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Navigating HR Compliance: Why a PEO is Your Best Ally

by FrankCrum on October 25, 2023

Navigating the world of HR compliance can be daunting. It’s essential to understand the ever-changing landscape to ensure your business is protected. Simply put, HR compliance relates to aligning your business and HR practices with all the various, applicable employment laws and regulations set forth by relevant government authorities. The umbrella these laws and regulations cover can range from wages and benefits to immigration and anti-discrimination. We’ll look at common HR compliance issues that businesses may experience and how PEO services can be your best ally for staying compliant.

What Are Some Typical HR Compliance Laws and Regulations?

The list of HR laws is extensive. Although HR professionals should understand all relevant HR laws and regulations that affect their employer, here are some labor laws that appear prominently and carry significant weight when violated:

With the above laws in mind, we can explore common HR compliance issues and scenarios businesses need to watch out for. As a leader and advocate for your business’s health, be mindful of how the below HR compliance issues could appear in your business, and if it has the systems in place to correct or prevent them.

1. Wage and Hour

A prominent law to keep an eye on is the Fair Labor Standards Act (FLSA). This law is responsible for establishing minimum wage and overtime pay guidelines at the federal government level. Although there are many areas this law addresses such as recordkeeping and youth employment regulations, wage and overtime are the sections most commonly violated.

Misclassification of workers is a notable HR compliance issue related to the FLSA. This deals with classifying a worker as “exempt” or “non-exempt”, often in relation to overtime pay. If an employee is misclassified, this can lead to heavy penalties and fines. Be sure you are correctly classifying employees and know what to look out for to avoid HR compliance issues.

2. Safety in the Workplace

The Occupational Safety and Health Act (OSHA) is in place to ensure employers provide a safe workplace environment and take steps to limit the risk of harm or death to their employees.

Compliance issues can appear when employees are not adequately trained according to OSHA standards and training requirements. Additionally, you should be diligent about tracking and submitting employee illness and injury data, which affects Worker’s Compensation rates. It’s best to be proactive and take time each year to review your safety and training processes.

3. Discrimination

Laws such as the Age Discrimination in Employment Act (ADEA), Americans with Disabilities Act (ADA), and Title VII of the Civil Rights Act work together to counter discrimination in the workplace and in hiring practices. Failing to adhere will yield substantial penalties, typically enforced by the U.S. Equal Employment Opportunity Commission (EEOC).

To remain compliant with these laws, it’s important to vet job listings and interview questions to ensure they do not contain verbiage that could violate any of the above acts. It’s also important to train those who may be involved in the hiring process to avoid topics or questions that may cause violations.

4. Employee Benefits

The Employee Benefits Security Administration (EBSA) oversees the security and enforcement of benefit-related laws. The Affordable Care Act (ACA) and Employee Retirement Income Security Act (ERISA) are some that fall under the EBSA purview.

To avoid substantial penalties for non-compliance, be sure to comply with all relevant deadlines and filings related to employee benefits and retirement. Also, ensure employees are properly classified so those who are eligible for benefits have the opportunity to opt in.

5. Immigration Law

The Immigration Reform and Control Act of 1986 (IRCA) is in place to keep employers from hiring candidates who are not eligible to work in the United States.

To remain compliant, you must determine who is eligible to work and who is not during the hiring process, while avoiding anything that may be considered discrimination and result in penalties. Having a standardized process for I-9 documentation and tracking is necessary to ensure HR compliance with immigration laws.

6. The Family and Medical Leave Act

The Family Medical Leave Act (FMLA) requires covered employers to provide up to 12 workweeks of leave during an applicable leave year for qualifying reasons (up to 26 workweeks of leave during an applicable leave year for an eligible employee to care for a military service member with a serious injury or illness). This is a job-protected leave to assist employees in balancing work and family responsibilities.

Outside of understanding who and what life events qualify, it’s crucial for companies to know any state laws related to family and medical leave and stay up to date with changes.

HR Compliance Best Practices and Tips

It may seem like too much to keep up with; however, there are ways for leaders to help their businesses mitigate HR compliance issues effectively.

  • Above all, staying organized can save a lot of headaches over time, especially with documentation.
  • Be consistent and proactive reviewing systems and processes to identify any gaps or pain points.
  • Develop and stick to an efficient process you and your team follow to stay up to date with the latest laws and legislation that apply to your business.
  • Streamline and automate what you can through tools and services, such as utilizing a PEO like FrankCrum.
  • Properly train employees and leaders to ensure everyone is doing their part to keep the company compliant.

How a PEO Helps with HR Compliance

HR compliance issues can put a major strain on companies, especially small to medium-sized businesses that lack deep or dedicated HR resources within their organizations. That’s where a PEO like FrankCrum comes in.

Your workforce is the greatest resource and greatest risk of your business. FrankCrum provides specialized HR guidance on employment practices and procedures and helps you stay up to date on changing regulations. Experienced and credentialed HR professionals are just a phone call or email away. They can help you build a strong foundation for HR compliance by assisting with employee handbooks, hiring practices, corrective action, termination, documentation, performance management, discrimination, wage and hour issues, federal acts, and more.

PEOs truly add a reliable partner to your business’s corner when you need them. In addition to tracking HR compliance laws and assisting with HR compliance issues if they do appear, PEOs such as FrankCrum help reduce the amount of time spent on admin tasks so your business can focus on growth.

Contact us today to learn how our team can support your business and navigate HR compliance laws and HR compliance issues.


FrankCrum is a professional employer organization (PEO), founded in 1981 dedicated to helping business owners boost HR capabilities and broaden convenient services and benefits to employees. The origin of FrankCrum dates back to 1981, when Frank W. Crum, Jr. and his father, Frank Crum, Sr., founded the Great American Temporary Service. With a passion for helping small business owners succeed, the company has evolved and grown over several decades.