Avoiding HR compliance related lawsuits, penalties, and fines is one of the many reasons that HR is so important to organizations. HR compliance affects a range of HR functions from employee recruitment to payroll, benefits, and safety standards. HR compliance requires the creation and implementation of HR policies and procedures that follow federal and Hawaii labor and employment laws.
Many small business owners feel overwhelmed with keeping up with labor and employment laws and regulations. This is understandable because it is a big job to stay on top of changes and understand all the different laws. Effective HR leadership helps companies maintain legal compliance. Whether you choose to partner with a Professional Employer Organization (PEO) or hire an in-house team, it’s important to have an HR expert on board to keep you on track. If you’re a small business owner, read on to learn the best ways to uphold HR compliance so you can avoid major headaches down the road.
6 Steps to Ensure HR Compliance
Owning a business comes with many responsibilities and HR compliance is one of the most important. While it takes effort to ensure you are following employment laws, it is well worth it to avoid potential legal trouble. Use these six steps to help ensure HR compliance in your business:
1. Hire or partner with experienced HR help
Small business owners don’t usually have the need (or the budget) for hiring an in-house HR team. And yet, small businesses need HR expertise as much as a large business.
Here are a couple options:
- If you prefer to have in-house help, an experienced HR generalist could be the way to go.
- If you don’t want to hire an employee, partnering with a PEO is a great option.
2. Have HR write clear policies and procedures
Now that you have your HR help in place, it’s time to write clear policies and procedures for your employees to follow – ideally in an employee handbook. Your HR partner must write all policies and procedures in accordance with federal, state, and local laws and rules but they should also take into account your unique business needs. For example, your anti-discrimination policy must at-minimum follow all employment laws but you may wish to add additional elements to your business’ anti-discrimination policy.
3. Make HR compliance a part of employee training
Writing an employee handbook is useless if it never sees the light of day. Make sure to communicate and train your employees on your policies and procedures to help ensure they stay compliant – and you avoid harassment claims. Compliance training should be a part of new-hire training but it is also a good idea to provide an annual refresher for existing employees. Your HR team or an external group can facilitate this training online or in-person, depending on the sensitivity or difficulty of communicating the topic.
4. Investigate employee complaints in a thorough and timely way
There is no sense in creating great safety, harassment, and discrimination policies and procedures if you aren’t going to follow through on employee complaints. If employees know that you will investigate their complaints thoroughly and in a reasonable timeframe, you will gain their trust and a reputation as a good place to work. Follow the procedure laid out in your employee handbook for investigating complaints and be sure to follow-up with the individual to make sure they feel the issue was handled adequately.
5. Take appropriate disciplinary action based on your policies
Once the investigation is complete, carry out any appropriate disciplinary action as outlined in your employee handbook. Having the policy laid out clearly (and following through with it in a fair way) is an important part of HR compliance. Whether the next steps are a verbal or written warning, separating employees from working next to each other, a suspension, or even a termination; it’s important to follow through on your policy.
6. Always keep proper records
Any disciplinary steps taken should be property documented to help protect your business from a discrimination lawsuit down the road. For example, if it is deemed appropriate to terminate the accused, then you will have a paper trail that investigators can follow to show that they were not wrongfully terminated.
Not excited about employer laws? That’s okay; we’ve got you covered through HR outsourcing! When you partner with Makai HR you can get on with the business you are trying to grow while we take care of your employee needs from payroll to taxes, health insurance/benefits and worker’s compensation. You also gain peace of mind that you are compliant with all of Hawaii’s employer laws (if you’ve ever looked you know that the list is very long and changes happen). When choosing a PEO to partner with, there are many things to consider including cost, services, and technology solutions.
With the cost of doing business in Hawaii at record highs, we know how important it is to keep labor costs in line with revenue. Our plans are priced competitively and include value-added services like time-in/time-out systems. Our three tiers of PEO service plans are tailored to the size of your business and specific needs. We offer a 100% paperless solution which means that your employees can manage their needs through a computer, tablet, or phone. We can truly improve your employees’ work benefits while freeing you up to run your business.
What are you waiting for? Companies that partner with a PEO benefit from 7-9% faster growth, 10-14% lower employee turnover; and they are 50% less likely to go out of business. Contact us today to get started!