What Is the Role of HR Compliance?

Quick quiz: Who does Human Resources (HR) exist to protect?

The answer is and always will be the company.

For business owners and executive teams, paying attention to the functions of HR departments is in the company’s best interests. HR departments are people managers and support business needs and normal operating procedures. A large aspect of this comes through compliance.

HR compliance is one of the most essential principles of a successful company. Closely following rapidly changing labor laws prevents potential legal issues. HR Compliance is not a ‘one and done’ job. It is constantly changing and evolving.

The compliance officer is in charge of adhering to the law on a macroscale and enforcing internal company-wide rules. Never underestimate the skills of a talented HR compliance officer.

Let’s dive into what exactly compliance is and the role an HR compliance officer plays.

Workplace Safety

The Occupational Safety and Health Act (OSHA) enacted in 1970 helps ensure safe conditions for workers in all positions.

It is up to HR compliance to understand all the protections in place as detailed in the law. Compliance also means keeping up a detailed record of every action taken that supports OSHA.

Any establishment that falls under OSHA’s domain is subject to an inspection from a governmental compliance officer. HR must perform its duties to avoid any penalties, fines, or even an entire shutdown.

Workplace safety also helps keep businesses free from legal action. When workers are thoroughly protected, there is less chance of accidents in which the company could be considered liable.

Compliance in terms of OSHA keeps individuals free from harm, avoids governmental interference, and protects the company from legal action.

Fair Labor Practices

Another law that the HR compliance officer must enforce is the Fair Labor Standards Act (FLSA). This act covers minimum wage, overtime pay, and child labor laws.

While the FLSA is a federal regulation, each state also has individual laws that only apply within the state.

HR compliance requires making sure each employee is fairly compensated for their time. This also includes differentiating between exempt and nonexempt employees. The most crucial difference is that nonexempt employees are entitled to overtime pay, while exempt employees are not.

The most common lawsuit brought against businesses by employees concerns the Fair Labor Standards Act. Therefore, it is of the utmost importance to practice to-the-letter compliance when it comes to FLSA.

Discrimination Prevention

Without HR compliance, many businesses could unwittingly violate both the Title VII of the Civil Rights Act of 1964 and the Americans With Disabilities Act (ADA).

Title VII declares that no person is allowed to discriminate in employment “based on race, color, religion, sex and national origin.” HR compliance must offer guidance for all employment decisions to ensure the process does not violate Title VII.

ADA has many specific regulations for the complexity of business operations. The height of signs, the color of text, accessibility, types of doors, and more are all covered in this sweeping act. Even one infraction can mean unfavorable news for a company just starting.

Always hire a compliance officer before you begin construction on any brick-and-mortar buildings. Get ADA compliance right the first time to avoid any significant renovations or changes later down the road.

Preventing discrimination also makes your business come across as inclusive and friendly for all prospective clients and employees.

Company-Wide Resources

While HR compliance needs to know the nitty-gritty details of rules and regulations, everyone must play their part. Human resources departments provide information and materials so that everyone can stay compliant.

Part of this comes through employee training to learn to watch out for any violations in the workforce. When everyone works together to protect both their own and the company’s interests, compliance becomes simpler.

A good officer supports the team and encourages conversation about laws and regulations instead of explaining HR compliance like a hawk always watching the employees below.

Often, annual updates are necessary as laws will adjust and change over time. When the team is in the loop, everyone works better.

When a new teammate joins, they should receive an employee handbook. This handbook will explain both routine operating procedures and the standards and practices of the company. It should be signed and returned before the employee receives their first paycheck. Always make sure a lawyer reviews this document before distributing it.

Internal Conflict Mediation and Resolution

Any work-related incidents should first warrant an internal investigation. Ideally, the parties involved can reach an agreement without introducing any outside lawyers into the mix.

HR compliance should always offer solutions to avoid similar problems from happening again in the future. If a physical accident occurs, it might require a complete audit of all the equipment. Re-training may also be necessary to ensure all employees are working safely and correctly.

In the case of discrimination cases, sensitivity training may be in order. These solutions need to apply to everyone in the company, and everyone must be held accountable.

While HR does not want internal issues being made public, no one should be exempt from standards. Compliance affects everyone, and an objective HR officer knows that not being transparent can have serious consequences.

Data Protection

So much work these days takes place online, in the cloud, and away from the in-person office. It means everyone’s data is constantly being transferred and monitored.

Modern HR compliance is in charge of understanding cyber security and keeping data safe and out of the wrong hands.

Many states have laws regarding data protection compliance. While this is still a new aspect of HR, the current parameters are still evolving every day.

The United States does not currently have a federal data protection act in place. But Europe’s General Data Protection Regulation provides a framework that many organizations around the world have adopted.

Without full knowledge of data protection, any company is at risk of fraud and spyware. Encrypted emails and messages are more and more popular as a safer way to communicate.

Advanced HR compliance teams can protect your company against modern data breaches.

Safe Hiring Practices

Hiring the right person takes more than a firm handshake and confidence these days.

All hiring requires a background check conducted by the HR compliance officer. It is the responsibility of HR only to verify that hiring teams bring on fully qualified, reputable employees.

Criminal records, motor vehicle records, education verification, and references are necessary to ensure suitable hires. . Adhere to compliance needs and be confident only the right people step foot in your place of business.

HR compliance also must make sure all hiring strictly follows the Fair Credit Reporting Act. The FCRA details fairness and clarity in all consumer reporting agencies.

Conclusion

When it comes to hiring, background checks are your friend. Hiring and compliance go hand in hand. Never miss a step again.

Scout Logic is here to help. We offer background checks for all your needs. At Scout Logic, compliance is one of our core principles. Trust us to know even the smallest detail about every regulation.

Plus, we know that one size does not fit all. That’s why we are proud to offer a service model that partners your hiring team with a Scout specialist who is there every step of the way. They will keep you updated on all steps of the background check, so your team is always fully prepared.

Get in touch with ScoutLogic and request your FREE assessment today!

David Garcia

David Garcia, co-founder and CEO of Scout Logic, is an industry leader in the bulk background check world. With his strategic acumen and expertise in the HR sphere, specifically in hiring, recruiting, legal compliance, background checks, and resume screening, he’s an invaluable asset and consultant.

David's counsel extends across the boards of ScoutLogic, YipitData, and Supplier.io, drawing from his impactful stints on the boards of Infutor and Avetta. With an extensive 25-year journey, he champions unparalleled B2B commercial leadership within data & analytics, significantly shaping the HR landscape.