Legal compliance spans the entire employment cycle from recruiting to separation, and it frequently changes at the federal, state and local levels.
To highlight key lessons for compliance professionals, Wendy Harkness, the Nashville, Tenn.-based chief compliance officer at Harri, a human capital management platform, broke the employment cycle into manageable segments at the SHRM Talent Conference & Expo 2023 in Orlando, Fla., on April 18.
She emphasized that it’s important to “foster a very good compliance culture” in your organization and tackle compliance information and tasks in “bite-sized chunks,” rather than exhaustive, lengthy quantities.
“If you make it super simple, you will have a much better execution,” Harkness said.
Legal Concerns Regarding Training
For liability reasons, many employers require workers to participate in training sessions on safety, conflict resolution and/or preventing harassment.
Depending on the state, it may be illegal to record an employee training session, especially if you don’t get the employee’s consent first and you’re in an all-party consent state. “Any time you do training, you need to be buttoned up about how you record it,” Harkness said.
She also mentioned the high rate of mass shootings in recent years, including ones at workplaces. “Do yourself a favor. Do the active shooter training” because if a real incident happens, “not only do you open yourself up to your folks getting hurt and possibly killed in this day and age, but you open [the employer] up to possibly tremendous legal liability,” Harkness explained.
Compensation Audits Need a Plan
Many companies conduct pay equity audits to prevent discrimination lawsuits, address a demand from a board of directors or ensure their compensation structures are fair. The benefits of doing such an audit include litigation defense, legal safe harbor protections, demonstrating the company’s commitment to equity, and enhancing recruiting and retention, Harkness said.
The disadvantages of doing so include disclosure of the results and possible harm to reputation, brand or employee morale when companies don’t handle the results well.
“Once you know, you can’t unknow. You have to do something with it, and that’s one of the biggest problems,” Harkness said. The audit results could become “evidence of a known violation” if a government agency investigates and the audit wasn’t under the umbrella of the attorney-client privilege.
“If you’re going to do a pay audit, know what you are walking into and have a plan,” she advised. “Know before you open that can of worms what you’re going to be able to do about it. Go up your chain to your chief people officer or your legal or your CEO and ask. You don’t want to walk into it with a blindfold.”
“We expect that level of [pay] transparency will likely become the norm as external stakeholders demand more clarity and visibility into companies’ pay management practices,” Lindsay Wiggins, co-leader of WTW’s North America fair pay team, told SHRM Online.
Technology Is Making HR ‘More Algorithmic’
Technology is creating additional sets of compliance concerns for human resources. The field is becoming more algorithmic and technology-driven, but HR professionals should be aware of potential legal and ethical ramifications when using artificial intelligence. About 88 percent of businesses are using some form of AI in their HR processes, Harkness noted. Using a chatbot in the early stages of recruiting “is becoming more and more of a thing now,” she said. “It’s trying to make HR more algorithmic. You’re going to see a big push for that in the next several years.”
Some employers issue company-owned computers or cellphones to employees but require them to pay for the devices if they are lost or broken. However, Harkness warned that this practice is illegal if it’s done with exempt employees. “You cannot take money away from an exempt employee. [It’s] an impermissible payroll deduction, so you could get yourself into a lot of trouble” and possibly lose the exemption, she said.
Privacy Concerns Increase Scrutiny
Data privacy is an area that’s expected to get a lot of attention from lawmakers and courts in the coming years. During hiring and employment, HR might have information about a worker’s marital status, dependents, immigration status, performance reviews and disciplinary action. Some companies even obtain employees’ biometric data, such as fingerprints and face scans.
Employers need to know what employee records they’re required to keep and when certain information must be purged, Harkness said. State laws vary on this topic.