There’s no denying the world of HR compliance is a complex one.
With so many hats to wear as organisations become more global, it’s challenging to keep up - and with regulations and legislation constantly changing, maintaining compliance will only continue to become more complicated.
What’s more, if your business is expanding multinationally, with each new territory there will be even more laws and regulations to navigate - plus, these legislations are often documented in native languages.
It goes without saying that neglecting HR and employment compliance can have disastrous consequences. So, what’s the solution for enterprises struggling with international compliance?
Whilst on-the-ground support is always the best scenario, it might not be the most viable option for your business, especially if you are experiencing a period of rapid expansion. And that’s where HR outsourcing comes in…
HR compliance explained
HR compliance is essentially a commitment by an organisation to follow the working standards and employment laws set out in a certain city, state, or country.
It involves ensuring that employees understand and comply with these laws throughout their employment, and entails staying up to date with any changes to employment laws.
It’s no wonder, then, that managing multitudes of employees in different location in accordance with these different laws can be challenging.
The different types of compliance
Generally speaking, there are three different types of compliance to consider: statutory compliance, regulatory compliance, and contractual compliance:
Statutory compliance refers to the legal obligation for an organisation to be compliant;
Regulatory compliance refers to a legal obligation issued by a regulating body;
Contractual compliance refers to an obligation made between the employer and employees via and employment contract.
Failure to adhere to any of these three types of compliance could ultimately result in legal implications causing both financial and reputational damage, and in some cases, criminal charges.
3 ways a global provider can help ensure you are compliant
1. They’ve got their finger on the pulse of regulatory updates
Unfortunately, compliance is not a one-time concern. In fact, one of the key aspects of compliance is that it is always evolving. Indeed, some employment regulation changes are made every year regarding issues such as taxes, healthcare, employee classification, safety violations, and more.
Non-compliance with these laws can result in cost fines and even a possible lawsuit, so it’s pertinent that you keep up with these changing rules in all the countries your business operates in. What’s more, regulators expect you to implement these new laws immediately, meaning that time is very rarely on your side.
Essentially, if your organisation is going to remain compliant, you need to be as proactive and reactive as possible to new rules and regulations so you can stay ahead of the game. But with so much else to think about at any one time, keeping track of such changes can be an immense challenge.
This is where HR outsourcing can be a game changer. Enlisting the help of a dedicated HR specialist can help ensure that you stay on top of these changes and that your organisation continues to comply with the ever-changing employment laws and regulations.
2. They are up to date with local laws
As well as keeping up with changing rules and regulations, it’s essential that your HR department is well versed in the existing labour laws in each location. Each country will have its own statutory requirements, often detailed in the local language.
For example, in Mexico, new hires need to be registered with the government within five days, whereas in Spain, registration must occur before the employment begins. In Argentina, employees must sign to confirm receipt of their payslips, whereas, in Italy, workers must pay monthly tax returns. There are also different benefits for each country to consider, too, along with insurance, termination policies, and retirement and pension plans.
Keeping up with existing laws and ensuring that nothing gets missed is a headache for even the most experienced of HR professionals. Plus, if that wasn't enough, different regions and municipalities within each country will also have their own laws and tax deadlines to comply with - and again, non-compliance with such laws and deadlines can result in penalties and even legal action.
With so much to keep on top of at any one time, the benefits of outsourcing to a global HR provider with specialist expertise in each location speaks for itself.
3. They’ve got local and cultural expertise
When it comes to compliance, of course, understanding the law is key. But as we explained above, it is also essential to ensure that your employees understand and comply with these laws throughout their employment - which is why it’s beneficial to have local and cultural expertise.
The law alone is not enough to keep international employees happy, and if you are going to ensure your employees are satisfied, you also need to know about the local customs and practices that aren’t necessarily spelled out in the law - and this is something that is best gained through first-hand experience in a country.
Want to find out more about how activpayroll can help you to keep up with HR compliance?
There’s no denying that the issue of global HR compliance is unavoidably challenging and complex. However, by facing it head on and centralising your HR processes in one place, you can focus on business-critical issues whilst remaining confident in the knowledge that your organisation remains compliant.
If you’d like to learn more about how activpayroll uses our global HR expertise to help you deliver efficiency and compliance, contact us today to learn more about our global HR services and how we can help you continue to grow your business and maximise your international operations.