Human resource (HR) compliance is the process of defining and establishing policies and procedures that ensure your company is compliant with laws and regulations.  

Business owners must comply with certain policies and rules to keep their employees safe and satisfied and to keep their company out of legal trouble.  

Here is what business owners need to know about HR compliance:  

Common HR compliance challenges 

60% of business owners say they struggle to keep up with HR compliance and regulations. With state and federal laws constantly changing and evolving, it can be difficult to keep up with the changes and make sure your company is 100% compliant.  

Here are some of the most common compliance struggles for employers: 

Benefits compliance Benefits are an important part of attracting and retaining employees. There are many advantages to having a competitive benefits package, but the more benefits your company offers, the more difficult it becomes to keep up with compliance. It is important for employers to understand their responsibilities when they choose to offer certain benefits. For example, COBRA regulates the extension of benefits after employee termination and other qualifying events.  

Form I-9: Form I-9 is used to identify a new employee and their authorization to work in the United States. Many employers find Form I-9 difficult to comply with because it is very tedious and has costly penalties for paperwork violations. To help avoid Form I-9 violations, employers should prioritize the following:  

  • Properly make corrections: When employers discover mistakes on the form, they need to document their actions when making corrections. Employers must not conceal any of the changes they make to an employee’s Form I-9. The USCIS guidelines instructs employers to draw a line through the incorrect information and initial and date the correction with the current date. Employers must then attach a memorandum that states why corrections were made.  
  • Reverify employment authorization: An expiration date is provided in Section 1 of Form I-9, and employers must reverify the employee’s work authorization document before the expiration date. Many employers do not track the expiration dates of their employee’s employment authorization which is why many employers forget to reverify their employee’s work authorization.  
  • Supervise employees when they complete section 1: Many new hires are not familiar with Form I-9 and may encounter difficulties. It is beneficial to have HR professionals supervise new hires as they complete section 1 of the form. This allows new hires to ask questions, record information properly, and reduces errors.  

Non-Discriminatory Hiring: Discriminatory behavior in the workplace can lead to a bad business reputation, and costly fines. For smaller businesses, the penalties are around $50,000 and for bigger businesses, it can be up to $300,000. Many employers worry about unbiased discrimination during hiring and what they can do to stay compliant. Discrimination includes age, race, ethnicity, background, and education. When employers hire, it is important for them to hire based off the candidate’s skills and work experience and not focus on any discriminatory traits.  

How to manage HR compliance and avoid legal risks  

Employers should conduct an HR compliance audit, to make sure their HR policies and procedures align with company goals as well as state, federal and local laws and regulations. For example, the audit will have the employer look through employee handbooks, ADA compliance, FMLA compliance, employee training, federal and state employment posters, and more.  

Employers should also create HR compliance checklists. Checklists can help ensure that employers stay organized and help them catch any issues with compliance before it becomes a bigger problem.   

 Employers can also look into partnering with HR experts like PEOs or HR consulting companies to help ensure there are not policies, practices, or laws that have been overlooked.   

With laws and regulations constantly changing, it can be difficult for employers to stay compliant. Consider using some of these tips to help stay compliant with state and federal laws. If you have any questions regarding HR compliance, reach out to us at