Why Is It Important to Have HR Compliance for Your Business?
Human Resources (HR) is a key factor in any business equation with a long list of important responsibilities. In addition to onboarding, hiring, and termination, HR departments are responsible for making sure that your company remains compliant with employment laws and many who are new to human resources want to know — why is it important to have HR compliance for your business? Cahue Enterprises is available to help answer your questions and provide compliance support and consulting for your business.
What Is HR Compliance?
HR departments are not only responsible for the rules, regulations, policies, and procedures established by their own company — they are responsible for state, federal, and local employment laws. With employment laws and regulations always changing and evolving, it can be complicated to keep track of, making it even more crucial for HR departments to keep a close eye on compliance.
In the event that your company is audited for compliance and found non-compliant with laws and regulations, your company may face penalties that include — written warnings to address the issues, financial penalties or fees, cease and desist orders for business operations, criminal charges, and damage to your company’s reputation.
Examples of how a business can be non-compliant with employment laws include:
- Paying employees incorrect wages or less than minimum wage.
- Misclassifying employees in a way that violates wage, hour, and overtime laws.
- Violating anti-discrimination laws and policies.
- Failing to meet OSHA safety standards and regulations.
- Failing to provide protected leave and FMLA Leave for employees.
Different Types of HR Compliance
To illustrate why HR compliance is so important and can be complicated, we have highlighted the four different types and areas of compliance that HR departments are responsible for — Statutory, Regulatory, Contractual, and Union Law. HR departments need to have an understanding of these compliance requirements to protect your business from legal and financial penalties.
- Regulatory Compliance — This element of HR compliance covers regulations put forward by government agencies or departments. Government agencies that fall under the regulatory compliance umbrella include the Federal Trade Commission (FTC), the Environmental Protection Agency (EPA), the Department of Labor, and the Occupational Safety and Health Administration (OSHA).
- Statutory Compliance — This aspect of compliance is built around government laws and legislation that pertain to employment and the workplace. Primary examples of this type of compliance include minimum wage requirements, working age laws, and anti-discrimination legislation.
- Union Law Compliance — Businesses may employ a workforce that is made up of union workers and that adds another layer of compliance and rules for HR departments to consider. Examples of unions include the United Auto Workers, National Education Association, Teamsters, and more.
- Contractual Compliance — This area of compliance is specific to contracts with your employees, your company, and your business partners. HR departments must know and understand the rules and regulations established by contracts that pertain to your company.
Does your company have questions about HR compliance? You may be asking — why is it important to have HR compliance for your business? We hope that this breakdown of HR compliance created by Cahue Enterprises has helped you gain a better understanding of how HR compliance can impact your business and illustrated why it is important.
Contact Cahue Enterprises today for more information on our human resources business solutions!