How Do You Ensure HR Compliance?

Owning a small or medium-sized business comes with many challenges – many of which are behind the scenes. One of the biggest challenges is staying compliant with HR rules and regulations that govern benefits, employment processes, and HR administration. 60% of business owners admit to having problems with these obligations. If HR compliance is a constant worry for your business or compliance tasks are taking up increasing amounts of your and your team's time, it is probably time to search for a different process.  

In this guide, we discuss a few approaches business owners can take to make HR compliance more procedural, consistent, and successful. 

Business Owner's 6-Step HR Compliance Checklist 

From monitoring potential changes to educating employees, HR compliance involves a lot of different tasks. Use this HR compliance checklist to improve your results: 

1. Stay Up to Date on Relevant Laws and Regulations 

HR policies change frequently. National, state, and local governing bodies may impose new regulations, from changing PTO policies to requiring additional audit processes to ensure fair access to benefits. As a business owner, you must stay current on proposed changes, upcoming changes, and what processes are about to become outdated. You can better direct compliance efforts by changing your understanding and company policy documents to reflect up-to-date changes.  

HR regulations can change through multiple different paths, from emergency pandemic regulations to changes in tax and retirement benefits policies. Be sure to find reliable sources of information to help you ensure all of your documents and procedures reflect new changes as soon as possible. 

2. Develop and Implement Policies and Procedures 

Many businesses have unorganized or incomplete policy documents to direct their HR compliance efforts, and this lack will significantly complicate any compliance initiatives. We recommend: 

  • Creating policy documents for recruitment and hiring practices, compensation and benefits packages, termination procedures, and employee performance management 
  • Updating and refining these documents over time 
  • Keeping updated documents in an accessible, central location in the cloud 
  • Documenting employee consent to and awareness of policies 

PEO services can help you throughout every stage of this process, from designing policies or providing templates to keeping updated versions available for your team. 

3. Train Employees on HR Policies and Procedures 

Just like employees need to know the responsibilities and tasks of their role, they also need to know about the HR policies and requirements that guide their experience as your employee. Every employee should be aware of anti-harassment policies, their obligations to the workplace, the consequences of failing to comply with HR requirements, and their rights as an employee. Talk to your PEO about appropriate training and informational programs for new hires and general employees. 

4. Conduct Regular Audits 

Proactively manage your company's adherence to HR norms by regularly conducting internal audits. Strong audit practices include: 

  • Checking for areas of noncompliance in any facet of HR 
  • Enacting immediate action plans to correct noncompliance 
  • Thoroughly documenting audits, the results of the audits, and the steps taken to improve HR compliance 

5. Maintain Accurate Record-Keeping 

Thorough audit records aren't the only record-keeping obligations that HR compliance creates. It's just as essential to develop and maintain detailed, up-to-date records. Maintain (and keep secure) employee files, time sheets and schedules, payroll records, and benefits administration records. Accurate record-keeping protects your organization. It also improves HR compliance by keeping more eyes on the processes and allowing for more in-depth audits of historical data. 

Every state has different regulations regarding the stringent requirements for protecting and disposing of the information properly and how long your company needs to have the records available for third-party audits. By working with a PEO that stays up to date on these various requirements, you can better ensure that your records are accurate, comprehensive, and up to industry standards.  

6. Conduct Internal Investigations 

Violations may still happen no matter how earnestly you work toward complete HR compliance. Accidental nondiscrimination violations for tax-advantaged accounts, employee disputes, and incomplete records that aren't kept fully secure are urgent issues – and resolving incidents as quickly and responsibly as possible makes all the difference. One integral approach is conducting internal investigations to get to the bottom of potential violations.  

Proactive action can reduce your liability, increase employee confidence, and minimize damage to either specific individuals or your company brand. Be sure to outline your internal investigation processes and key decision-makers in a policy document. 

Working With a PEO Partner Can Help Ensure HR Compliance 

HR compliance is an essential tenet of business. You and your team don't have to struggle alone. If you need support to manage HR compliance and administration, a PEO like PRO Resources can create and maintain policy documents, administer benefits, manage payroll, and conduct audits or investigations to streamline HR compliance.  

Reach out to see how a trusted PEO partner can help you with every action item on this HR compliance checklist. 

Schedule a Consultation | PRO Resources HR


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