Dec 21, 20233 min read

Is Your Company HR Compliant for the New Year?

The ending of each year signifies a time to remove all bad habits in our personal lives, and we're provided with a fresh opportunity in the new year to do things the right way. The same should apply to your company's HR practices! In this blog post, we'll address some common HR compliance mistakes that companies make.

What does HR Compliance Mean?

Being HR compliant means that you've successfully aligned your workplace practices with your local, state, and federal laws, in addition to laws that are specific to your industry.

While it may sound simple enough, many companies struggle to become or remain compliant due to lack of HR law knowledge, or they may not have the time to keep up with it themselves. More often than not, this will result in expensive mistakes that are a huge pain to correct later.

Common HR Compliance Mistakes

Let's take a look at some common HR compliance mistakes made by companies that opt out of hiring an HR professional.

Discrimination During the Hiring Process

We know that we cannot disqualify an applicant due to race or gender according to laws enforced by the Equal Employment Opportunity Commission (EEOC), but there are other ways to discriminate during the hiring process that may not be so obvious.

For example, did you know that you should refrain from asking questions like "are you married?" or "where are you originally from?" These are common questions that we'd typically ask a person that we're meeting for the first time; however, they can actually be viewed as discrimination because you are seeking information from a protected class (sexual orientation, nationality).

Job Listings

Another form of discrimination during the hiring process can also take place in job ads.

For instance, "We are seeking a hard worker for our lumber yard. He will need to have prior experience." Specifying that the applicant must be a male can most definitely be viewed as discrimination against women.

If your company is found guilty of discrimination by the EEOC, it could very well file a lawsuit against your company. As if that's not bad enough, individual lawsuits can be filed against your company as well.

Employee Misclassifications

Employees are generally classified as either exempt (paid a fixed salary regardless of how many hours are worked) or non-exempt (paid an hourly rate for hours actually worked, plus overtime for hours worked above forty in a workweek).

The FLSA has strict requirements in place when it comes to classifying an employee as exempt and can cost you a pretty penny if found that you've classified incorrectly. Penalties could include compensating employees for all unpaid overtime, paying "liquidated damages," and being subject to fines of up to $10,000 per each misclassified employee!

Incomplete Onboarding Paperwork

Every new employee is required to fill out the I-9 form, which verifies that they are legally eligible to work within the U.S. and must provide documentation to support this. This documentation could be a driver's license, Social Security card, passport, employment authorization card, or other documentation that can be used to verify identity.

Employers should not take this step lightly as part of their onboarding process. Failure to complete this step correctly can result in prison time, thousands of dollars in fines, and largely publicized fraud cases!

Let's Reflect

Now that you're a bit more knowledgeable about HR compliance mistakes, we'd like for you to ask yourself if you're company is ready to go into 2024 without any bad HR habits.

Still not sure? Well, don't beat yourself up! As a matter of fact, most new companies, and even some with longevity, struggle with maintaining HR laws and regulations by themselves. Does this mean you should settle with bad HR practices and the fines that are sure to come?

No way!