Compliance: Navigating Employment Laws and Regulations

Among the many roles and responsibilities that human resources departments are tasked with is compliance. 

Compliance ensures businesses are following company regulations, as well as federal and state employment laws for safe and equal work environments.

Compliance involves many steps, such as:

• Auditing current compliance levels
• Updating compliance documents
• Enforcing compliance regulations

As a business owner, you should be mindful of the employment laws your company needs to follow. Today, we explore some common compliance regulations to be aware of.

Confidentiality and Digital Security

With a rise in identity theft and online fraud, digital security has become more important than ever. 

Human resource professionals must be aware of compliance and state employment laws related to the collection of personal information.

Talent acquisition requires a lot of personal details to be documented and filed. These details must be made safe through:

• Proper storage
• Password protection
• Employee authorization system

Digital security plays a big part in the safekeeping of these documents and their contents. Some forms may even require encryption.

Inclusive Job Listings and Hiring Questions

Talent acquisition requires attention to detail, especially in your job listing and hiring process. 

There are many discrimination acts in the United States banning businesses from using any discriminatory language or practices, even in job advertisements or new hire questions.

Language must reflect acceptance and encouragement for all to apply, regardless of gender, age, ability, sexual preference, ethnicity, medical history, national origin, or religion. The U.S. Equal Employment Opportunity Commission also bans discrimination based on pregnancy or parenthood.

Avoid Classification Fraud

The staff at a business may have two different classifications: employee and independent contractor. 

An employee is someone hired by your company for a permanent full-time, part-time, or casual role. A contractor isn’t employed by your company. They receive no benefits, and usually less pay. Contractors sign a contract to work for your company but are either self-employed freelancers or employed by a third-party company.

Classification fraud is a big deal among compliance regulations. It’s illegal to fraudulently label an employee as a contractor to avoid paying more or offering benefits packages. Employees and contractors must be appropriately labeled and reported to the government during tax season. The penalties are steep; a company may be liable not only for their portion of the taxes but the contractor’s as well plus fines.

Adhere to the Illinois Equal Pay Act

Illinois has passed House Bill (HB) 3129, amending the Illinois Equal Pay Act of 2003 to mandate pay transparency. 

Effective January 1, 2025, employers with 15 or more employees must disclose pay scale and benefits in job postings. This includes wages, salaries, bonuses, stock options, and other incentives. 

Employers also need to communicate promotion opportunities to current employees within 14 days of external job postings. Third-party job advertisers must also include this information. Non-compliance with these requirements could result in civil penalties, and the Illinois Department of Labor can initiate investigations on its own or based on individual complaints​

Wrapping Up

These are just some of the more common compliance and employment laws HR leaders will encounter. Many other regulations must be met to avoid legal action.

Hopefully, these tips have been useful as you navigate the evolving role of human resources.

 About Focus HR, Inc.

Focus HR, Inc. uncomplicates the people side of business by providing small business owners with outsourced HR, project HR, and Leadership Coaching. For more information, please contact us today! If you liked this post, please subscribe to our blog. 

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