PAYDAY Workforce Solutions Blog

In business operations, accounting may be responsible for processing payroll, but human resources has to partner with them to administer timekeeping policies, process timesheets, time off, raises, and other related items. When it comes to managing and developing a workforce, HR compliance is just as important as payroll compliance, and top payroll companies usually have an HR package that includes compliance as the focus. This is a proactive approach to HR compliance that assists HR and makes it easier for companies to stay compliant and keep up with employment rules and regulations.

Services for Compliance

HR features and functionality from top payroll companies normally include services to ensure their clients stay compliant. They can include compliance poster service, eAlerts or other reminders in printed form, online resources like portals for research and resolution, sample forms and checklists, job description templates, webinars and podcasts, and hotlines for live support.

Top Compliance Concerns

Top compliance concerns for employers include areas that payroll companies can help clients manage, including:

  • Worker Classification
    The Department of Labor Wage and Hour Division’s Worker Misclassification Initiative focuses on employee misclassification as independent contractors. HR and employers must properly classify employees and understand the difference between employee and independent contractor and exempt and non-exempt employees.
  • Form I-9 Issues
    The U.S. Citizenship and Immigration Services (USCIS) conducts worksite enforcement investigations which can result in audit notices, administrative fees, and even criminal prosecutions. I-9 compliance carries significant liability for employers because USCIS also metes out consequence for technical violations for not completing the form correctly. Companies including Abercrombie & Fitch have been slapped with million dollar settlements for technical violations.
  • EEOC Issues
    The Equal Employment Opportunity Commission is focusing on pregnancy discrimination, disability discrimination, retaliation claims, and the use of credit reports and criminal histories in the hiring process. EEOC Commissioner Chai Feldblum helped to draft and negotiate the Americans with Disabilities Act of 1990 and the ADA Amendments Act of 2008. Therefore, ADA compliance is increasingly important for HR professionals. The Agency is investigating use of credit reports and criminal histories and assessing millions of dollars in fines against companies like Pepsi for discrimination because of criminal background checks used to screen out applicants who were arrested but not convicted.

Cost of Non-Compliance

Workplace related lawsuits are won by the employees in 2 out of 3 times, and civil penalties are in the millions of dollars every year. In spite of this, the Department of Labor reports that 70 percent of American employers don’t follow the HR laws that apply to them. Third party HR experts and outsourced HR functions can help employers understand this area and how to get in compliance and stay in compliance to avoid financial consequences and criminal convictions.

Develop Effective HR Compliance

In order to comply with the ADA, EEOC, USCIS, Fair Labor Standards Act (FLSA), OSHA, antidiscrimination laws, sexual harassment, and the seemingly infinite amount of employment laws, you must know the laws in the first place. It can be exhausting trying to learn them all, much less remember them. This is where top payroll companies come in. Areas of compliance that payroll services with HR functions can help employers with include staying current with changing laws, getting good advice, creating an HR policy manual, training managers about compliance issues, listening for and paying attention to employees and managers, giving feedback, and documenting key decisions about things like employee evaluations and policies. With the help of the right service, a company can develop policies for compliance and communicate them to employees.

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