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Maintaining HR Compliance: The Basics

Human Resources

Business owners face demands on their time from every direction and need to be able to wear many hats — including that of the Compliance Officer. But too often, business owners aren’t aware of the need to comply with human resource-related regulations until an enforcement agency contacts them, and by then it’s often too late; government agency auditors aren’t likely to give a casual reminder. Let's take a look at a few important compliance issues every business owner should be familiar with.

Common HR Compliance Issues

Form I-9

Form I-9 verifies both the identity of new employees and their authorization to work in the United States. If you have employees hired after November 6, 1986, you must ensure that Forms I-9 are completed timely and in compliance with Immigration and Customs Enforcement (ICE) audit standards, and that they are properly retained on file (a best practice is to retain them in consolidated, secure folders for active and terminated employees, outside of the general personnel file). With immigration issues coming into the legislative forefront — and audits having increased more than tenfold between 2007 and 2012 — Form I-9 should be on top of business owners’ compliance checklist.

Non-Discriminatory Hiring

Federal anti-discrimination laws enforced by the Equal Employment Opportunity Commission (EEOC) include the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), the Genetic Information Nondiscrimination Act (GINA), and Title VII of the Civil Rights Act of 1964, all of which prohibit discrimination in employment based on protected classes. Employers should ask themselves:

  • Do I know which federal, state, and local employment laws prohibiting discrimination in hiring apply to my business?
  • Have my managers been trained on these guidelines recently?
  • Do I have policies in place to communicate our efforts to comply with these regulations?
  • Have I analyzed company practices for making employment decisions including hiring, promotion, and access to training?

If not, business owners should take a closer look at ensuring a workplace free of discrimination in compliance with applicable federal, state, and local laws.

Exempt vs. Non-Exempt Status

The Fair Labor Standards Act’s regulations regarding employee classifications for exempt versus non-exempt status are often confused with the designation of hourly versus salaried employee payment methods. The Department of Labor (DOL), which is tasked with enforcing the Fair Labor Standards Act, aims to ensure employees are being paid in compliance with the federal wage and hour law. Under the law, employees are classified as either exempt or non-exempt from some or all of the provisions of the FLSA.  Non-exempt employees must be paid at least minimum wage for all hours worked up to 40 in a workweek and the applicable overtime rate for hours worked over 40 in a workweek. 

Ensuring HR compliance can be a tall order, but here are three pointers to get you started:

  1. First, conduct an internal audit of strengths and weaknesses of existing compliance levels. If unsure about where to begin, seek a subject matter expert’s advice or research requirements on the enforcing government agency's website.
  2. Ensure that anyone accountable for compliance in the organization is properly trained. Remember, supervisors and managers represent the business in day-to-day employment decisions.
  3. Finally, install a monitoring mechanism to ensure that internal processes for compliance are up to date and consistently followed.

Regardless of a business’s size or scale, timely and proactive compliance with federal, state, and local employment regulations is critical. With the frequency and scope of audits by government agencies increasing, organizations must comply with ever-changing regulatory mandates — or deal with the adverse consequences that may result from non-compliance.

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Jillienne Allgauer is a certified senior professional in human resources and has over twelve years of experience in human resources and a Chamber of Commerce member, business development. She holds a Bachelor’s Degree in business administration from the State University of New York at Geneseo and currently serves as an HR consultant for Paychex in West Palm Beach, FL.

This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.
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