4 key steps to maintaining HR compliance

These days, managing HR compliance is like a game of Whac-A-Mole. As soon as you master an employment law in one jurisdiction, another one pops up. Furthermore, the perils of noncompliance are fierce: fines, penalties, potential class-action lawsuits–not to mention the hit to your company’s reputation.

Fortunately, there are key steps employers can take to stay on top of evolving labor legislation–starting with a basic, four-pronged strategy for maintaining daily HR compliance.

1. Develop a System for Staying Abreast of Labor Laws

In addition to 180 federal labor laws, employers face a tsunami of evolving state and municipal legislation. For example, while the federal minimum wage remains unchanged, 21 states raised their minimum wage on Jan. 1, 2020, or will do so later this year.

In addition, new paid-sick-leave laws, mandates on sexual-harassment training and anti-discrimination laws are springing up coast to coast. While some labor laws are widely publicized in advance–like the new federal overtime rule–others slip by largely unnoticed.

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How does your organization currently get its legislative news? If you aren’t receiving legal updates in a thorough, systematic way, you’re at higher risk of noncompliance. Make sure you have a foolproof alert system in place, as well as HR and employment-law experts on call to help you apply new laws correctly.

2. Treat Your HR Policies Like Works-in-Progress

Gone are the days of printing your employee handbook and expecting it to get you through the year with just a few minor addendums. Labor laws–and our understanding of them–are changing too frequently. Fortunately, thanks to HR technology, employers can publish their handbooks online, so employees can view the rules easily.

And your handbook is just the tip of the iceberg; it’s the HR policies behind it that demand constant scrutiny from your HR and management team.

See also: Compliance issues continue to concern employers

For example, when was the last time you updated your written grooming policy? If it refers to specific hairstyles like afros, dreadlocks or cornrows, you’re noncompliant–assuming you operate in New York or California. Both states recently passed workplace legislation that protects employees and job applicants from discrimination based on hairstyles. New Jersey is also considering such a law, and it’s expected others will follow suit.

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3. Implement a Rigorous Training Program for Managers

A surprising number of labor-compliance violations occur during interactions among frontline managers and their employees, especially in hourly-workforce environments. Too often, it’s because the manager simply didn’t know better.

From letting nonexempt employees work through their meal breaks to casually asking job applicants about their salary history, it’s easy for inexperienced managers to make mistakes.

Don’t assume that your managers–even experienced ones–understand the complex ins and outs of labor compliance. Make sure you have a comprehensive training program in place to keep them up to speed on new legislation and periodically refresh their knowledge.

4. Choose HR Software with Built-in Compliance Safeguards

Thanks to technological advances, HR software can now be one of employers’ most powerful tools when it comes to compliance.

Michelle Lanter Smith

For example, according to Seyfarth’s 2020 Workplace Class Action Litigation Report, last year’s largest class-action settlements involved basic wage and hour issues like failure to pay workers correctly (especially for overtime) and provide mandated meal breaks.

Robust time and attendance and payroll software can help eliminate such violations, while generating detailed audit reports that can be used to monitor compliance and counter potential lawsuits.

Similarly, some HR-software platforms include versatile online learning-management systems that allow employers to easily administer compliance training programs to both managers and employees. Employers can purchase professional courses or create their own, upload training videos and track the status of each person’s training.

Related: How technology is helping to solve the compliance conundrum

In addition, modern HR analytics gives employers another valuable oversight tool. For example, a good workforce-management system allows employers to track field managers’ edits to workers’ time and rates, both of which leave employers vulnerable to wage and hour complaints.

If your HR and payroll software doesn’t offer you these built-in compliance safeguards, it isn’t serving you as well as it could be.

Evolving labor legislation will continue to present challenges for employers, especially those that operate in multiple jurisdictions. That’s not going to change. However, employers have never had more effective tools and strategies for maintaining labor compliance–and no one is better equipped to leverage them than an informed, proactive HR team.


Michelle Lanter Smith is the chief marketing officer of EPAY Systems, where she oversees the company’s go-to-market strategy, customer success and technical-support operations. Michelle brings 20-plus years of leadership experience in driving revenue growth for high-tech and service-driven firms. She graduated summa cum laude from Marquette University, where she earned her bachelor of science degree in business administration. She holds a master of business administration degree with distinction from Northwestern University’s Kellogg School of Management.