Three HRMS features you need for compliance
If you’re a legitimate organization (and if you’re not, why both reading any further?) then compliance with the law should be a foundational principle of your business. In your role as an employer, that means staying on the right side of various and complex labor legislation that is constantly in a state of flux with the ‘rules’ potentially changing with each new administration. Put like that, it sounds less than easy… an that’s where your HRMS comes in. When looking at new HR technology, compliance is a priority and the following three features can save you multiple headaches.
Payroll is something all employees expect you to get right, and that expectation extends to your responsibilities for making legislated deductions, such as for taxes, and submitting mandated reports such as overtime returns and individual W-2s. The situation is more complicated if your organization operates in more than one country or legislative territory. In that case, multiple sets of legislation may apply, even within the same team (in these times of virtual and scattered teamworking). An HRMS helps with accuracy, and if you’re going to comply, then complying accurately seems like an obvious goal. After all, any mistakes on your part as an employer potentially impact on the employee in terms of taxes, social security contributions, welfare benefits, and pensions.
Most countries’ labor laws contain anti-discriminatory measures and for employers, these begin at the hiring stage of the employee life cycle. Usually, specifications, invitations to interview, offer letters and other publicised information and communications to candidates must be carefully worded to avoid discrimination on a number of stated grounds (in the US, these are race, ethnicity, religion, marital or family status, physical or mental disability, gender, age, and possibly sexual orientation).
Check out our full HRMS recruitment compliance checklist to compare against your requirements
Up to date HRMS features can be configured to use standard communications templates that have been approved as non-discriminatory; and also allow you to automatically gather the data necessary to comply with mandatory reporting requirements.
Once you have your ‘compliant’ status the important thing is to keep it, but that can be a challenge in a world of constantly shifting laws and rules. Some cloud HRMS packages are automatically updated to keep pace with changes to the current labor laws, notifying users as and when compliance requirements change. For example, this auto-update facility can keep you abreast of changes to tax and social security rates, ensuring that as an employer, you are always withholding the correct amount from individual paychecks. This can help you avoid unexpected extra tax bills as a result of underpayment.
The most obvious practical benefit of HRMS compliance is not that you are compliant with the law as an employer, but that you are not at risk of being sanctioned, fined or otherwise punished for being out of step with the law. That’s one business overhead that investment in a good HRMS can reduce or eliminate entirely.
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