HR Tech Primer: What is Compliance Management

What is Compliance Management?

Compliance Management is the act of ensuring a group of people in an organization are following a prescribed set of rules. The rules are referred to as Compliance Benchmarks or Compliance Standards. Compliance Management comprises of a blend of procedures, policies, audits, security controls, documentation, and tech enforcements. It also includes companies following a set of regulations laid down by the governments, regulatory bodies, and employee unions.

The HR department is an important function of any organization that looks into the hiring, employee retention, and training and development aspects, among many others. It is involved in all functions of the employee lifecycle from recruitment to retirement. HR is also an intrinsic part of the organizations’ compliance structure.

Why Compliance Management Matters?

Keeping up to date with state and federal legislation is tough for businesses. It is a necessity for growing organizations to comply with ever-changing laws and manage personnel better. Non-compliance may result in penalties and even potential jail-terms for Senior Management. HR teams are expected to ensure that companies treat their employees fairly and operate legally.

In a nutshell, Compliance Management is important for organizations because they need to adhere to the employment laws, rules, and regulations in all locations that they operate from. HR teams have to follow fair employment policies and prevent any workplace discrimination while ensuring that employees are reasonably compensated.

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What Compliance Issues Do American HR Executives Look Into?

1. Wage and Hour Laws

The Fair Labor Standards Acts (FLSA) lays down strict guidelines regarding wage and hour laws in the US. It has policies in place that govern the minimum requirements for hours worked, minimum wage, overtime, recess and meal timings, and child labor. Different states have adopted different minimum hourly rates. It falls under the purview of the HR Manager to ensure that the company is following the laws in accordance with the region of operation.

2. Anti-discrimination Laws

It is illegal to discriminate in the workplace based on factors such as age, color, race, sex, disability, or ethnicity. Additionally, discrimination based on veteran status or genetic information is also disallowed. There are strict laws in place to keep a check on any kind of workplace discrimination.

Title VII of the Civil Rights Act of 1964 prohibits prejudices on the basis of color, race, sex, or ethnicity. Any kind of sexual harassment also falls under the same title.

There are other acts including The ADA (Americans with Disabilities Act) and ADEA (The Age Discrimination in Employment Act) that prohibit employers from discriminating based on disabilities and ages of the employees respectively. The Equal Pay Act (EPA) prohibits sex-based wage discrimination between male and female workers. Additionally, there is the Pregnancy Discrimination Act of 1978 that makes sure no discrimination happens on the basis of pregnancy, childbirth, or related medical conditions.

These laws make it important for the HR teams to let go of any assumptions based on the age of the employees and to judge them solely on the basis of their performances.

3. Immigration Laws

Workplace diversity is a major area for HR leaders to concentrate on. Immigrant workers form an integral part of a diverse ecosystem. It is the responsibility of the HR department to make sure that rules laid down by the government are followed while hiring immigrants and overseas professionals. There are numerous laws in place for organizations to take note. 

The Immigration and Nationality Act (INA), the Immigration Reform and Control Act of 1986 (IRCA), the Immigration Act of 1990 and the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA) are some of the notable acts that govern the employment of immigrants in the USA. HR leaders are required to check for and follow guidelines while recruiting professionals, keeping in mind they don’t introduce any form of discrimination.

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4. Safety Laws

It is important to provide employees with necessary safety instructions and kits as per the nature of the work they are expected to perform. Occupational Health and Safety Administration​ (OSHA) governs workplace safety norms in the US and has come up with the OSH (Occupational Health and Safety) Act in order to make sure employees work under protected conditions. It falls under the umbrella of the HR department to ensure that the safety laws are adhered to.

5. Family and Medical Leave Laws

The FMLA (Family and Medical Leave Act) has been created to help workers maintain a balance between their professional and personal lives. All public agencies in the US, all elementary and secondary schools (both public and private), and business establishments having 50 or more staff members fall under the scope of FMLA. As per FMLA, employers need to provide eligible employees with up to 12 weeks of unpaid, job-protected leave annually.

FMLA also requires all employers to maintain the group health benefits of the employees while they are on leave. Additionally, it strives for equal employment opportunities for men and women. Any employee can avail FMLA due to the following reasons:

  • To take rest and treatment during serious health conditions.
  • To take care of an immediate family member with serious health conditions.
  • For the birth and care of a newborn child.
  •  For placement with the employee of a child for adoption or foster care.

Why is Compliance Software Necessary?

In addition to the mandatory laws, there are also employee benefits for HR teams to look into. The HIPAA (Health Insurance Portability and Accountability Act​), the COBRA (Consolidated Omnibus Budget Reconciliation Act) the ERISA (Employment Retirement Income Security Act of 1974) and the ACA (Affordable Care Act or “Obamacare”) are some of the notable laws pertaining to benefits. 

As organizations keep growing their workforce and operations, tracking compliances and monitoring those becomes a mammoth task. This is where Compliance Management tools come in. A lot of companies have stepped up to provide organizations with compliance solutions to help them stay away from legal troubles.

Some of the renowned HR Compliance Software/Platforms include:

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