HR compliance makes sure that your company is aligned with the regulations set forth by the Fair Labor Standards Act, which governs overtime pay and minimum wage for most American businesses. The requirements differ by each state, making it particularly important that you work with a payroll company that is cognizant of HR compliance.

HR compliance will also guarantee that your company or hiring practices aren’t a festering lawsuit. Smaller companies inadvertently skip over laws set forth by the Federal Civil Rights laws. Instead, many are relying on nepotism to recruit new workers. However, if your business is growing, it is important that payroll and HR compliance are working in tangent with local laws regarding hiring practices. This is especially important if you are looking to hire outside help.

HR compliancy partner will also make sure that your business manages benefit programs and compensation properly. Compensation laws are constantly changing, with laws as recently as 2014 being enacted. HR compliance will assure that benefit packages are in line with the Employee Retirement and Affordable Care Act.

Pitfalls Of Poor HR Compliancy That Can Be Mitigated

  • There are several areas of concerns for businesses who may not have a service that focuses on HR compliance. Some of these situations include:
  • The misclassification of employees. Depending on the nature of your business and its industry, it is important that employees are classified correctly as independent contractors, employee, or independent contractors. There may be tax issues if you misclassify your workers.
  • Lower Risk of audits. I-9 compliance can be a financial risk for your company. The Department of Homeland Security has conducted several investigations and audits. Even if you may not have concerns about your workers, I-9 compliance can be an issue with larger partnership agreements. HR compliance tools will ensure that that significant financial risk is mitigated