Understanding the Types of HR Compliance

What falls under HR compliance?

HR compliance includes labor and employment-related laws, regulations, and requirements. There are multiple types of HR compliance that can be at the federal, state, and local levels, and your company’s responsibilities may vary based on size, industry, and location.

HR compliance requirements apply at every stage of the employee lifecycle, from interviewing and hiring all the way through to actions taken when an employee is leaving the workplace. To ensure you’re compliant with all applicable laws and regulations, you must thoroughly understand which requirements apply to your business, set policies and procedures based on laws and regulations, train employees on those policies and procedures, and enforce and audit policies to ensure they meet current and new standards.

Because companies fall under federal, state, and local jurisdictions, there can be discrepancies between them. In these cases, employers should typically follow the requirements that are most favorable to the employee. For example, while the federal minimum wage is $7.25 an hour, employees in some states are entitled to their state’s higher minimum wage – such as $14 per hour in Illinois and $12 per hour in Virginia.

What are the types of HR compliance?

Understanding the types of HR compliance is essential for businesses to meet legal and ethical standards. These compliance requirements range from federal and state laws to industry-specific regulations and internal policies. HR compliance covers areas like minimum wage laws, workplace safety, employee data protection, and required training.

In this section, we’ll explore examples of HR compliance, including statutory, regulatory, and contractual obligations, as well as newer considerations like HR technology and international labor laws.

1. Statutory Compliance

Statutory compliance laws are established by federal, state, and local legislation. Statutory compliance includes minimum wage, minimum working age, employment taxes, and equal opportunity employment laws.

2. Regulatory Compliance

Regulatory compliance rules are put in place by official regulatory bodies. For example, the federal Occupational Safety and Health Administration (OSHA) is a part of the U.S. Department of Labor and operates under the Occupational Safety and Health Act of 1970. Employers must comply with OSHA standards, which include a wide range of topics such as bloodborne pathogens, ergonomics, motor vehicle safety, and wood dust.

3. Contractual Compliance

Contractual compliance regulations are based on company-specific guidelines that comply with statutory and regulatory requirements. A company, for example, might require that employees sign a noncompete clause, which stops an employee from working for a competitor or starting a business in the same industry for a defined period after leaving the company.

4. Union Law Compliance

Employers are required to adhere to the National Labor Relations Act, which protects employees’ rights to organize and collectively bargain. For example, employers must avoid unfair labor practices, such as not threatening job loss or other punitive consequences for union activities. 

5. HR Technology Compliance

Businesses need to ensure that the technology tools and systems used in HR comply with applicable regulations and standards. This includes compliance with HIPAA (Health Insurance Portability and Accountability Act) when handling protected health information and submitting workplace demographic reports to the Equal Employment Opportunity Commission. The California Consumer Privacy Act grants privacy rights to job applicants, employees, and contractors, which requires that businesses understand its personal data collection process – where it’s collected, how it’s used, and who has access.

6. Internal Compliance

Internal HR compliance is the company’s adherence to its own policies, procedures, and ethical standards. Internal compliance ensures that a company is aligned with its stated values plus all legal requirements. Internal compliance covers a wide range of issues including access to benefits, protection of employee data, performance reviews, and employee eligibility of work.

7. Training Compliance

An important role of HR is ensuring that employees understand and comply with the laws, regulations, and policies of the workplace. This can vary depending on location and industry. For example, some states (including Connecticut and Maine) and cities (including Chicago and New York City) require sexual harassment training for all employers and employees. Healthcare employees may be required to take training for topics including HIPAA compliance, OSHA protocols, infection control, and life support, while workers in the construction industry may need to comply with training for fall protection, scaffold safety, personal protective equipment, CPR, and more.

8. International Labor Law Compliance

There are several scenarios to consider when understanding international labor laws. For example, if your company is part of global supply chains, you’ll need to be familiar with standards set by the International Labour Organization. If you operate outside of the United States, you must comply with local financial regulations, paying special attention to taxes.

9. Country-specific HR Compliance

Regulations and standards vary from country to country, and your compliance depends on if you employ workers in another country. For example, France enforces a 35-hour workweek limit, the United Kingdom sets minimum wages based on age, and migrants in Mexico are protected under specific labor laws. The European Union also has data protection laws that apply to employee data and privacy rights.

10. Workplace Compliance

Businesses maintain internal policies that can be driven by company leadership decisions and statutory or regulatory requirements. These can include leave entitlements for medical and family reasons, dress code requirements, mandatory breaks in the workday, and policies related to work in the office versus remote work opportunities.

How do the types of HR compliance vary by industry?

Though some HR compliance laws and regulations apply to all employers, there are types of compliance in HR that vary depending on the industry and scope of work.

Some industries require extensive training requirements because of their complexity or health and safety concerns. Here are a few examples:

• Information Technology: Employees need frequent skill and certification updates to stay informed of cybersecurity threats and technological advancements.
• Healthcare: This broad industry requires different training for different sectors. For example, some employees might need training on standards set by the Centers for Medicare and Medicaid Services for billing practices, patient rights, and quality of care standards. Others might need emergency preparedness training in the event of natural disasters or pandemics.
• Aerospace and Defense: This complex industry demands training on safety, technical skills and regulatory compliance, covering issues such as anti-corruption, security clearance, cybersecurity, and documentation.

When a company engages with government agencies or completes government contract work, there are often additional requirements to fulfill. These can include:

• Equal Opportunity Employment: Companies must prove that they have non-discriminatory hiring and employment practices in place.
• Small Business Certifications: There may be a requirement to obtain and maintain certifications for women-owned, veteran-owned, or minority-owned businesses.
• Record-keeping and Reporting: Government contracts might require records related to accounting and payroll to be retained for at least three years after final payment. In addition, documents may need to adhere to specific government standards.

In addition, some industries fall under regulatory HR requirements. These vary according to the scope of the industry and its associated risks and regulations. These include, but are not limited to:

• Construction: The construction industry falls under compliance with OSHA regulations to keep employees safe. OSHA covers fall protection, scaffolding safety, communication about hazardous materials, personal protective equipment, electrical hazards, confined spaces, cranes and derricks, and more. In addition, the Registered Apprenticeship program for construction, run by the U.S. Department of Labor, offers a structured training system focused on classroom instruction, on-the-job training, wage increases, certification, and training.
• Manufacturing: There are multiple regulations in place to ensure that manufacturing employees and their workplaces are safe. These include compliance with OSHA regulations, Clean Air Act, and Clean Water Act. In addition, manufacturing employees need to be aware of possible exposure to hazardous chemicals.
• Finance and Banking: There are multiple regulations related to maintaining legal and ethical standards in the finance and banking industry, including anti-money laundering laws, General Data Protection Regulation, the Equal Credit Opportunity Act, the Fair Housing Act, the Dodd-Frank Act, and the Sarbanes-Oxley Act.