The effective management of human resources is an essential component to achieve success. Employees are the assets of every organization that must be handled with expert precision to gain maximum output. Hiring, retaining, managing payroll, and maintaining personal data becomes a significant part of the human resource management process. And this process may further complicate at the time of global expansion of your business. It is even more critical when you wish to welcome international talent into your organization. This is where HR compliance comes into the picture.
What Do You Mean by HR Compliance?
HR compliances are the rules and regulations that an organization and its employees must follow. These business rules differ in different countries. Therefore, the companies need to understand the policies well to remain safe from legal trouble arising from non-compliance issues. It is equally important for the employees to be aware of the company’s compliance management so they too can abide by the rules for a safe continuation of their professional journey. The EOR or Employer of Record can simplify human resources management, protecting your company from any external or internal disruptions at the workplace.
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Who Is Responsible for the HR Compliances In a Company?
The human resource team manages all the processes related to the staff of the organization. But are they solely responsible for any non-compliance issue? The answer is no because the first few people who will be entrapped in this condition are the CEO, directors, and the CTOs of the company. They are the ones answerable for any issue of non-compliance in their organization. Therefore, every worker should be trained, The human resource team should educate every manager, and every staff should know the rules and regulations of the company.
What Are the Most Common Issues In HR Management?
There are issues related to the employees’ payroll, securing the employees’ data, tax rules of the country, and adherence to the labor laws. If you wish to hire global talent, you must comply with the country’s work policies. For instance, if your business connects with EU member countries, you must abide by the GDPR regulations. This general data protection regulation is for safeguarding the employees’ data, non-compliance, which can lead to serious legal consequences. Labour laws in India do not support “At will termination”; thus, there has to be a fair reason to terminate any employee. In case of a complaint against any unfair termination, the company might face legal problems, but it can also hamper the organization’s reputation.
How Can You Ensure Proper HR Compliance for Your Employees Globally?
Rules and regulations are very dynamic, and they change from time to time. You need to be proactive in adapting to the changing scenario and being flexible enough to implement new laws if required. Starting from valid visas to knowing the government rules, your company must plan every step in an organized manner. There are several restrictions or barriers that you might come across in the global expansion of your business. Some issues are language barriers, cultural barriers, different tax laws, financial problems, and many more. Here EOR or Employer of Record can help you strategize the policies to mitigate all the compliance issues.
Few steps that you can follow for strategically managing HR compliance are as follows:
- Gain country-specific knowledge – As mentioned in the article above, every country has its way of working. Not only the government’s rules and regulations but there are differences in social factors and payroll-related factors as well. The work culture differs for different companies. Gaining knowledge about the unique work ethics of that country where your organization wants to extend can help you adjust well with the country’s work culture. The way people greet, dress code, manners, etiquettes everything differs country-wise.
- Varied rules of various countries – In the United States, form I-9, an employee authentication form, must be submitted to comply with the country’s regulations. In India, the Minimum Wages Act, 1948 determines the minimum payroll of an employee based on the workplace of jobs like government or private or sector-wise distinction of employee work. There are other laws in India, like employment laws, tax laws, foreign exchange laws, etc., that the companies must be well-aware of. EU maintains GDPR regulations, and the US follows non-discrimination recruitment rules. Hence, rules keep changing with time and according to the country, learning about the rules and keeping your team updated about these regulations are essential.
- Documentation – Prepare a handbook for the employees to educate them about the work culture, country-specific compliance, compensation laws, additional benefits, etc. The guide must follow the rules of the country where the employee works. As every country provides different compensation, wage rates, and employee benefit schemes, the handbook must provide all the information. The handbook of a company should provide vital information about the company and educate workers about the way their employment should proceed with the company.
- Do the research – Research well before entering a new market. Non-compliant issues can have severe consequences and may lead to the detention of the people responsible for them. Suppose you wish to attract global talent to your company. In that case, you must let the employee know everything related to your company, and you must see the country’s policies where the employee resides. Understanding the target market will give you an idea if the place is a good fit for your organization or not.
- Keep yourself and your employees up-to-date – HR compliances are ever-changing; keep up with the changing rules to avoid any non-compliance. UK’s working time (coronavirus) (amendment) regulation 2020 that came into force on 26th March 2020, provides an exception to the working time amendment law of 1998. According to the new law, the employees in the UK can carry forward their leave in the next two years. India has updated new rules amid the pandemic and has mandated social distancing rules for every worker. Likewise, every country updates rules for employees according to the prevailing situation and need of the hour.
The EOR or Employer of Record can help simplify the complexities of HR compliances:
- EOR can handle complex international business compliance such as visa issues, payroll, tax, employee benefits, compensation, recruitment, and employee termination. There are different EOR services such as International PEO (Professional Employer organization), Foreign subsidiary as a service, Administrative service organization (ASO), and Business process outsourcing (BPO). All these services are established to maintain smooth human resource management in the organization.
- EOR can save the business time as it takes up all the workload related to HR compliance. The businesses can convey their business needs, and the Employer of Record will work accordingly to fulfill their requirements. They find the most suitable personnel for the vacant position and handle payroll, which you think the employee deserves. They are legally responsible for the payment of the employees. The EOR ensures that the HR process meets all the compliance needs.
- Understanding the global market can be an arduous task. It can take up your precious time that you might invest in the core business activity. However, it is critical to know the compliance rules of the country that your business is dealing with. The EOR effectively manages this part. They study the market, so you don’t have to worry about unknown facts about compliance in different countries.
- The overall administration of the HR compliances is handled efficiently by the Employer of Record. From recruiting to training and ensuring compliance, they sort out every HR-related task and provide you the best in the class team by saving your time, effort, and money. The EOR administers all the legal and ethical responsibilities. They study the local laws; they understand the criticality of every government rule and then function accordingly.
Connect with the Best Employer Of Record
Expansion to global markets opens up new gateways of success for the organizations. But it comes with a lot of responsibility of complying with the rules and regulations of the country. It is essential for the employee’s benefits, so they get fair wages and are fairly treated. It is vital for the organization because non-compliance can take a toll on the reputation and even on the future of the business. However, opting for the best EOR is essential as you trust the organization on many significant grounds.
The EOR will help find global talent from all over the world. You can rely on a complete payroll process, cost-effective recruitment, time-saving management, and most importantly, compliance. Government rules, tax rules, insurance, employees’ laws are all part of the Employer of Record service. Partnering up with the experienced professionals of the Employer of Record will organize, simplify, and manage all the domestic and international complacencies, making the human resources management hassle-free for the organizations.