How technology is helping solve the compliance conundrum

Keeping up with compliance, a moving target within the human resource space, affects employers of all sizes. And as compliance continues to grow more complicated, antiquated systems for staying on the right side of the law are being replaced by technology-driven solutions that can simplify success in reducing legal exposure.

One such solution–albeit, a hybrid service comprised of both technology and the human element–is the recently released ADP Compliance on Demand, a workforce-management platform designed to help employers perform employee timekeeping, scheduling, attendance and leave management in ways that simplify compliance with wage and hour regulations, according to David Palmieri, DVP, general manager at ADP.

“We recognize that business leaders and HR professionals alike need more than technology,” Palmieri says. “They need a partner with expertise that can be leveraged to design a solution for the unique complexities of their business. More than ever, organizations of all sizes are looking for ways to manage wage and hour compliance.”

According to ADP’s Palmieri, those specific headaches may entail fundamental matters such as absorbing a change like the new overtime rule, where worker classification and overtime pay are the focus, or more complex multi-state and jurisdictional pay- and work-rule compliance. In an ever-changing regulatory landscape at the federal, state and local levels, maintaining a culture of compliance can be especially challenging. ADP Compliance on Demand, he says, will save business leaders and HR professionals time and allow them to more easily respond to these multi-layered changes.

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With Compliance On Demand, ADP teamed up with the mega-employment law firm Littler Mendelson to enhance the service by incorporating Littler’s GPS knowledge repository and by offering access to Littler compliance experts through the helpdesk.

Sharad Gera, vice president of financial operations at Reading, Pa.-based Penske Truck Leasing, an ADP client, says the convenience of having one source that covers federal, state and local jurisdictions is a “huge timesaver.”

Gera says Penske operates in a very complex timekeeping and payroll environment, working across 48 states with union and non-union employees, noting that Compliance on Demand provides Penske with “timely, well-rounded perspectives” from ADP Compliance on Demand.

“That guidance and reassurance is extremely valuable,” Gera says.

Scott Forman, a shareholder at Littler, explains that the combined service will expedite access to compliance information and allow clients to proactively collaborate with their legal and HR teams.

“That synergy creates a culture of compliance that will not only lead to business growth, but also to employee satisfaction and wellbeing,” he says.

Caring for the Elderly, Complying with the Law

“Ongoing regulatory changes make HR compliance in the U.S. particularly difficult,” says Ted Malley, chief customer officer at Ceridian, which offers a compliance component within its Dayforce Payroll, Benefits, Workforce Management and Performance product. “It’s further complicated by the large number of jurisdictions with potentially conflicting regulations that can create uncertainty for HR when determining what is or isn’t allowed.”

In addition, Malley adds, many U.S. employers choose to turn to litigation to resolve disputes, an issue that increases the risk that a company will end up in court for a real or perceived violation of labor and employment laws.

“Many elements of compliance headaches could be minimized by adopting an effective HCM solution,” he says.

At MBK Senior Living, a Ceridian customer that offers independent-living, assisted-living and memory-care services to seniors across six states (Washington, Utah, Oregon, Colorado, California and Arizona), access to data helps the company maintain compliance in an increasingly complex industry.

According to Jeff Fischer, president of MBK Senior Living, based in Irvine, Calif., Dayforce helps the company automate its training records so that, if it has to show its records to an auditor or state regulator, MBK can easily pull them. With the fluctuations in the workforce and the high turnover that MBK Senior Living periodically faces, Fischer notes, it’s critically important for it to be organized and on top of compliance and training records.

“New technologies in the HR space are crucial to our success in the coming years,” he says. “With the shortage of talent, and us trying to find new ways to make our workforce more efficient, Dayforce helps further automate our processes and find ways to improve the lives of our employees.”

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Juliette Gust, founder and president of Ethics Suite, an online workplace-misconduct and fraud-reporting channel, says keeping current with regulatory changes around sexual-harassment and discrimination-reporting requirements means employers should check with outside counsel to ensure they’re complying with the most current regulatory framework. At the same time, while technology is a great way to manage the process, the emergence of platforms like social media carry high risk.

“We see instances where employees are reporting potential misconduct directly through social media. At times, these employees are circumventing an existing reporting program,” Gust says, adding it’s critical that employers have a meaningful and trusted program internally so employees feel they can report to the employer, and that the employer will follow up with actions necessary to address concerns or misconduct.

Should an issue become public via social media, employers face the additional challenge of rehabilitating their program and restoring any lost confidence in their ability to manage issues internally. Gust says steps should be taken to help the rehabilitation, including reiterating a strong commitment to compliance, implementing or reinvesting in an anonymous reporting platform, training employees on how to communicate issues and company policies, and communicating the steps the company will take to respond.

In fact, several surveys and studies support the benefits of providing an internal reporting platform with the ability to report anonymously, if desired, she says. The Association of Certified Fraud Examiners’ 2018 Report to the Nations on Occupational Fraud and Abuse survey results, for instance, indicated that 46% of fraud cases were detected by employee tips, and those organizations with hotlines suffered losses that were 50% smaller than those that did not offer a hotline.

Gust says the use of technology should be one of multiple options provided to employees for reporting wrongdoing (i.e., discuss with supervisor, HR or legal; or use anonymous-reporting tool via web, email or SMS). It should be supported by whistleblower and anti-retaliation policies that clearly communicate to everyone (including vendors and clients or customers) that the organization has a zero-tolerance policy for retaliation against any person who reports unethical or illegal behavior in good faith.

“Compliance is not a glamorous area. It is, however, an area where HR must get things exactly right,” concludes Ceridian’s Malley. “Leadership assumes HR will have this issue perfectly nailed down. Successful compliance relies on knowledge of the regulations, experience in applying them, and the appropriate processes and systems to maintain compliance day to day, week to week and year to year.”


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Tom Starner
Tom Starner is a freelance writer based in Philadelphia who has been covering the human resource space and all of its component processes for over two decades. He can be reached at [email protected].