Are your operating companies practicing HR compliance? Are they working on compliance issues in partnership with Finance? If you are a CEO, are you clear on the status of your company’s HR compliance? 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.
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 10 employees. You simply 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, but it can also be an expensive diligence red flag or roadblock if the company is looking to sell.
It’s very hard to keep up with all the rules – particularly now when most companies have a workforce that is working remotely, therefore geographically dispersed. Each city and state have unique rules around safety and sick time, disability coverages, hiring and termination practices, etc. It’s a lot to navigate. For many mid-sized companies that have a lone HR practitioner or maybe no HR team at all, it’s dangerous to navigate compliance without an outside expert.
Here are just some of the top compliance issues mid-sized companies are addressing on a regular basis:
- 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
Additionally, there are internal-facing compliance areas that require the establishment of best practices and training to correctly implement such as:
- 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
The role of HR in compliance
Compliance requires an organization-wide effort. Many compliance issues specifically require partnerships between Human Resources and Finance/Accounting which unfortunately, do not often happen naturally. A lack of partnership between these two, critical functions may result in an increase of compliance issues for the company. HR’s role is to stay on top of all compliance issues, ensure proper implementation, inform the broader organization and to create a culture of integrity. Businesses who 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 between Human Resources and Finance.
- Executive leaders who are champions of ethics and compliance.
How Growth Operators Eases 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. We hear from most of our clients that they just don’t know where they aren’t 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 to be addressed. Read this success story to see how we helped a company regroup on HR issues after management turnover.
We know how to partner with Finance and work side-by-side, embedded in the company, ensuring seamless delivery of plans and project execution. Growth Operators helps clients both pre-transaction and post-transaction get their HR house in order. This allows the organization to spend time focused on the business. Contact us today to learn more or ask us to complete an HR audit of your company. We’re ready to help.