In todays rapidly evolving business landscape, numerous companies are moving towards global employment. With different sets of labor laws prevailing in different countries, it is crucial to comply with the laws of the country you wish to expand to. Complying with global HR laws and regulations can be challenging but is unavoidable.
In the U.S., a company paid $29.3 million for violating multiple U.S. sanctions, which clearly indicates the serious consequence of noncompliance. Therefore, it is imperative for companies to conduct regular HR compliance audits to ensure that they adhere to all relevant regulations.
What is Global HR Compliance?
Global HR Compliance is the policies and regulations to ensure uniformity in workplace code, hiring practices, treatment of employees, and other industry-based rules. Further, this ensures a consistent process of work culture within the organization across the globe. However, the HR policies need timely updations, as per the changing labor laws of nations. The task can be cumbersome for an organization to keep up with, and any failure may lead to legal issues and penalties.
Most common Global HR Compliance Issues
According to HRDive, 49% of American workers will look for a new job after one or two instances of compliance errors. Let’s dive into some common Global HR compliance challenges most organizations face for distributed teams.
- Labor laws and regulations:
Businesses often need to comply with labor laws related to working hours, overtime pay, and other standards of employment. Failure to stay updated can result in legal and financial consequences for the organization. Cases of noncompliance with labor laws can lead to hefty penalties and legal consequences.
- Payroll & compensation:
Payrolls, taxes, and social security contributions are some key aspects that every organization needs to handle regularly. Regulations and contributions vary with countries, and as an employer, you need to be aware of these, which can be a complex task.
- Retirement and employee benefits:
Retirement/Pension laws strictly followed by most countries are not something to be taken lightly. The deductions/contributions must be according to the governmental guidelines so that the employees get the benefits they deserve. In addition, employee benefits such as maternity, sick, paternity, and 13th-14th month pay bonuses are also necessary. Employers can provide these based on a mutual agreement if not mandatory.
- Workplace safety:
Some countries have strong policies for the safety of employees as liability insurance. In the United States of America, the OSH Act of 1970 regulates the penalty if there are any safety discrepancies at the workplace. Therefore, it is imperative to comply with such laws to avoid penalties and legal issues.
- Termination policies:
The labor codes usually specify numerous employment termination procedures. These policies and procedures are mostly straightforward; however, disregarding them can lead to noncompliance pitfalls at any moment.
Organizations can ensure compliance with relevant laws and regulations addressing these common global HR compliance issues. With proper strategic measures, employers can mitigate most of these issues.
How HR Team can ensure Global compliance
Establishing global compliance is critical for HR teams in any international organization. Although with simple strategies and ways, any global hr team can ensure compliance.
- Staying updated with laws and regulations:
One of the most important aspects is to stay updated with the labor laws and regulations of the country. The organization can have a number of ways to update and incorporate changes, such as incorporating local experts and audit processes.
- Staying updated with HR policies:
HR policies keep on updating on a regular basis. The policies must comply with the labor standards and the organization’s culture and values.
- Working with local experts:
In order to ensure that the HR team is complying with local laws and regulations, they should collaborate with experts. These experts can help with new changes and updates in the employment standards of that country.
- Conducting regular audits:
One of the critical aspects of global HR compliance is to have consistent updates for audit methods. The audit process results in the management of compliance within the organization across borders. However, there are key methods and procedures for auditing global hr compliance.
Implementing Effective Measures for Auditing Global HR Compliance
Upon understanding the necessity of managing global HR compliance, the question shifts to how and what an effective evaluation measure can be. For any business, the first step should be an audit process to detect and mitigate compliance issues.
In order to do that, the organization can build a global audit team to rectify the global HR compliance issues. Once the audit team is established, the challenge becomes managing a global audit project, specifically how to effectively and efficiently conduct the global HR audit.
Simplify the global audit processes with a measurable and easy-to-execute checklist. Each audit process has its own requirements on directions, goals, and specific countries. For successful auditing, an organic approach is necessary. The five distinct steps involved in the organic approach to conducting a global HR audit are:
1. Identify audit context and scope
The first step of the audit process is to recognize the global HR audit’s context and scope. This must focus on the relevant and potential issues for the current audit process. Consider the organization’s key challenges from time to time while employing from different countries.
2. Create a master audit checklist template
HR processes vary from country to country, which needs a local checklist or questionnaire to align with the audit. Having a master template to fit the audit processes once the audit context is finalized. Some of the key points to mention on the checklist are:
- Local Labor laws/Employment laws
- Payroll and Compensation issues
- Employee Benefits, Pension and Leaves
- Liability
- Data Privacy issues
- Termination regulations
3. Align with country-specific audit checklists
In-depth auditing is necessary for the business to function smoothly in a specific country. The checklist creates a flow to get in hands with the local country’s rules and regulations around HR compliance.
4. Conduct the audit
Determine the approach and scope of the audit process before proceeding. With all the processes in alignment, auditing can take place smoothly. While gathering compliance information for each country, the checklists must be filled with all the required data and information.
5. Report the implementation measures
The final step of the auditing process is to create a summary report of the findings while taking measures to protect data privacy and minimize potential legal risks. The report must not contain any information about any individual employee or client.
Benefits of Outsourcing Global HR Compliance
The overall process of being compliant with Global HR policies is cumbersome. Developing a team and working with local experts can result in time and expenses. The best and key practice is to outsource Global HR compliance services.
Outsourcing global HR compliance can offer a number of benefits to the organization, including:
- Global expertise access: The organization can access professionals on this aspect to help with HR compliance. These professionals have knowledge of labor laws and regulations and have experience in dealing with such complexities.
- Increased efficiency and productivity: Outsourcing Global HR Compliance services can lead to more efficient processes. Furthermore, this results in less time and more productivity.
- Cost saving: Outsourcing processes can reduce the cost of complicated procedures required for local auditing. With the right processes in place, the organization can save from legal penalties and fines.
The above-mentioned are some key benefits an organization can avail of outsourcing Global HR Services. Besides that, outsourcing offers a reduced risk of non-compliance, improved scalability, and enhanced data security. Ensuring compliance with the organization creates a safe and secure workplace. With all this included, choosing an exemplary Global HR Compliance service can be easy and smooth.
Hire the best global HR Compliance Service
As a SaaS-based industry expert, Multiplier is a trusted global organization seeking to ensure compliance with complex and ever-evolving HR regulations worldwide.
With its expert team, Multiplier can navigate and mitigate the challenges of global HR compliance effectively. Organizations can focus on their core business activities, knowing that their HR compliance needs are in capable hands.
Ensure global HR compliance effortlessly with the best EOR provider. Talk to our experts now!
