As an HR leader, you bear a tremendous burden when it comes to ensuring corporate compliance. Given the ramifications for getting it wrong, HR compliance is a top concern for most businesses. The ADP Research Institute® (ADP RI) report, Midsized Businesses: Poised to Lose Balance in a Time of Uncertainty, confirmed that compliance remains a major concern for midsized business owners. And among the top concerns are complexity of government regulations and the ability to comply with employee data laws.
In addition, 40 percent of midsized business owners report experiencing unintended expenses because of noncompliance with government regulations. Looking closer at larger midsized companies, the increase is even more pronounced. The number of companies with 151-999 employees that were hit with these costs jumped from 40% in 2015 to 51% in 2016.
The ADP RI report goes on to say that, "Business owners also indicate their confidence regarding compliance is sliding – and has been for some time. On every marker, from visibility into labor costs to workforce regulations to overspending on overtime, the percentage of respondents indicating confidence in these areas has dropped steadily."
Changes in Government Complicate the Compliance Landscape
When political power changes hands, compliance becomes even more challenging. A new slate of laws and regulations comes with each newly elected administration. There are also changes in the interpretation and enforcement of existing laws. Given the recent changes in the heads of government in the United States, France and Britain, organizations with an international presence in particular will undoubtedly feel the effects of an increasingly volatile compliance environment for years to come.
Increase Your Confidence with Compliance-Related Intelligence
Given the increasingly onerous compliance environment, has your organization done enough to withstand regulatory scrutiny? Effective compliance goes hand-in-hand with confidence. When HR leaders maintain a firm grasp on the ever-changing legal and regulatory landscape, they can evolve their program to deliver compliance. Here are five ways that your HR team can remain up-to-date in dynamic and uncertain times.
1. Pay Attention to What Regulators Do and Say.
Government regulators often publish press releases detailing their enforcement activity. Pay close attention to what regulators say, and where they focused their investigative resources, as it can provide a window into what matters to them. You can also keep your finger on the pulse by subscribing to updates from the U.S. Department of Labor, the Department of Justice and the Immigration and Customs Enforcement, among others.
2. Audit Your Ability to Comply.
Identify the laws and regulations that govern your organization's activities and conduct an assessment of your ability to comply. If the assessment uncovers areas of noncompliance, assign an executive to make sure that the organization bridges those gaps quickly. If the remediation effort requires an investment, make sure that the executives in charge of prioritizing and allocating the funds understand the penalties and fines associated with noncompliance.
3. Keep an Ear to the Ground.
Before a law or regulation changes there's often extensive analysis and discussion on government websites and trade journals. Assign an employee to monitor each law and regulation that affects your organization for revisions and amendments. Keeping track of this chatter can help your firm anticipate changes and ensure that the operational decisions made today don't make it more difficult for your organization to comply in the future.
4. Network with Peers.
There are number of professional associations that cater to HR leaders. The Society for Human Resource Management, the Human Capital Institute and the International Association for Human Resource Management provide HR leaders with access to vast volumes of compliance-related information. In addition, each organization holds conferences for HR professionals to network with peers and hear from industry leaders. If your employees attend a conference, make sure they take detailed notes — especially when government regulators deliver speeches.
5. Invite an Employment Attorney to Your Team
Engage a suitably qualified law firm to provide external perspective on the laws and regulations that impact your organization. Invest the time to educate the attorney on your organization's operations, culture and approach to compliance. By doing so, you'll make it easier for them to provide relevant guidance.
Your organization looks to you to maintain compliance. The steps noted above can help improve the effectiveness of your existing compliance efforts, and position your department to respond to whatever comes next.
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