Conquering Compliance - The Role of HR

Is your organization practicing HR compliance? If you are a CEO, are you clear on your company’s HR compliance status? If not, it’s possible you could be on the receiving end of significant fines or business roadblocks you’ll be forced to repair, wasting time and resources.

HR compliance is a necessity when it comes to employee retirement plans, benefits programs, overtime compensation, and adhering to all applicable labor laws. The larger the organization, the more complex this becomes. Once a company reaches 50+ employees, compliance requirements change significantly. Yet, most organizations don’t realize this and continue operating as they did with ten employees. You don’t know what you don’t know.

Non-compliance can be expensive. Take non-compliant I-9s as an example: It can cost a company up to $2,500 per offense (per employee), and these fines add up quickly. It’s expensive in the case of an audit and can also be a costly due diligence roadblock if the company is looking to sell.

It’s challenging to keep up with all the rules – particularly now when most companies have a hybrid workforce that is working remotely, and possibly geographically dispersed. Each city and state has unique safety and sick time rules, disability coverages, hiring and termination practices, etc. In most cases, it’s incumbent upon the employer to abide by the laws applicable to the various localities where the employees are working (not where HQ is located). It’s a lot to navigate. For many mid-sized companies with a lone HR practitioner or maybe no HR team, it’s dangerous to navigate compliance without an outside expert.

Here are just some of the top compliance issues mid-sized companies are addressing regularly:

Fair Labor Standards Act (FLSA)
Affordable Care Act (ACA)
Family & Medical Leave Act (FMLA)
COBRA
EEO-1 Reporting
ERISA
Occupational Safety and Health Act (OSHA)
Equal Pay Act (EPA)
Americans with Disabilities Act (ADA)
Workplace Safety
Cybersecurity policies
Cannabis policies
Privacy
Pre-employment practices, such as background checks and drug testing

Additionally, there are internal-facing compliance areas that require the establishment of best practices and training to implement, such as: correctly

Recruitment practices, including inclusive and non-discriminatory job listings
Legal and appropriate interview questions
Compliant criminal background checks
Fiscally responsible Employee Retirement Plans
Secure storage of Employee Data
Impactful employee orientation and training
Compliant Leave of Absence policies and processes
Workers’ Compensation
Accurate and compliant payroll and tax payments

As the U.S. approaches the pivotal new year, the potential for significant shifts in labor and employment laws looms large. The transition years are a time of heightened uncertainty for employers, as changes in government policy affecting businesses can dramatically reshape the regulatory landscape. For employers, particularly those managing large workforces, it’s essential to anticipate these shifts, adapt their human resource management plans accordingly, and communicate effectively with their teams to maintain compliance and stability in the face of potential changes to federal labor policy.

State and local legislatures have been active in 2024 by passing laws and ordinances that impact employers of all sizes and industries. This does not include the landmark changes coming with the Paid Family Leave in many states, including Minnesota, or the changes already occurring in many states with Cannabis Legalization. Has your team taken the time to review these changes and crafted changes in policy and practice that will positively position you to engage and support your employees? Or are you hoping your Legal team will manage it for you?

Each year, Growth Operators helps dozens of Employers update and improve their policies and employment practices. With so much happening on the Legislative front, we expect to increase that production. Do you want to hope that your HR team or interim resource knows these changes, or do you want to lean into a team with deep experience in this area?

Compliance issues specifically require partnerships across the business, Legal, HR, Finance/Accounting, Operations, and Business Leadership, partnerships that, unfortunately, do not often happen naturally. A lack of partnership across any of these functions may result in an increase in compliance and employment issues for the company. Growth Operators partner with organizations to stay on top of all compliance issues, ensure proper implementation, inform the broader organization, and create a culture of integrity. Businesses that do this well have at a minimum:

Consistent employee communication and education with established channels for employees to ask questions and/or report unethical activity anonymously.
For organizations with geographically dispersed employees, clear two-way communication on core compliance areas for those not working at headquarters.
A planned cadence for timely review, adjustments, and execution of each unique compliance area.
Seamless communication with the Leadership team.
Executive leaders who are champions of ethics and compliance.

How Growth Operators Ease Compliance Issues

Growth Operators’ Human Resources professionals are experienced, compliance-savvy experts who know what to look for and how to fix issues quickly and correctly. Most of our clients tell us they don't know where they are measuring up from a compliance perspective. We can assess all areas of the HR function for compliance and ensure you have a clear plan for attacking any areas that need improvement.

Read this success story to see how we helped a company regroup on HR issues after management turnover.

Growth Operators help clients organize their HR departments. They are embedded in the company and ensure seamless plan delivery and project execution, allowing the organization to focus on the business.