What is HR Compliance and why is it important
Businesses have been meticulous about their HR compliance amidst the COVID-19 pandemic. However, many of them have struggled and are still struggling to keep up with the rapidly changing HR compliance landscape. It is one of the critical elements of all businesses, and staying compliant is no easy task. You need to ensure that hiring practices, workplace rules, treatment of employees, and a variety of other factors comply with the current legislation.
Non-compliant employers end up paying monetary penalties and face serious legal actions such as business closure. In August 2017, the Ministry of Labour issued a $49,000.00 fine against a Toronto-based employer that failed to comply with Orders to Pay. The employer was out of business and, was supposed to pay its employees’ termination pay. Employees filed successful claims under the Employment Standards Act, 2000 resulting in the issuance of $26,000.00 in Orders to Pay. The employer did not comply with the Orders and the MOL ordered the firm to pay a $46,000 fine plus a 25% victim fine surcharge after charging 14 counts of failure to comply with the Orders under the Provincial Offences Act (the “POA”). The Canadian government penalized about 360 non-compliant businesses between 2015 and 2021 for violations in the foreign worker compliance category. A total fine of $756,000 was collected from the violators. Many small businesses went bankrupt and corporate giants suffered a severe drop in stock prices because of non-compliance legal suits.
What is HR Compliance?
HR compliance is the process of streamlining workplace policies and procedures with that of the federal and provincial legislation, to ensure that your company and its employees understand and follow these laws. It covers all the employee policies, safety procedures, and regulations that make the workplace a safe environment.
Although the authorities and labour organizations constantly emphasize the importance of being HR compliant, many businesses still remain non-compliant. These organizations are either ignorant of the regulations or have an inexperienced HR team that is unaware of the latest compliance.
Being compliant is not as simple as it sounds, especially with the regulations being changed or modified regularly.
Why be HR Compliant?
Why should your business be HR compliant? All the regulations mandated by the law are there for a reason. They are meant to keep your business safe for everyone. Neglecting compliance can cause you to pay hefty fines, business shutdown, and even jail time in the worst scenarios.
While HR compliance is an essential requirement for all organizations, it has many benefits other than being legally compliant. Offering better policies such as a fair vacation policy can show that you care about the wellbeing of your employees. This would make them want to stay with your company.
Apart from creating a better workplace for your staff, there are many other reasons why you should stay compliant. Here are a few
- It’s the law
- Mitigates risks
- Avoids hefty fines
- Motivates your employees
- Builds a culture with value
- Protects your Reputation
We have seen corporate whales taken down and others fined millions of dollars for non-compliance with HR regulations. You have a lot to lose and a lot less to save by being non-compliant.
How to be HR Compliant?
You can conduct an internal HR compliance assessment and identify the faults in your existing system by referring to regulations on the Government website. But, this requires in-depth knowledge in HR matters and it takes time for the mandatory key legislative training for all your staff.
You must also be well aware of the updated compliance regulations. It is always best to go with a subject matter expert who can get you compliant by enforcing regulations as per your province and industry. Every HR expert starts their audit with a compliance checklist.
HR Compliance Checklist
An HR compliance checklist determines where you stand in terms of compliance. This checklist includes legally required HR documents and procedures with which you can conduct an HR compliance assessment. A typical checklist covers
- Recruiting and Interviewing
- Hiring Procedures
- Policies and Procedures
- Safety Section
- Employee Handbook
- Social Networking
- Sexual Harassment, Bullying, and Drugs
- Employee File
- Unemployment Benefits
- Working Time
- Laws to Know About
HR compliance doesn’t stop with all these. You have to ensure that everyone accountable for compliance in your company undergoes legislative training so that they respect and follow the regulations. As per the law, the business owner, the staff, seasonal staff, and volunteers have to undergo the training.
It is best not to take the support of inexperienced HR consultants as they might not have the adequate knowledge to get you compliant and might not be well acquainted with the latest legislation in HR compliance. It is important your HR expert understands your working industry, your province, and the regulations associated with these.
Here comes the tricky part. As mentioned earlier the HR compliance landscape is ever-changing with regular policy updates and regulation changes especially with the COVID-19 pandemic going around.
“Every Canadian has the right to work in a healthy, respectful and safe environment. The Government of Canada is committed to ensuring that all federally regulated workplaces, including the public service, are free from harassment and violence of any kind. The new Workplace Harassment and Violence Prevention Regulations announced today will thereby enable employees and employers to more readily know their rights and duties and will strengthen the measures to prevent and address all forms of misconduct in the workplace.”
– The Honourable Jean-Yves Duclos, President of the Treasury Board of Canada
The Government of Canada published new regulations to prevent harassment and violence in federal workplaces and these regulations came into force on January 1, 2021
Staying ahead of the HR compliance curve involves time-to-time update and revision of your existing compliance policies and aligning them with that of the latest legislative regulations. You need a dedicated HR expert to constantly watch the compliance landscape and do the needful to keep your business compliant. Along with this, a periodic and stringent compliance review is necessary to unearth potential compliance risks. You need to have detailed and strict processes to communicate and enforce the compliance policies at your organization.
While handling Human Resources is a time-consuming task on its own, keeping up with compliance is a nightmare for many small businesses. You need a dedicated HR expert to act as one point of contact in case of compliance issues.
To save time and mitigate the risk, many companies outsource their HR compliance management to experts in the HR space.
The Covid 19 pandemic has shifted everyone’s priorities and especially that of the human resources. With more and more companies adapting to remote working, and with provincial laws changing rapidly, companies are facing new compliance challenges. HR compliance was always of utmost importance, and now it has become indispensable.