The importance of HR compliance

Tom Neil, writer at Acas, explains the necessity of HR compliance, and why it makes sense to go above and beyond your legal obligations

As organisations strive to become ever more efficient and productive, the importance of having skilled and knowledgeable HR has become increasingly clear. For an organisation to achieve long term success, it needs to engage its staff and be able to resolve any issues that arise quickly before it has a negative effect on the organisation. HR compliance is a vital part of this.

What does HR compliance mean?

All organisations must comply with the employment law, rules and regulations where they are based. To achieve this HR needs to take a proactive approach to ensure that the organisation meets all of its legal obligations. Day to day this means being responsible for meeting health and safety requirements and ensuring that staff receive their contractual and statutory workplace entitlements. This can include following fair recruitment policies, preventing and tackling workplace discrimination and ensuring staff are paid what they are owed. Additionally, HR compliance requires staying on top of any employment law changes; gender pay reporting and rules for employing foreign workers, for example, will affect many organisations in 2017. Deciding how their organisation will meet these new compliance responsibilities is an ongoing task for HR.

Why is HR compliance important?

HR compliance is important because failing to meet your legal obligations will either be unlawful or illegal and can lead to industrial disputes or tribunal claims. In some circumstances, such as allowing an employee to work during the first week after they have given birth, such failures can also become a criminal law matter.

It can of course be difficult for an organisation to ensure that all their legal obligations are continually being met. While organisations may feel confident about complying with some of their legal responsibilities, such as paying the national minimum wage, they often feel less confident about complying with others, for example ensuring they follow a fair recruitment policy that does not discriminate against someone according to equality laws. To ensure compliance, it is essential that HR are appropriately resourced to fully understand the organisation’s obligations and are able to identify areas where further action and/or training is required.

Who is responsible for ensuring HR compliance?

While it is the role of HR to advise, strategise and implement policies and procedures to meet compliance requirements, who is actually responsible for ensuring HR compliance will vary depending on the structure of the business and the specific legislation involved. Typically the responsibility will ultimately lie with the owner, chief executive or HR Director. If legal action is taken it will usually be these individuals who are held responsible if their organisation is found to have failed to meet its legal obligations.

However, HR compliance should involve everyone in the organisation, e.g. fire safety training. HR should implement policies and procedures that are followed to ensure all obligations are met. Managers should be trained and equipped to know what policies and procedures are relevant to any situation and follow the correct process whenever required. Staff should be well informed about their expected responsibilities, behaviour and where they should go for support or to raise concerns.

Going further than compliance

While compliance is an essential requirement for all organisations, many can benefit by going even further than their legal duties. Offering better terms such as more annual leave and offering office perks can show that the organisation cares about the wellbeing of its staff and helps it to attract and retain the best talent.

There can also be business benefits. An organisation that offers a flexible working system that allows part time working is good for employees, but can also suit the needs of the organisation by making it easier for them to deploy higher levels of resources at times of peak demand.

In the UK there is currently a lot of focus on the new gender pay regulations, with most focus being on what is required to comply with these new responsibilities. For many HR departments this will require liaising with payroll to calculate what their gender pay gap is, publishing the figures on the organisation’s website and submitting evidence of compliance annually to the government. This will meet their compliance requirements, however an organisation should be willing to go further than their compliance requirements. Where a gender pay gap exists, HR should look to understand why this is and consider what actions may fairly reduce this. Again, being seen to be an organisation that has gone beyond simply complying with their obligations and actively taken steps to reduce their gender pay gap can be an excellent marketing tool to attract people to the organisation.

Tom Neil

Writer

Acas

@acasorguk

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