HR compliance is creating policies and procedures that ensure your organization follows up-to-date labor and employment laws and regulations. Not only does HR work to align workplace policies with local and federal laws, but they also enforce procedures to ensure all employees follow them. HR compliance is vital to your business because all employers must meet their legal responsibilities. Non-compliance will result in fines, penalties or even legal action, which can be detrimental to your business. In other words, HR compliance is important to avoid fines and legal problems, maintain a company reputation, and build a great workplace. HR managers must prioritize HR compliance to protect their organization. There are many different types of compliance within HR, such as:
- Statutory compliance is about implementing and complying with government employment and workplace legislation. For example, your business is legally required to follow minimum wage laws, age requirements, and anti-discrimination laws, to name a few.
- Regulatory compliance overlaps with legal compliance periodically, but the distinction is that your business must follow the rules of a specific regulatory body. These regulatory agencies fall into three classifications: independent regulatory commissions such as the Federal Trade Commission (FTC), executive agencies such as the United States Environmental Protection Agency (EPA), and government corporations, the Centers for Disease Control and Prevention (CDC) be one of them.
- Contractual compliance is what it should be: compliance with the regulations and terms your organization is bound by. This can be a contract between your company, partner organizations, or employees.
- Complying with union law, some companies may deal with union workers, such as The Screen Actors Guild, which represents over 100,000 artists and technicians. In this case, your company must be aware of the rules set by these unions and respect them.
Every company in India spends a lot of money, effort and time to ensure their payroll is compliant through the proper audit. Companies are often concerned with compliance-related legal issues such as aggressive employees, demands for unreasonable wages, and demands from unions. Even if a business has no intention of breaking the law, it may face legal problems if it lacks adequate protection. This protection comes from legal compliance, which helps companies avoid the risk of non-compliance. With the increase in non-compliance risks, it becomes necessary for companies in India to comply with the law in human resources in India.