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HR Compliance: A Guide For Small Business Owners

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HR compliance is the business of ensuring your organization’s policies and practices meet legal and regulatory requirements. These requirements can vary based on your daily business operations and industry.

It is necessary to establish a culture of HR compliance as part of your overall strategy, one where the whole organization understands its commitments and rights under the law while taking note of actions that compromise compliance. The last thing you need as an owner is the heavy hand of the law coming after you with fines up the whazoo, threats and citations, all the while you are wishing you would’ve just taken a bit more time ensuring your compliance was covered.

From protecting your business financially, to safeguarding the brand, to promoting a healthy working environment, the benefits of focusing on HR compliance are immense.

Developing And Implementing An HR Compliance Strategy

The law can feel like a house of mirrors; nothing looks precisely as it is, and it can be confusing to find your way out. As your small business expands, new laws apply, which will require adaptability. Being adaptable in your business is key for thriving and ensuring you’re protected and ready from all angles. Areas that will need to be well conveyed through a detailed employee handbook coupled with HR compliance training include:

As a business owner, wages are much more than just paying your employees on time and accurately. By federal law, the Fair Labor Standards Act establishes minimum wage, overtime pay and proper timekeeping procedures. However, many states have their own wage laws, which adds a whole other layer of complexity to the mix. HR compliance tasks to note here are scheduling, pay, and hiring independent contractors, which can be simplified when managed by software. When managing schedules and wages, you need to understand the applicable statuses, pay in time and be thorough with record keeping.

Your employees are protected from discrimination in the workplace through several federal laws, many of which are governed by the Equal Employment Opportunity Commission (EEOC) which you must follow. Discrimination laws make it illegal to discriminate in employment while factoring in characteristics like race, color, religion, sex, nationality, disability, pregnancy, veteran, sexual orientation, gender identity or age as they are protected characteristics. Antidiscrimination laws also protect your employees who file discrimination complaints from any dismissal or punishment under retaliation by you. To comply with anti-discrimination laws, quality training and clear-cut policies are necessary.

Health And Safety
Long gone are the days where you thought the health and safety committee was “uncool.” It is essential to launch a safety program in your workplace with proper guidance in accordance with rules under OSHA or Worker’s Compensation, even if your workplace hazards are few and far between. Protocols help ensure minor accidents don’t escalate into something worse while preparing for significant risks like violence and natural disasters. To comply, make safety training mandatory, create protocols, have a regular practice of identifying hazards, and have a committee with set duties. This may sound tedious, but trust us, you’ll thank us later.

Under the immigration laws of the US Citizenship and Immigration Services (USCIS), small to medium (SMBs) businesses are required to employ only eligible workers which are either citizens of the country they operate or people with the authorization to work in the country. To ensure compliance with immigration laws, documentation should be reviewed regularly to ascertain genuineness, and records should be well maintained and stored.

Employee Leave And Absence
Employees who work in SMBs where there are over 50 workers are permitted to take unpaid leave under the Family Medical Leave Act (FMLA). This leave can last up to 12 weeks due to childbirth or adoption of a child, sickness, or illness of a qualified family member. Also, the law provides up to 26 weeks of military caregiver leave. Though you are not required to provide paid leave, you must allow an employee to return to the same job upon returning from leave and refrain from discrimination or retaliation. If you have less than 50 employees, your business is also subject to limited exemptions. For instance, in response to the pandemic, a temporary law was created requiring certain employers to provide paid sick leave to deal with COVID-19. To meet these requirements, your employees should be encouraged to give advanced notices for a smooth transition. Stay consistent with your policies and avoid making drastic employment decisions within 60 to 90 days after a covered leave.

Employee Benefits
The confidential employee health information must be protected by businesses under the law while prohibiting health insurers from discriminating based on genetic information provided by your employees in the area of health care plans. SMBs that offer health insurance must do so in accordance with the Act, which authorizes minimum waiting periods and eligibility standards for employees. You are also obliged to provide a summary of benefits to your employees, among other provisions. This can all seem to be a lot of information you might be feeling overwhelmed, that is okay – we’ve all been there! To ensure you are aligned with the legislation, experts such as your HR outsourcing specialist should be consulted for additional information while providing proper and secure storage for confidential data.

While creating compliant policies is critical, this is only half the job. As noted earlier, HR compliance is a combination of policy and practice. To avoid any hindrance in efforts, observe potential issues such as outdated policies, difficult employees, and disruptive managers. Fundamentally, compliance is meant to create a respectful culture that not only keeps you clear of risk, but that also makes your SMB a great place to work.