HR compliance is an incredibly important issue for every company. Is your company compliant with state and federal employment law? Has your company unknowingly performed illegal HR practices in the past, but somehow managed to escape responsibility? If you are a business owner, these are questions you should be asking yourself and those running your human resources department.

One of the consulting jobs I took a few years ago involved overhauling the recruiting function of a mid-sized company in the Northeast. Before I arrived, the recruiting was primarily performed by outside recruiting agencies and in-house by various people within the different business units. The company was spending well over $100,000 every year on agency costs and leaving itself vulnerable to legal action because of its lack of HR compliance.

HR Compliance Is Essential

How long do you have to keep a candidate's application before you can discard it? What questions can you ask in an interview? What questions can you not ask during an interview? What is the Equal Employment Opportunity Commission? How can your company legally fire an employee?

These are critical questions. Do you know the answer? If you don't know the answers to these questions, then how do you know if your company is compliant? A lack of HR compliance could result in the downfall of your organization. You can't just fire people anymore. In most cases, HR has to document an employee's poor performance over time before that person can be legally terminated. In addition, the person being terminated should have received at least one documented warning from HR.