5 Compliance Conundrums Every HR Team Needs to Solve

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HR Insights for ProfessionalsThe latest thought leadership for HR pros

Wednesday, April 7, 2021

Compliance with the latest laws and regulations is a vital task for any HR team. Failure to get it right could lead to serious repercussions for the business.

Article 4 Minutes

The job of the HR department is nothing if not diverse. You spend a lot of time working with people and focusing on activities like recruitment and employee relations. But you also have to dedicate time to paperwork and admin functions like payroll.

One of the most important functions of HR - albeit one that doesn't always get a lot of attention - is compliance.

To protect the business from significant risks like financial repercussions and reputational damage, your team needs to stay up to date with relevant areas of legislation and how they affect you.

1.    GDPR

Introduced in the European Union in May 2018, the General Data Protection Regulation (GDPR) is one of the most significant articles of legislation to come into effect for businesses in recent years. It applies to all organizations operating within the EU and those that offer goods and services to people living there.

GDPR encompasses a wide range of data protection and personal privacy rules that have various implications for HR. All members of the team need to be familiar with regulations and legal obligations such as:

  • Ensuring personal data isn’t held for longer than necessary
  • Demonstrating a legal basis for acquiring and/or using personal data
  • Responding to personal data requests within one month
  • Keeping employee records accurate and up to date
  • Informing the relevant supervisory authority within 72 hours if the business experiences a personal data breach

The HR department might also need to consider appointing a data protection officer who can take the lead on these issues.

It's not just in the EU that regulators have toughened up the rules around personal data, with US businesses seeing the California Consumer Privacy Act come into force in June 2018.

2.    Preventing illegal working

All employers have a responsibility to ensure the people on their payroll are working legally. A key part of that is complying with immigration laws and making sure you're only employing people who have legal authorization to work in your country.

In nations like Australia, employers have to show that any employees who aren't national citizens have the relevant work visas or other documentation certifying their right to work in the country.

The UK uses a system of 'right to work' checks that all employers must carry out before hiring someone, while businesses operating in the US need to be familiar with laws like the Immigration and Nationality Act, particularly in terms of their significance for recruitment and verifying candidate eligibility.

3.    Wages and hours

Payroll compliance should always be a top priority for HR, possibly with the help of the finance department.

Managing your payroll is a much bigger task than simply making sure people get their wages on time. To avoid any unpleasant shocks or financial penalties down the line, you need to be sure you’re sticking to the rules when it comes to things like tax deductions and pension contributions.

As well as monitoring whether people are being paid and taxed in line with the law, you also need to ensure employees aren't working excessively. Regulations such as the EU's Working Time Directive provide a useful framework to make sure:

  • Your staff aren't exceeding recommended maximum working hours
  • People are receiving proper rest breaks
  • Special measures and protections are in place for night work

As well as helping you stay in compliance with rules and regulations, these are generally good practices to support employee wellbeing and enable a good work/life balance.

4.    Equality and discrimination

Workplace equality is now enshrined in law in many countries and regions. For example, in Australia, the Workplace Gender Equality Act 2012 requires employers to adhere to practices including the annual submission of data on a range of gender equality indicators, such as equal remuneration between men and women.

EU law makes it illegal for employers to discriminate against individuals on grounds such as:

  • Age
  • Sex
  • Disability
  • Ethnic or racial origin
  • Religion or belief
  • Sexual orientation

It's the responsibility of the HR team to ensure the relevant people within the business are aware of the latest developments in equality and discrimination legislation. It's vital to ensure these rules are reflected in your recruitment and workforce management practices.

5.    Health and safety

As part of every employer's duty of care to protect the wellbeing of its employees and provide a safe working environment, the HR department needs to ensure the business complies with the latest health and safety legislation.

That means being familiar with laws like the Occupational Safety and Health Act, which applies to businesses in the US, and the latest directives in the EU.

Keeping up with these rules is essential from a compliance perspective, but it also shows you're taking a proactive and responsible approach to looking after your workforce. This is likely to have a range of positive effects, including happier and more engaged employees, increased productivity and a stronger employer brand.

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