Toolkit

Compliance
Must-Haves for
Every HR Pro
 Whether through internal policies outlined in your
employee handbook or the many requirements defined
by law, nearly every interaction between your company
and your employees is governed in some way.

Employers are subject to various federal, state, and local regulations

that encompass the entire employment cycle — from recruiting and
interviewing through an employee’s last paycheck and even beyond.
Most noncompliance comes with penalties that can add up. For example,
just one Form I-9 mistake may result in a penalty of $252 to $2,507
(as of April 2023) per employee whose verification was incorrect.
There are four primary types of HR compliance that can have a direct
impact on your workforce:
Noncompliance penalties • Statutory – employment and workforce legislation, such as minimum
can cost millions. wage and age requirements.
• Regulatory – rules determined by a regulatory body, such as the
For example, an incorrect Occupational Safety and Health Administration (OSHA) or a state
Form I-9 fine can be health department.

$252 to $2,507 • Contractual – agreed-upon obligations and performance standards

defined in contracts with partners and employees.
per employee
• Union law — rules set forth by a specific union.
as of April 2023
These categories are just the tip of the compliance iceberg, and HR
professionals have to navigate some pretty turbulent waters.
Key Laws to Follow
The U.S. Department of Labor (DOL) administers and enforces
more than 180 federal laws related to workplace activities. While
your company may not have to comply with every one of them,
here are some major federal employment laws and governing
bodies that HR professionals will almost certainly come across.

Fair Labor Standards Act (FLSA)

The FLSA establishes several key employment standards,
including minimum wage, overtime pay, recordkeeping of
employee time and pay records, and child labor provisions.
Currently, the federal minimum wage is $7.25 per hour,
but some states and local governments have set their
own minimum wage rates.
The FLSA applies to employees in the private and public
sectors, including Federal, State, and local governments.
It does not, however, apply to independent contractors.

Family and Medical Leave Act (FMLA)

The FMLA applies to employers that have had 50 or
more employees for at least 20 weeks in the current or
prior calendar year. It entitles eligible employees to
take up to 12 weeks of unpaid, job-protected leave
for specified family and medical reasons with
continuation of group health insurance coverage.
 Key Laws to Follow

Occupational Safety and Health Act (OSHA) Equal Employment Opportunity Commission (EEOC)
The OSH Act outlines an employer’s rights and responsibilities The U.S. EEOC is an independent federal agency responsible
in providing a safe workplace and protects employees’ for enforcing several federal laws that make it illegal
rights to work in conditions that do not pose a risk of to discriminate against a job applicant or an employee
serious harm. Additionally, some states have their own because of the person's race, color, religion, sex (including
OSHA standards. pregnancy and related conditions, gender identity, and
sexual orientation), national origin, age (40 or older),
disability, or genetic information.
Employee Benefits Security Administration (EBSA)
The EBSA’s mission is to ensure the security of the retirement,
National Labor Relations Act (NLRA)
health, and other workplace-related benefits of U.S.
workers and their families. Laws they administer include: The NLRA protects workers’ full freedom of association,
providing employees at private-sector workplaces the
• The Affordable Care Act (ACA) makes affordable
fundamental right to seek better working conditions and
health insurance available to more people.
bargain collectively without fear of retaliation.
• Employee Retirement Income Security Act (ERISA)
establishes minimum standards for pension plans in Worker Adjustment and Retraining
private industry.
Notification (WARN) Act
• Comprehensive Omnibus Budget Reconciliation Act of
When an organization closes a plant or undergoes mass
1985 (COBRA) gives eligible employees the ability to continue
layoffs, the WARN Act gives affected workers and their
health insurance coverage after leaving employment.
families enough transition time to seek alternative
• Health Insurance Portability and Accountability Act employment or enter skills training programs. In addition
(HIPAA) protects sensitive patient health information to Federal requirements, several states also have their
from being disclosed. own requirements.
• Genetic Information Nondiscrimination Act (GINA)
prohibits discrimination based on genetic information
regarding health insurance and employment.
Common Issues to Avoid
Discriminatory Employment Practices and Policies
• Discrimination is prohibited in all aspects of hiring
and employment.
• Employers should avoid discriminatory job
advertisements, and promotion decisions.
• It is required for certain employers, and recommended
for others, to provide reasonable accommodations for
employees or applicants with disabilities.
• Laws are enforced by the EEOC and State agencies.

Incorrect Employee Classification

• The FLSA requires employers to correctly classify employees
to determine eligibility for overtime and benefits.
• The two major employee classifications described in the
FLSA are exempt and non-exempt.
• Other classifications include part-time, temporary,
seasonal, and independent contractors.
 Common Issues to Avoid

Complying with State and Local Employment Laws

• Federal laws typically set minimum employment
standards; however, states and localities may set
higher, more favorable ones for employees. Examples
include higher minimum wage, pay transparency,
employee privacy, and paid leave.

Outdated Policies and Procedures

• Hiring managers and people managers often
need guidance and even formal training to
avoid discriminatory practices.
• Communicating changes to employment laws
and your policies is essential in helping everyone
do their part to keep your workplace compliant.
Compliance-Related Days to Know

January February
• Post OSHA Form 300A Summary through • Annual Form 940 Due (If quarterly FUTA
March 2 taxes were paid when due)
• W-2 and 1099 distribution and filing deadlines • ACA Forms Paper Filing Deadline,
• Quarterly Forms 941 & 720 due including Forms 1095-B and 1095-C

• Distribute 1095-B & 1095-C Forms to employees Holidays

• Annual Form 940 due (If quarterly FUTA
• President's Day
taxes were not paid when due)

Holidays
• New Year’s Day
• Martin Luther King Jr. Day

March April
• Form M-1 Filing Deadline • Deadline to file 1099-MISC without NEC to
• Forms 1095-B & 1095-C Furnish to Employees IRS electronically
March 1 Deadline for E-Filers and paper filers. • Tax Day
• OSHA Form 300A Due • Summary Plan Description (SPD) due to
• Forms 1095-C, 1095-B, Deadline employees for a calendar year plan and to
new enrollees within 90 days of enrollment
• First Quarter Ends
• First quarter Form 941 and State returns due
Holidays
Holidays
• Employee Appreciation Day
• Administrative Professionals Day
• Daylight Savings Time Begins
 Compliance-Related Days to Know

May June July August

• California Pay Data Report Due • Second quarter ends • Second Quarter Form 941 Holidays
Second Wednesday of May and state returns due
Holidays • National Eye Exam Month —
Holidays Holidays remind employees of vision
• Juneteenth benefits, if applicable
• Memorial Day • Independence Day

September October November December

• National Payroll Week • QSEHRA Notice Deadline (for Holidays • Nondiscrimination testing,
• SAR Furnish to covered QSEHRAs that begin Jan. 1) 401K plans, 125 Premium
• Daylight Savings Time ends
participants for calendar year • RDS Application Due to CMS Only Plans (POP), and flexible
• Veteran’s Day spending account (FSA)
plans deadline (for plan years beginning Jan. 1)
• Thanksgiving nondiscrimination testing
• VETS 4212 Reports Due for • Medicare Part D Notice of (if on calendar plan year)
Federal Contractors and Creditable Coverage Delivered
Subcontractors to Plan Participants • Review employee handbooks
and distribute next year’s
• Third Quarter Ends • Third Quarter Form 941 calendar
and state returns due
Holidays • End of Fourth Quarter
Holidays
• Labor Day Holidays
• Indigenous People Day
• Christmas Day
• New Year’s Eve
Policies to Consider
Your organization’s policies and your success in compliance
go hand in hand. Keep these areas in mind when creating
and revising your company policies.

Recruiting and Onboarding

• Avoid inappropriate or discriminatory language in job
listings and interviews.
• Standardize recruiting and hiring processes to ensure
every candidate has a fair experience.
• Collect Form I-9 from all new hires and securely store
forms physically or digitally. Note, some states also
require employers to participate in E-Verify.
• Host a new hire orientation that explains employee
responsibilities for compliance and how to report
compliance violations.

Communicating Company Policies

• Document all company policies and make them easy to access.
• Provide all employees with an up-to-date handbook that’s
easy to navigate and understandable.
• Collect signatures from new hires confirming their review
of the company policies, and collect all employee signatures
whenever you make updates.
 Policies to Consider

Employee Benefits
• Ensure minimum healthcare coverage for all
employees (if you have at least 50.)
• Send out a summary of benefits and coverage during
open enrollment.
• Monitor the status of employees on leave to ensure
compliance with FMLA.

HIPAA and OSHA

• Store employee health plan records with proper
security and access controls.
• Conduct regular audits of your data security and
processes to prevent breaches.
• Maintain safety records, including a log of work-
related injuries and illnesses. This is the purpose of
OSHA Forms 300 and 301.
• Report incidents to OSHA every year
before March 2.
Penalties Overview
Because there are so many different compliance requirements an employer
might face, repercussions for noncompliance range from penalties for failure
to correctly report data to audits by an enforcing agency. And, in some cases,
wage and hour lawsuits.

Common Noncompliance Fines

Fines may vary based on the size of the organization, the number of days the
organization has been noncompliant, and the number of past violations on record.

Form I-9 American Disabilities Act (ADA)

• Paperwork violations • Physical barriers that interfere with the
• Knowing employment of any worker job functions of employees with disabilities
without work authorization • Inadequate processes or failures related
to requests for reasonable accommodations
ACA
• Not offering affordable health coverage COBRA
• Not offering coverage that has at • Not offering COBRA to employees
least a minimum value to employees who have been laid off
• Not offering minimum essential • Notices issues / failures
coverage (i.e., a plan that applies to
at least 95% of full-time employees) FLSA
• Reporting violations • Violation of overtime regulations
• Use of child labor

HIPAA
• Privacy violations
 Penalties Overview

Reputation Damage
Compliance — or a lack thereof — can also damage
both your customer-facing brand and your employer
brand. Loyal clients will lose faith in your business if they
feel their information is compromised. At the same time,
showing employees that your company is committed to
operating safely, fairly, and within the law helps them
feel confident in their work and aligned with your values.

Prison
For severe infractions of certain compliance laws,
individuals can be criminally prosecuted.

Business Disruptions
Non-compliance could lead to operational disruptions.
Compliance Is Hard — Now What?
We know compliance is just one of several areas where HR is expected
to be an expert. However, despite needing to know and apply various
labor laws, HR professionals aren’t lawyers.

To map out an effective compliance strategy, a good place to start is

an audit of your current processes and policies to identify gaps and
high-risk areas. According to SHRM, an HR compliance audit generally There are several advantages to using
consists of two parts: (1) an evaluation of internal policies, practices,
an integrated solution like Paylocity’s
and processes; and (2) a review of employment data. Warning signs
to watch for include:
Compliance Dashboard.
Through the tool’s intuitive interface, you can
• High or increased turnover and • Missing employee information
visualize and assess your company’s data
absentee rates or insufficient record retention
completeness and readiness for multiple
• Inaccurate timekeeping • Job misclassification compliance-related processes — from
automating I-9 work authorization verification
• Form I-9 errors
to managing the ACA to analyzing and
reporting on EEO data.

See Paylocity in action on a live demo and

discover the power of simplified compliance.

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