The Role of HR in Business Compliance

You know that there are several business compliance requirements you need to meet. You have everything under control, right? Maybe you do. The thing is, how confident are you that you can effectively stay abreast of all of the changes that happen at the national, state, and local levels?

Giving HR a seat at the table at your regular business meetings will ensure that you have a holistic view of your regulatory requirements. For example, imagine if you put an entire product launch together only to find out that you forgot to consider the Americans with Disabilities Act (ADA) compliance components? That would be expensive — not only because you would have to reformulate your approach, but if you didn’t catch it in time, you might:

• Have fines assessed
• Be caught up in lawsuits
• Suffer from negative publicity resulting in lost revenue

An HR representative can bring a holistic view of you regulatory requirements.

Your human resources partner can be a valuable asset at the business table if you recognize that in addition to their responsibilities of properly hiring staff to fill vacancies, they have a far more significant role.

HR is a cultural ambassador

It is true that a company’s culture starts at the top and trickles down. What you value and promote becomes what an effective leadership team communicates to the rest of the company.

When HR has a seat at the table during leadership meetings, there’s an opportunity for them to:

• Learn what you’re working to accomplish
• Understand your business goals
• Provide meaningful contribution to your business strategy
• Improve revenue
• Keep an eye on compliance-related issues

A lot of employee messaging comes out of HR. If your Human Resources executive regularly participates in business meetings, the organization’s culture is more likely to reflect the values you want everyone to embrace.

Significant HR-related business compliance topics

As you consider your day-to-day operations and projects, are you aware that there are many ways you can inadvertently violate regulations directly related to your people management processes?

There are several areas where you may be non-compliant without even realizing it.

Areas where you may not be compliant

• The Fair Labor Standards Act (FLSA): If an employee wants to bank time off instead of earning overtime pay, that’s ok, right? Not likely. Unless you flex a schedule within the same pay week, employees must receive actual financial compensation for overtime worked.
• The Patient Protection and Affordable Care Act (PPACA): Do you offer the same benefits and levels of opportunity for all employee groups regardless of previous illnesses or existing conditions?
• Employee Retirement Income Security Act (ERISA): Do you offer a 401(k), 403(b), or pension program? Does everyone have an equitable opportunity to earn within the systems based on their role?
• Family Medical and Leave Act (FMLA): Do you notify all employees about your FMLA policies, when they are eligible to participate, and what is required of them? If you don’t do this, who does?
• Occupational Safety and Health Administration (OSHA): Do you have all of your required employment signage available for employees to read? Have you cared for all safety-related issues in your organization?
• Equal Employment Opportunity Commission (EEOC): Many areas of your organization are touched by this regulation. This doesn’t only affect your Affirmative Action plans—which you must have documented, it also impacts how you handle sexual harassment, age discrimination, gender equality, and many other things. Do you have written, communicated, and enforced policies for each area?

These are just the most well-known regulations. Each has many subparts with which your company is responsible for complying. There are also several more employee-related regulations you need to know about.

During meetings, general business discussions often come up that touch on these regulations. However, if you don’t involve HR, you may not even be aware that you are creating a dangerous scenario for your company.

Improve your bottom line by utilizing HR in business compliance

Failure to comply with laws can result in hefty penalties.

Studies have shown that when human resources partners are included as part of management team discussions,  the results can be as significant as:

• Retention rates that are 38% higher than most companies experience
• Generation per employee of almost three times more revenue

Part of those improvements come from companies avoiding fines levied due to non-compliance with various regulations.

Failing to comply with those laws not only results in hefty penalties but also brings the “joy” (yes, that is very sarcastic) of regular visits from representatives of those various governmental agencies.

HR in business compliance — much more than an order taker

You expect everyone on your management team to contribute to the company’s success — HR should be no different. Therefore, to have an effective company and avoid compliance issues, have HR present during staff meetings. This will lead you to a more robust bottom line, healthier people culture, and a stronger communication process.