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Human Resources

HR Risk Management: Establishing Company Compliance

Christine Batten, PHR
by Christine Batten, PHR on July 25, 2017

hr compliance is the key to successWhen it comes to HR risk management, establishing HR compliance is the key to success. However, it’s not achieved overnight. Many business owners struggle to find the time and resources to learn about all the legal and regulatory liability that comes with managing the company. Here’s an HR compliance checklist to help you understand what keeps you and your business protected from unwarranted claims or lawsuits.

  1. Legal Audit

You can’t know whether you’re compliant with laws and regulations until you know which specific laws apply to your business. Many aspects of being an employer are subject to legal compliance. Two of the major things to focus on are labor laws and workplace health and safety.

  • Labor Laws

Many employers find themselves caught up in labor law violations. Whether it’s classifying employees incorrectly, not paying the correct wages for overtime, or deducting from wages inappropriately, Department of Labor violations can cost you. The DOL performs audits to check up on companies and employees on occasion, but employees who file claims for labor law violations prompt many of their investigations.

  • Health and Safety

Businesses are subject to numerous environmental, health and safety laws. Employers have the responsibility to provide a safe workplace, and there’s more to it than providing your employees with protective equipment. The Occupational Safety and Health Administration expects you will consistently work to eliminate hazards by doing things like switching to safer chemicals or using a ventilation system to clean the air. OSHA also requires you to post safety and health posters in a highly visible area, provide safety training, and keep accurate records of work-related illnesses or injuries.

  1. HR Compliance Audit

In order to identify and find solutions to HR compliance issues, organizations should conduct an HR compliance audit. By revisiting policies and procedures often, you can see opportunities for improvement and adjust things as needed. It’s also good to review HR indicators, which are things like the number of unfilled positions or employee complaints. You could consider soliciting feedback from selected HR employees and other department managers to learn whether they understand, practice and accept the company’s policies and procedures.

When considering risk management in HR, focus on:

  • HR management practices
  • Employee relations
  • Open-door policies
  • Equality policies
  1. Internal Investigation

When an employee comes to you with a harassment, discrimination, safety or any other type of complaint, be sure to listen and investigate. Conducting workplace investigations is one of the most challenging HR duties, but also one of the most important. Here are some suggestions for dealing with workplace investigations:

  • Take the situation seriously
  • Write a report
  • Follow up with those involved
  • Conduct the investigation promptly, thoroughly, and fairly
  1. Litigation Preparedness

In the event an employee files a claim or suit against your business, you want to be prepared. Documentation is very important should you need to defend yourself. As we say in HR, “If it’s not written down, it didn’t happen.” It’s especially important to document workplace investigations of discrimination or harassment and employee corrective action situations, especially those that lead to terminations.

One way to cover your back is to make sure you have an employee handbook with clearly outlined company policies. One of the most important policies an employer can have is an anti-harassment/anti-discrimination policy that includes reporting procedures. It’s important employees sign off on these items during their orientation to document they have received, read and understand them. Make sure you follow the company rules and procedures in a consistent way and equally apply them to all employees.

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Christine Batten, PHR
Christine Batten, PHR

Christine has over 20 years of HR related experience with a background in labor and employment law.