5 aspects of HR compliance to consider during your HRMS selection

For any business, large or small, there's no shortage of employment/labor law and regulations (and just plain good practice) that must be complied with. Being an employer can be a complicated headache. Which is why the right software can be like an aspirin, automating the whole issue and vastly reducing the risk of non-compliance.

This is one of a series of overview articles, looking at the available features in different HR-related software apps. When it comes to HR compliance, the necessary functionality will change from country to country, according to the legislation. For the sake of example, what follows is a focus on US federal law but wherever you carry on your business, there will be similar requirements… and similar software to take care of them for you.

1. Recruitment

The main consideration during the hiring process is avoiding discriminatory practices that might leave the business open to a claim. Job advertisements, interviewer questions, reference checks, and so on are all open to risk of prejudice on grounds of race, ethnicity, religion, marital or family status, physical or mental disability, gender, age and possibly sexual orientation. HR compliance features built into the software can at least ensure that all communications (invitations to interview, offer letters, etc.) are solid.

2. EEOC compliance

The US’s Equal Employment Opportunity Commission is charged with guarding against the abovementioned discriminatory practices. Common recruitment practice is to ask successful job candidates to fill out an EEO self-identification questionnaire. Again, the right software will come with fully compliant questionnaires and also ensure that the resulting information is used in the appropriate manner, including reporting on the diversity of the workforce.

Recommended Reading: read all about key compliance features and more to look out for when purchasing a new HRMS

3. Onboarding

Software-driven onboarding of new hires leaves an electronic trail, showing exactly what has been sent and received (and signed and returned) and when. This makes it a simple matter to prove HR compliance for documents such as I-9, W-4, and state withholding forms, OSHA rights & safety training, any confidentiality agreements, key staff policies and the employee handbook.

4. Healthcare

Healthcare-related compliance in the US takes in a number of pieces of federal legislation. In particular the Affordable Care Act (ACA) and Health Insurance Portability and Accountability Act (HIPAA), but also potentially the Genetic Information Nondiscrimination Act, the Mental Health Parity Provisions, the Newborns' and Mothers' Health Protection Act, and the Women's Health and Cancer Rights Act. Put simply, the simplest solution is to have HR software that takes care of the data collection and IRS reporting automatically, and is kept up to date with any changes to the law.

5. Paid time off (PTO) and FMLA

The Family and Medical Leave Act “…entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave.” [Taken from the Department of Labor website.]

If that sounds complicated, factor in that any unused paid time off can be used concurrently with the FMLA leave and there’s a certain comfort to leaving the recordkeeping in the cyber-hands of some trusted software that keeps count of the days and prompts managers to ask or answer the right questions at the right time.

With all of the above various types of HR compliance, the key benefits of an HRMSs ability to automate are twofold. First, you meet the various HR compliance demands and deadlines. And second, possibly even more important, you can prove you’ve done so – thus negating the risk of non-compliance and potential sanctions and penalties.