HR Compliance Checklist

Your HR Compliance Checklist: What to Include

Making sure your organization complies with all relevant laws and regulations is a key aspect of successful human resource management. What is involved in HR compliance and how can you get ready for an HR compliance audit? This blog post will clarify HR compliance and offer a detailed HR compliance checklist to assist in anticipating potential problems.

What is HR Compliance?

HR compliance is the act of ensuring that workplace policies, procedures, and practices adhere to relevant laws and regulations. These rules pertain to various areas such as job roles, workplace security, benefits management, and worker entitlements.

No matter the size of your company, it is crucial to regularly review your HR and benefits-related notices, records, and procedures to ensure legal compliance. Compliance is more than just steering clear of legal consequences; it involves creating a fair, secure, and welcoming work atmosphere.

Why is HR Compliance Important?

HR compliance is essential for avoiding legal penalties and creating a productive work culture. Non-compliance can lead to lawsuits, fines, and a damaged reputation. On the other hand, adhering to HR compliance standards helps build trust and respect among your employees, contributing to higher job satisfaction and retention rates. Finally, clear and compliant HR policies and processes decrease uncertainties in decision-making.

Your HR Compliance Checklist

Getting ready for an HR compliance audit may seem overwhelming, but a methodical strategy can help simplify the process. Here is an in-depth HR compliance checklist to confirm that your organization is prepared.

1. Laws and Regulations Concerning Employment

  • Job Descriptions: Ensure job descriptions, ads, and interviews comply with ADA and state laws on disability discrimination.
  • Background Checks: Ensure that written authorization is obtained for background checks, and Fair Credit Reporting Act requirements are satisfied, along with state requirements for conducting background checks.
  • Drug Testing: Ensure that policies and procedures related to drug testing, and consequences for violating drug policies are clear and consistently enforced in the workplace.
  • Employee Classification: Verify that employees are correctly classified as exempt or non-exempt under the Fair Labor Standards Act (FLSA).
  • Right to Work: Ensure all new employees have completed I-9 forms within 3 business days from the first day of work for pay and that these forms are up to date.
  • Equal Employment Opportunity: Maintain records that demonstrate compliance with EEO laws and that all hiring practices are non-discriminatory.
  • Onboarding: Orientation and onboarding programs should be ready for welcoming new employees and familiarizing them with your basic management practices.

2. Workplace Safety

  • OSHA Compliance: Conduct regular safety audits and training sessions to comply with Occupational Safety and Health Administration (OSHA) standards.
  • Incident Reporting: Keep detailed records of workplace accidents and incidents, and ensure they are reported as required.

3. Wage and Hour Laws

  • Payroll Records: Maintain accurate payroll records, including hours worked, overtime, and wages paid.
  • Minimum Wage Compliance: Pay all employees at least the minimum wage in accordance with federal, state, and local laws.
  • Overtime: Verify that all eligible employees are compensated for overtime as per legal requirements.

4. Benefits Administration

  • Health Insurance: Ensure compliance with the Affordable Care Act (ACA) and provide appropriate health coverage.
  • Retirement Plans: Maintain documentation and compliance for 401(k) and other retirement plans.
  • Vacation and Leave Policies: Review policies and procedures on paid vacation, holidays, and sick leave on a regular basis (including for compliance with FMLA or similar state laws), along with other benefits offered, such as flex-time and telecommuting.
  • COBRA: Provide employees required notices about continuation of health coverage under COBRA or state “mini-COBRA” laws, and fulfill all obligations for continuation coverage.

5. Employee Relations

  • Harassment and Discrimination Policies: Implement and regularly update anti-harassment and anti-discrimination policies. Conduct training sessions for employees.
  • Grievance Procedures: Establish clear procedures for handling employee complaints and grievances.
  • Employee Handbooks: Ensure that employee handbooks are comprehensive, up to date, and easily accessible. Each employee is to be provided a handbook explaining company policies and procedures for standards of conduct, nondiscrimination, benefits, and other terms and conditions of employment. (Be sure employees sign a receipt acknowledging that they have reviewed the handbook.)

6. Record Keeping

  • Personnel Files: Maintain up-to-date and secure personnel files for all employees.
  • Confidentiality: Securely store sensitive employee information and only provide access by authorized personnel. Keep medical records and other confidential documents in a separate file from personnel files. 
  • Employee Records Policies: Ensure procedures are in place for maintaining employee records and files as required by law, including designating the information to be collected, confidentiality, and how long to keep records.

7. Training and Development

  • Compliance Training: Provide regular training on compliance-related topics such as harassment prevention, workplace safety, and diversity and inclusion.
  • Documentation of Training: Keep detailed records of all training sessions, including attendance and materials covered.

8. Employee Performance and Reviews

  • Job Descriptions: Update and review annually employee job descriptions.
  • Job Expectations: Clearly communicate job expectations and responsibilities. And the performance standards by which they are measured.
  • Performance Reviews: Ensure employee performance reviews are based on specific, job-related criteria, and feedback provided is factual and complete. In addition, compare the employee’s performance against job descriptions and goals.
  • Documentation: Keep accurate documentation regarding performance for each employee and ensure that the documentation is direct, factual and detail-oriented to support disciplinary or other personnel decisions.

Preparing for an HR Compliance Audit

Taking the time to do a comprehensive HR compliance audit can not only help ensure compliance with applicable laws, but it also provides the opportunity to improve the effectiveness and efficiency of HR practices, such as enhancing employee performance, employee engagement, and attraction and retention.

Best practices suggest scheduling an audit at least once a year. To prepare for an HR compliance audit, consider the following steps:

  • Conduct Internal Audits: Regularly review your HR practices and HR compliance checklist to identify and address any compliance gaps.
  • Stay Informed: Keep abreast of changes in employment laws and regulations at the federal, state, and local levels.
  • Consult Experts: Consult with HR compliance experts or outsource HR functions to cover all aspects of compliance.

HR compliance is a critical aspect of managing a successful organization. By understanding what HR compliance entails and following a comprehensive checklist, you can ensure that your company not only meets legal requirements but also creates a positive and productive workplace. Regular audits and staying informed about regulatory changes will help you maintain compliance and avoid potential pitfalls.

Whether you’re an HR professional or a business owner considering HR outsourcing, a proactive approach to HR compliance will safeguard your organization and contribute to its long-term success.

Partnering with HRO Resources, the HR experts, can help you save money, improve efficiency and handle ALL or some of the HR functions of your organization.

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