Highlights
- Covering everything from hiring to data privacy, HR compliance protects your business from costly penalties and legal issues.
- This HR compliance checklist is designed to help you organize your HR practices and ensure you’re meeting legal requirements.
- Resource Management, Inc. offers expert guidance to help small businesses thrive by handling complex HR tasks and ensuring compliance. Learn more about our services.
Staying on top of HR compliance is essential for small businesses, but it can be a real challenge. With so many moving parts, from maintaining accurate employee records to keeping pace with ever-changing federal, state, and local employment regulations, it’s easy for things to fall through the cracks.
To avoid costly non-compliance issues, here’s an HR compliance checklist with the essential tasks and best practices to ensure your business stays on the right side of the law.
Your Small Business HR Compliance Checklist
Let’s break down the key areas of HR compliance and identify the most relevant tasks for each of them:
- Recruitment and hiring
- Employee management
- Payroll and benefits
- Workplace safety
- Data privacy
Recruitment and Hiring
Equal Employment Opportunity (EEO) compliance
Job postings and advertisements. Ensure they are inclusive and do not contain discriminatory language or preferences. Avoid using language that could discourage certain groups from applying.
Job interviews. Provide hiring managers and interviewers with training on EEO laws and best practices for conducting non-discriminatory interviews. As a way to reduce bias, opt for structured, standardized questions for all candidates applying for the same position.
Employee classification
Classify. Analyze each position and the specific tasks performed by employees to determine whether a role meets the criteria for exempt status under the Fair Labor Standards Act (FLSA) .
Document. For each employee, clearly record the rationale behind their exempt or non-exempt status. This can be crucial in case of an audit or legal request.
Review. Make sure to review classifications regularly to ensure they remain accurate.
Background checks and pre-employment screenings
Background check policy. Stay compliant with the Fair Credit Reporting Act (FCRA) and any state laws.
Authorization form. Obtain written consent from applicants before conducting any background checks.
I-9 verification and work authorization
Form I-9. As part of your new hire onboarding process, make sure all of your new employees complete form I-9, regardless of citizenship status. Verify employees’ identity and employment authorization documents.
Store and audit regularly. Store I-9 forms securely and separately from other employee personnel files. Perform regular audits to identify and correct any errors.
Employment Management
Wage and hour regulations
FLSA compliance. Ensure compliance with wage and hour regulations, including minimum wage, overtime, breaks, and meal periods.
Track work hours. Implement a reliable timekeeping system (manual or electronic) and train employees in how to use it properly.
Employee leave
Leave policy. Include information on eligibility requirements, types of leave available (sick, vacation, the Family and Medical Leave Act, jury duty, military leave, etc.), and the process for requesting leave in your employee handbook.
Track employee leave. Implement a consistent system to track employee leave requests and approvals.
Performance management and documentation
Conduct regular performance reviews. Provide regular feedback to employees on their performance, and document any issues, including verbal warnings, written warnings, and performance improvement plans. Performance documentation can help you support personnel decisions, such as promotions, demotions, and terminations.
Employee discipline and termination
Disciplinary policy. Develop a written disciplinary policy that outlines the steps involved in disciplinary actions, and ensure it’s applied consistently.
Record-keeping. Maintain records of all disciplinary actions, including the reasons for termination.
Anti-discrimination and harassment
Anti-discrimination and harassment policies. Implement comprehensive policies prohibiting discrimination and harassment, including sexual harassment, hostile work environment, and retaliation. Implement clear reporting procedures for employees who experience or witness discrimination or harassment and investigate all the complaints thoroughly.
Training. Provide regular training to all employees on anti-discrimination and harassment policies and procedures.
Payroll and Benefits
Payroll processing and tax withholding
Calculate and process payroll accurately, withholding appropriate taxes (federal, state, and local), and filing required payroll tax returns. Use reliable payroll software and train employees on how to use it.
Benefits administration
Manage employee benefits programs, such as health insurance, retirement plans (401(k), etc.), and other fringe benefits. Communicate benefits to your employees, assist with enrollment, and keep accurate records of benefits elections.
COBRA
Comply with the Consolidated Omnibus Budget Reconciliation Act (COBRA) regulations, which require employers to offer continued health insurance coverage to eligible employees and their dependents after certain qualifying events, such as termination of employment.
Workplace safety
OSHA compliance and workplace safety standards
Adhere to OSHA standards to prevent workplace accidents and injuries. This involves providing regular safety training for all employees, keeping equipment in order and safe, and conducting regular safety inspections.
Workers’ Compensation Insurance
Obtain and maintain workers’ compensation insurance to provide benefits to employees who are injured on the job. Ensure timely reporting of workplace injuries and manage workers’ compensation claims effectively.
Data Privacy
Protect employee personal information. Implement safety measures to keep your employee personal information safe. This can include access controls, encryption, and regular security audits.
Comply with data privacy regulations. Understand and comply with federal and state data privacy laws, such the California Consumer Privacy Act (CCPA) and even GDPR (if applicable).
Keep Your Small Business Compliant with Resource Management, Inc.
While this HR compliance checklist offers a good starting point, staying up to date with regulatory requirements requires ongoing effort and can present significant challenges.
At Resource Management, Inc., we provide expert guidance and tailored HR solutions, helping small businesses thrive. As part of our PEO partnership, we help businesses navigate compliance issues and handle the difficult aspects of being an employer, from unemployment claims to disciplinary actions, so you can focus on growing your business.
Need help with HR compliance? Contact us today for a free consultation.