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Resource Center / Employment Laws

How to Stay Compliant While Working with an Outsourced HR Partner

In our current economic climate, compliance is becoming more important than ever. Here’s how teaming up with an outsourced HR business partner can help.

The letter "J" for Justworks.
May 28, 20205 minutes

Most small business owners are tasked with a dizzyingly wide array of HR responsibilities. And each of those responsibilities — whether it’s recruiting new employees, managing payroll, or administering employee benefits — must be handled in a way that complies with local, state, and federal law. Even in normal times, it can be tricky for many small business owners to balance their day-to-day responsibilities with the ongoing task of maintaining HR compliance.

It’s not so much a matter of competence as it is a matter of bandwidth. Even the most diligent business owners occasionally feel overwhelmed by the demands of staying compliant. According to a survey from the National Small Business Association (NSBA), one-third of small business owners spend more than eighty hours every year (roughly two full work weeks) on compliance-related tasks. And now, in the middle of a national emergency that has brought new labor laws and compelled millions of small business owners across the country to downsize, it isn't getting any easier.

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Thankfully, using an outsourced HR provider like Justworks can make it easy for you and your team to stay on top of payroll, benefits, and compliance — even during a pandemic.

But before we examine how working with an outsourced HR business partner can help your business, let’s first break down why compliance is so important.

What Is HR Compliance and Why Does It Matter?

Every company must adhere to its own policies, in addition to applicable federal, state, and local laws and regulations.

That adds up to a lot of legal housekeeping, and it’s traditionally the role of HR to oversee HR compliance — that is, to make sure that a business is implementing the relevant company policies, procedures to ensure compliance with applicable laws. In other words, the primary purpose of HR compliance is to keep the organization compliant. Doing so may include making sure employees have access to the full suite of rights and benefits that are made available, and that employers remain up-to-date with their internal policies.

Maintaining Compliance While Outsourcing HR

Over the last few months, the COVID-19 pandemic has completely transformed the business landscape. Millions of employers have been forced to lay off large numbers of employees. New labor laws and public health policies are being developed that will usher in a totally new set of workplace norms and best practices. In times like these, compliance is more important than ever. Unfortunately, many businesses have had to downsize their HR teams in order to adapt to the harsh new financial realities of the pandemic.

This is where teaming up with an outsourced HR business partner comes in.

In addition to helping you oversee day-to-day HR functions like payroll and benefits, partnering with an outsourced HR business partner can help you to stay on top of compliance in a rapidly changing legal and professional landscape.

Here are some of the major ways that an outsourced HR business partner can help you to stay compliant during the COVID-19 crisis (and beyond):

  • Create an employee handbook. An outsourced HR partner will be able to help you create employee handbooks that contain and communicate optimized workplace policies. As mentioned, the specific details of employee handbooks will vary from business-to-business. That said, there are some general considerations that employers should be aware of. To learn more, check out our employee handbook starter guide.

  • Evaluate (and update) your hiring and recruiting procedures. Every one of a company’s interviewing, hiring, and recruiting procedures will need to comply with local, state, and federal employment and anti-discrimination laws. Teaming up with an HR business partner will help you to ensure that your onboarding procedures are legally sound.

  • Maintain compliance with local, state, and federal wage and hour laws. It can be tricky for many business owners to keep track of the various and ever-changing employee wage and hour laws that they’re subject to. Thankfully, outsourced HR business partners specialize in helping business owners comply with wage and hour laws.

  • Establish compliant paid leave policies. Paid leave benefits can be especially tricky because there are just so many requirements to keep track of at the local, state, and federal levels. Things are further complicated by the fact that new laws are introduced in response to changing current events. The COVID-19 pandemic, for example, has necessitated the passing of a flurry of new paid leave laws by the US Department of Labor and various states. Luckily, an outsourced HR business partner can provide you with the extra support that you’ll need to keep your paid leave policies up-to-date.

  • Track your employees’ verification paperwork. Onboarding a new employee requires a lot of paperwork. Employers and employees must fill out and submit a number of forms, like Form I-19 and Form W-4. An outsourced HR business partner can help employers streamline this process by providing software functionality that enables employees to complete forms electronically in a way that directly integrates with payroll processing. An HR business partner might also have functionality that enables easy online collection and storage of such forms, making it much easier to keep important files organized.

Keep Your Team Empowered and Informed

Every business has been affected to one degree or another by the economic fallout of the COVID-19 pandemic. And as we continue to adapt — as individuals, teams, and communities — to the rapidly changing world around us, it’s becoming more important than ever for us to be able to take full advantage of as many helpful resources as possible.

If you own a small business, teaming up with an outsourced HR provider like Justworks can streamline and simplify many of your everyday tasks with HR tools and guidance. This will be an especially powerful strategy in the next few weeks and months as the professional landscape continues to transform in unpredictable ways.

You can also keep your team informed with the Guide to Navigating COVID-19, an online resource that contains key information that business owners need to be aware of during the pandemic.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.