Why Is HR Compliance So Important?

HR compliance involves defining specific policies and procedures that will make sure you can show that you thoroughly understand all applicable laws and regulations. This is important because if you don’t abide by these laws and regulations, you risk having hefty fines and penalties put on you that might even result in a damaged reputation. Since a damaged reputation can ruin your business, it’s easy to see why compliance is such an important issue. The right list of statutory compliance in HR can show you where your business stands now and what, if anything, you need to change to improve the situation.

Compliance Is Important for Everyone

If you’re a standard employee and not an HR person, it’s easy to think that compliance issues don’t affect you, but that is not really the case. All employers have to follow certain laws related to employment, and the one thing you should know is that ignorance of the law is not a legal excuse if you get caught in non-compliance. Some companies have even gone bankrupt because of lawsuits that have resulted from them being non-compliant in their HR policies. And audits can happen to any business, both small and large, local or global, so it’s better to adhere to these laws and regulations instead of taking a chance.

The leaders in the HR department have a responsibility to make sure they meet certain HR goals while remaining in compliance with applicable regulations at the same time. A clearly defined set of goals developed by HR is often the first step in making sure the business stays in compliance at all times. Some of these compliance requirements are related to things such as when and how the business pays people for overtime, understanding your responsibilities regarding health insurance and other employee benefits, and increasing diversity within the organization, among other things. Not all of these things are required by law, but if they are included in your list of goals, they have to be handled a certain way.

Things You Should Know

HR personnel are expected to know certain things in order to be in compliance with certain laws and regulations, including:

  • Implementing policies that let employees know the tools they are using to comply with these laws
  • Knowing which employment laws that prohibit discrimination in hiring apply to your business
  • Determining which managers have been properly trained on the laws and regulations

These are just some of the reasons why it is important for all businesses to have a good compliance policy in place.

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