Your Ultimate HR Compliance Checklist for 2024

HR non-compliance can sneak up if you don’t remain up-to-date with regulations. Yet, most organizations remain under prepared – one survey indicated that only 22% of HR professionals rank their organization at the top of the compliance maturity model.

Written by Andrea Towe
Reviewed by Catherine Scott
7 minutes read

Something as simple as an HR checklist can help keep you on track when it comes to all the moving parts you, the HR professional, need to manage on a day-to-day and annual basis.

HR compliance is at the forefront of all HR initiatives and is critical in helping minimize legal risks to an organization. The risk of non-compliance can be detrimental. Since 2000, U.S. corporations have paid out a staggering $3 billion in employment-related and civil-rights lawsuits over allegations that their employer did not comply with applicable laws.

Let’s take a closer look at what human resources compliance is, why it’s important, what common HR compliance issues are, and what tools and strategies are needed to help stay on top of it.

What is compliance in HR?
Why is HR compliance so essential?
Your HR compliance checklist: 9 essential items
Developing an agile HR compliance strategy

What is compliance in HR?

HR compliance refers to a company’s policies, processes, and procedures that help ensure that work and employment practices adhere to applicable laws and regulations. This includes employment areas such as recruitment and hiring practices, compensation and benefits, workplace safety, employee classification, records retention, non-discrimination and anti-harassment policies, and labor relations. 

Compliance minimizes the risk of employment-related grievances, legal penalties, fines, and lawsuits. HR compliance encompasses everything from creating and documenting policies and procedures to administrating and enforcing those policies.

Why is HR compliance so essential?

Human resources compliance is important for many reasons, including:

  • Minimizes the risk of employment-related grievances, costly legal penalties, fines, and lawsuits
  • Helps reduce any damage to a company’s reputation. A damaged reputation can cause a company to lose business, potential customers, and can take a long time to repair and regain trust
  • Helps ensure an environment free of harassment and discrimination
  • Supports recruiting efforts and employee retention
  • Worker safety can be jeopardized if a company is not in compliance with safety-related laws
  • Not only does HR compliance emphasize adherence to laws, but also helps develop fair and ethical behaviors and employment actions

Your HR compliance checklist: 9 essential items

Compliance in HR includes so many components, which is why a checklist is an excellent tool to help be proactive and complete the necessary actions in a timely manner – all of which can ultimately help ensure HR compliance. 

While the format and specific items on an HR compliance checklist can vary depending on a company’s location, size, and industry, the following are some common and critical checklist items, along with a brief description for each category:

1. Recruitment, interviewing, and hiring

  • Ensure fair and consistent hiring practices: Standardize recruiting and interviewing procedures to ensure fair and inclusive hiring practices are followed. This includes prohibiting inappropriate interview questions, such as personal questions unrelated to the business or job at hand, avoiding preferential or discriminatory language in job postings, etc. 
  • Background check and reference check compliance: Ensure consistency in administering and applying background checks. Develop an approval and documentation process for any exceptions.
  • Form I-9 and work authorization compliance: Adherence to federal Form I-9 and work authorization requirements is critical. U.S. Immigration and Customs Enforcement (ICE) can conduct periodic Form I-9 audits for completion, accuracy, and timeliness of Form I-9s.
  • Records retention: Develop and adhere to documentation and records retention requirements on all recruitment and hiring initiatives, including Form I-9 retention.

2. Onboarding procedures and company policies

  • New hire orientation: HR should provide thorough new employee onboarding that includes explaining all company policies. This could also include training on anti-discrimination and harassment, safety, employee rights and responsibilities, and any other applicable compliance policies or procedures. 
  • Records retention: Maintain training and acknowledgment records of new employees from their new hire orientations

3. Employee classification

  • Fair Labor Standards Act (FLSA) compliance: HR is responsible for ensuring that company jobs are categorized accurately regarding exempt vs. non-exempt status. This impacts overtime eligibility.
  • Contingent workforce: Workers must be classified correctly based on the type of hire, such as Independent contractors vs .W-2 employees, temporary employees, etc.

4. Compensation and benefits

  • Payroll: Ensure tax compliance related to withholdings and reporting.
  • Wages: Ensure compliance with any minimum wage laws.
  • Benefits administration to eligible employees: Administration of healthcare, retirement, and other benefits. This includes leave of absence and adherence to applicable laws such as the Family Medical Leave Act (FMLA), Americans with Disabilities Act (ADA), Employee Retirement Income Security Act (ERISA), Affordable Care Act (ACA).
Infographic depicting an HR Compliance Checklist

5. Safety and worker’s compensation

  • Disability benefits: Ensure compliance with Department of Labor (DOL) Workers’ Compensation laws that entitle eligible workers to disability benefits if injured on the job.
  • Posting requirements: Certain required Workers’ Compensation notices of workers’ rights and reporting procedures must be posted in areas visible to employees.
  • Job and safety training: If applicable, provide job and safety training in accordance with OSHA requirements.

6. Diversity, Equity, Inclusion and Belonging (DEIB)

  • DEIB initiatives: Develop DEIB policies that address equal pay practices, reasonable accommodation policies, good faith efforts, etc.
  • Affirmative Action Plans (AAP): Develop AAPs and communicate goals to hiring managers. Retention of AAP and good faith effort documentation. This is subject to audit by the Office of Federal Contract Compliance Programs (OFCCP). 

7. Data privacy and information security

  • Data handling and storage policies: This includes controls such as who has access to employee data, how it’s stored, and a data and records retention policy.
  • Cybersecurity measures: Take proactive steps in the prevention of cyberattacks and phishing scams, and development of a data breach response plan. This may include the development of additional policies, such as an electronic communication-related policy.
  • Compliance with data protection laws: Be aware of data privacy laws, such as HIPAA and make sure there are policies, procedures, and controls in place.

8. Termination and separation

  • Termination procedures: Establish a termination policy, including removing access to company network and systems. Conduct exit interviews, payout of any unused vacation time. Provide information to employees on final paychecks and the continuation of benefits (COBRA).
  • Classification of termination: Ensure accurate termination documentation and classification, such as voluntary vs. involuntary terminations. This will help if the former employer files for unemployment compensation or files any grievances against the company.

9. Unions and collective bargaining agreements

  • Contract training: Train managers on key elements of the collective bargaining agreement (CBA) if any company jobs are covered under this agreement. Covered employees can file grievances for noncompliance with the CBA, which can also be costly to companies 
  • Labor law training: Train managers on any applicable labor laws.

This checklist serves as a general guide, and HR should tailor their checklists to their specific needs, circumstances, and applicable labor laws. Regular review and updates can ensure continued compliance with evolving laws and regulations

Developing an agile HR compliance strategy

One of the many important roles of Human Resources is to ensure a safe, fair, and equitable workplace for all employees. This includes providing oversight to a company’s adherence to employment laws and regulations, as well as an understanding of which governing agencies are responsible for enforcement. 

By being proactive rather than reactive, HR can help protect the company from legal and financial risks. Here are some HR compliance best practices HR can assist with that support the adherence to labor laws:

  1. Stay current with new or updated regulations: Labor regulations can change over time, including federal, state, and local regulations. It’s important that HR supports the organization by staying abreast of new and changing regulations. Consult with internal or external legal counsel if needed.

HR tip

Refer to trusted and reliable resources to stay up-to-date with regulations: 

  1. Use HR technology: Various HR software can assist with HR compliance, such as for payroll and applicant tracking.  
  1. Practice policy documentation: Ensure that your company’s policies and procedures are documented and easily available to all employees. This can include posting the policies on the company’s internal website, in an employee handbook, a company’s standard operating procedures, or in a compliance manual. 
  1. New hire training: Offer a comprehensive onboarding process, where newly hired employees learn about company policies, procedures and processes. Ensure that employee acknowledge their understanding of the policies, their rights and responsibilities, and how to report any grievances or potential noncompliance. Employees should undergo additional or refresher compliance training at various intervals, such as annually or every 2 years. 
  1. Management and HR training: Ensure HR teams and managers are knowledgeable about leave laws and accommodation requirements and that they can communicate with employees about their rights and responsibilities. Hiring managers often need reminding of HR compliance items such as appropriate interview questions before speaking with candidates. 
  1. Regularly audit policies: Regularly auditing an organization’s policies and associated procedures is key to staying compliant. Again, companies can partner with legal counsel on this. Any changes to policies and procedures need to be communicated to employees and management in a timely manner.
  1. Compliance risk assessment: HR can design a risk assessment to take a proactive approach to understanding the key company risks and a plan to address them through policies, procedures, and other related processes and actions. The risk assessment can be reviewed on a regular basis as determined by HR.

Key takeaways

Few aspects of HR are more “high-stakes” than HR compliance. Compliance in HR includes the development of policies, procedures, and related processes that help ensure companies carry out fair practices according to law and regulations.Noncompliant companies run the risk of spending millions of dollars on fines and settlements – all of which can be detrimental to a company’s bottom line and reputation. 

The ever-changing nature of employment regulations can make HR compliance complex and seem like a chore that takes time away from running a business. The time it takes to be proactive and stay abreast of labor laws is key to a company’s long-term success when it comes to remaining in compliance. This is where, once again, HR can help “save the day” by staying up-to-date on any labor laws and regulations that may affect their organization. 

Subscribe to our weekly newsletter to stay up-to-date with the latest HR news, trends, and resources.

Andrea Towe

Andrea has 20+ years of human resources experience, including career coaching, employee relations, talent acquisition, leadership development, employment compliance, HR communications, training development and facilitation. She consults and coaches individuals from diverse backgrounds, including recent school graduates, union employees, management, executives, parents returning to the workforce, and career changers. Andrea holds a B.A. degree in communications and is certified facilitator of various HR training programs. She’s worked in the utility, transportation, education, and medical industries.

Are you ready for the future of HR?

Learn modern and relevant HR skills, online

Browse courses Enroll now