The Importance of Staying Labor Law Compliant

Employees are the life-source of every business, and it’s the primary objective of the human resources department to identify, hire and onboard the people who will help the company achieve its objectives. Amid this large job, human resources departments are also tasked with keeping a business compliant.

Over the years, laws regulating the relationships of employer-to-employee and employee-to-employee have become increasingly complicated as companies operate across multiple counties, states and countries. Laws such as the Fair Labor Standards Act, the Family and Medical Leave Act and the Uniform Services Employment and Reemployment Rights Acts also have the potential for other nuances based on a company’s location.

Protect from Risk
Keeping the company within compliance can easily become a full-time job because the laws and regulations governing compliance are far from static. Remaining abreast of the changes is a critical element to protect a company from becoming saddled with fines or worse, crippling lawsuits, bankruptcy or being shuttered completely.

Staying on top of compliance necessitates having a solid system for recordkeeping, timekeeping, payroll and tax updates. At any moment, anyone on the team should have the ability to generate a report. This includes the importance of creating regularly scheduled compliance audits, offering timely training for HR staff, hiring HR talent that understands the risk and instituting an ongoing initiative to communicate with internal and external stakeholders.

Avoid the Danger
One of the best ways to remain compliant is to remain aware of the many changes occurring in the industry regarding HR-specific laws and how to institute effective policies and procedures in response. While a one-size-fits-all approach will never apply, there are three main areas of compliance to watch.

1. Recruitment – Online hiring continues to change the landscape of recruitment compliance. New and evolving rules from the DOL, OFCCP, EEOC and other federal agencies make compliance a tricky endeavor, particularly for small- to medium-sized companies. HR teams must stay up-to-date on the implementation of non-discriminatory hiring practices. With the possibility of various pitfalls, it could be beneficial for smaller companies without a dedicated HR team to outsource hiring to a qualified staffing agency. Larger companies have the option to rely on an applicant tracking system, configured to specific requirements.
2. Onboarding – The completion of the I-9, used to verify identity and employment authorization, is a must for compliance. Companies should have I-9 forms for all current employees as well as those who have left through resignation or termination. Keep these for three years after the date of hire or one-year post-termination, whichever comes first. These should be easily accessible and available on request from an authorized government office.
3. People – A current employee handbook is critical for keeping the workforce informed about employee rights in relation to state and federal laws. This is a method to demonstrate compliance for a workforce and to provide consistent communication, so all employees receive the same information and understand their rights as it pertains to leave and other government mandates.

Moving Forward
Gone are the days when a company could keep written HR records or rely on spreadsheets. Take advantage of HR-centric software that can automate processes and eliminate the possibility of human error that could cost you significantly if a compliance error comes to light.

This article is brought to you by Staffing Kansas City, a full-service Kansas City employment agency that provides contract-to-hire, direct hire and contract employment placement services.