Human resources (HR) compliance is important—but it can be tough to keep up with changes to laws on the local, state, and federal levels. However, companies who don’t adhere to all applicable employment laws could be exposed to significant legal risk. So, what are some of the evolving HR compliance issues your company may experience?
Examples of HR compliance issues
Here are some novel HR compliance challenges businesses may face:
- State and local rules: In addition to federal laws, businesses must also adhere to a slew of state and local laws and regulations. These may include laws related to salary history, Equal Employment Opportunity (EEO), paid sick leave, and reasonable accommodation.
- Talent acquisition and AI: The use of AI-powered recruitment tools has sparked concerns about bias. As a result, some states and cities require businesses to conduct bias audits and provide transparency regarding the use of such technology in hiring processes. Federal initiatives also aim to ensure compliance with civil rights laws.
- Non-compete agreements: Many states are restricting or outright banning non-compete agreements. In fact, the Federal Trade Commission has proposed new rules to limit their use or ban them entirely. With many state laws incurring steep penalties (per agreement), businesses must stay informed on these evolving regulations and review their employment contracts accordingly.
- Remote workers and local laws: Remote work has become quite popular, especially since the COVID-19 pandemic. With an increasingly dispersed workforce, businesses face various HR compliance issues including tax implications, anti-discrimination laws, non-compete agreement enforceability, and more. Companies need to understand the compliance requirements in every state where they have employees residing and working.
- Pay transparency and equity: Some states and cities mandate that employers disclose salary ranges for job positions. This forces businesses to adhere to these rules, and determine whether they apply to remote staff. Similarly, the Equal Pay Act ensures equal pay for equal work. This law covers all forms of compensation, including benefits. Businesses need to periodically assess their pay structures to determine whether they’re adhering to transparency and equity legislation.
- Minimum wage changes: Minimum wage laws are subject to frequent changes, both at the state and federal levels. For example, California recently raised the minimum wage for fast food and healthcare workers. Businesses need to stay updated and ensure that their employees are paid according to the current minimum wage requirements in their region.
In addition to these current issues, your organization should pay close attention to everyday HR compliance issues like proper worker classification, authorization to work in the United States, exempt vs. non-exempt status, and more.
How to keep up with HR compliance issues
Staying on top of HR compliance is crucial for businesses to avoid legal issues, fines, and reputational damage. However, keeping up with rapidly changing legal developments can be tough—especially for small businesses. Here are several strategies businesses can employ to remain compliant:
- Perform regular audits: Schedule regular audits to screen for HR compliance issues. Be sure to cover commonly challenging areas like job descriptions, compensation structures, and employment contracts.
- Stay updated: It’s important to stay informed on legislative changes at the federal, state, and local levels. This can be done by subscribing to HR compliance websites, newsletters, or associations, or choosing technology that will keep you up-to-date.
- Training and education: Provide ongoing training for HR personnel and management to ensure they understand any new compliance requirements, and how to implement them properly. Similarly, you should educate employees on company policies and relevant compliance issues, such as cybersecurity and data privacy.
- HR compliance technology: Businesses of all sizes can invest in HR compliance technology. There are many types of platforms to help you manage common compliance issues, including recruitment software and payroll software. Similarly, SixFifty’s HR compliance tools can help you generate necessary documents, like state-specific employee handbooks and compliant employment contracts.
- Consult legal experts: In addition to technological solutions, you can work with legal counsel or HR consultants who specialize in employment law to review your policies.
- Outsourcing: For complex HR compliance issues, consider outsourcing certain tasks, such as payroll processing or background checks, to specialized service providers.
- Maintain documentation: Maintain detailed records of all compliance-related activities, including audits, training sessions, policy changes, and legal consultations.
- Feedback mechanisms: Establish a system for employees to provide feedback or report compliance concerns. Ensure that reports are addressed promptly and confidentially.
- Embrace scalability: Keep in mind that compliance requirements can change as your business grows. Make sure that whichever compliance tools or services you choose, your HR compliance efforts are scalable and adaptable to accommodate expansion.
Stay compliant with SixFifty
By incorporating HR compliance technology and the strategies above, businesses can create a proactive approach to compliance management. SixFifty’s employment tools make it easy to deal with HR compliance issues in all 50- states. We help employers create and customize their own compliant HR-related documents. Best of all, our legal team watches for changes to employment legislation across the country. If laws and regulations change, you’ll be notified promptly.
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