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Does it seem like there’s another employment law you have to worry about at every turn? With the number of new laws and changes to existing laws, it can be tough keeping up.

Unfortunately, you cannot underestimate how labor laws affect your business when you consider the risk of costly litigation and penalties.

Here are four big ways you can avoid making common HR compliance mistakes.

1. Hiring 

One of the best ways to ensure you stay within the lines during interviews is to ask each candidate the same questions. Prepare in advance by putting together a checklist of questions based on the job’s functions. 

By keeping the interview focused, this will help you avoid claims of bias. If you deviate from the list, this may lead to accusations of discriminatory hiring practices from job candidates.

2. Terminations

Written policies and procedures help govern employee conduct. Make sure you have clear policies in place so employees understand what’s expected of them.

When policies are broken, it should be documented to support your claim of an employee’s unsatisfactory job performance. Your business may find it difficult to defend a discrimination or unemployment claim if you fail to do so.

3. Employee records

There are several considerations that should be made when storing employee data, including:

  • The Fair Labor Standards Act (FLSA) – This requires you to keep certain employee records. It includes everything from employees’ names, addresses and social security numbers to their pay rate and hours they’ve worked for three years.
  • I-9 records – The U.S. Department of Homeland Security’s Immigration and Customs Enforcement conducts random audits of I-9 forms. The I-9 verifies employee identity and work eligibility in the United States. Keep these in a separate area for easy access in the case of an audit.
  • HIPAA records – The Health Insurance Portability and Accountability Act, or HIPAA, protects the health information of all employees. You must keep this information secure and confidential.

Be sure that you know how to handle sensitive data before you clean out your file cabinet.

4. Classification of workers

Make sure you’re carefully classifying workers when you have new hires.

The Department of Labor and the IRS have a close eye on how businesses classify employees. While the IRS focuses on whether individuals are properly classified as employees or independent contractors for tax purposes, the DOL seeks to ensure that employees are properly designated as exempt or nonexempt workers.

Additionally, employee classification can affect your compliance with everything from the Affordable Care Act to state and federal tax laws and beyond. Misclassification could lead to hefty fines.

Need more HR guidance like this? Visit www.insperity.com/ima to learn how Insperity delivers full-service HR that will help keep you in compliance with employment laws and regulations.