employers can take advantage of their employees who are seeking to make an honest wage for themselves and their family.
Above all, it is crucial for HR departments to stay abreast of updates and modifications to any employment laws. Without being fully informed, they leave their company at risk of negligent or illegal behavior. At present, one of the biggest issues that companies face is ensuring that employees have a safe working environment due to COVID19 restrictions. However, firms must ensure they are covered legally if their employees are working from home.
Staying abreast of the relevant laws in your firm’s country has never been more crucial therefore. Our library of legal literature and software can be one of the ultimate ways you can ensure you always stay on the right side of the law.