HR compliance checklist: Staying compliant in 2024

Human resource professionals are responsible for ensuring businesses can compete for and retain the best talent. But they are also there to protect their businesses from risk.

Identifying and managing the various risks associated with hiring and employing people in 2024 is an increasingly complex and important challenge. From employee benefits and workplace safety to discrimination and cybersecurity, your HR manager needs a deep understanding of a broad range of issues that could potentially cause financial and reputational harm.

In this article, we've assembled our HR compliance checklist for 2024 to help HR teams stay across common and emerging risks.

HR compliance checklist for 2024

Staying compliant with state and federal employment law is no easy task. The Department of Labor alone enforces more than 180 laws that apply to workplaces, covering everything from pay and working hours to employee benefits and workplace health and safety.

It's also important to remember that part of the challenge for HR professionals is to understand which employment laws apply to their businesses and how those laws should be interpreted. HR compliance is not one-size-fits-all.

However, there are some essential elements that all HR professionals need to know in 2024. Here are six questions you can ask to help keep your business compliant: 

1. Which employee benefits are legally mandated?

As HR teams look for new ways to attract and retain the best people, they often focus on employee health and benefits programs. But employee health and benefits are not just about developing innovative, tailored programs that can help set your business apart from the competition.

Some employee benefits—such as unemployment insurance; Social Security and Medicare; and workers’ compensation insurance—are federally mandated. And with the statutory compliance landscape constantly changing, even seasoned HR professionals need external support.

At Marsh McLennan Agency, we offer dedicated compliance support for employee health and welfare plans. This includes proactive compliance assessments of existing frameworks to help businesses identify gaps and risk areas.

2. How secure is your employee data?

The HR department handles a lot of sensitive information about employees. From their contact and financial information to details about their health and medical conditions. Securing this data should be part of all HR compliance checklists.

There's a significant risk for businesses—in terms of regulatory penalties and loss of faith from employees—if personal data is compromised. This could be through mishandling or ineffective HR policies and workflows. Or it could be through a malicious hack.

Cybersecurity is not just about protecting customer information. In September 2023, there was a high-profile cyberattack on Air Canada, which specifically targeted the airline’s employee data. Just like customers’ personal data, employee data is potentially useful to hackers to sell or hold for ransom.

3. When was your employee handbook last updated?

HR professionals have to understand a complex and ever-changing legal and regulatory environment. They have to develop and maintain rules and processes to ensure the business remains compliant. And they have to communicate those rules and processes to their employees.

The employee handbook is a vital tool for consolidating key information and making sure employees have easy access to it.

A big risk for HR teams is that employee handbooks become outdated. As legislation changes—or the business changes, meaning it has new legal obligations—the employee handbook needs to keep pace. If employees and managers are relying on inaccurate guidance there could be significant exposure for the business.

Updating the employee handbook and communicating those updates represents a good opportunity for HR departments. Updates serve as a reminder that the employee handbook exists and that it should be regularly consulted.

Employee handbooks have significant value beyond legal compliance. They provide an opportunity for HR teams to communicate their broader HR policies and the values of the business to staff and form an important part of reinforcing the employer brand.

4. Have you future-proofed your DE&I policies?

HR departments will have seen a much greater focus on diversity, equity, and inclusion (DE&I) in recent years. But this is an area where state and federal law is often behind the curve when it comes to the needs and expectations of employees.

“Today’s workforce has never been more diverse, dispersed, or distracted,” said Lauren Trost, Employee Health & Benefits Project Leader at Marsh McLennan Agency. “There are five generations in the workplace now. We have more hybrid and remote work and everyone is receiving a near-constant stream of communication.”

It is against this backdrop that HR teams are trying to ensure that the benefits they offer and the policies they put in place are not only compliant with the law but also relevant to their people.

The challenge is to look beyond what is legally required now and listen to what employees need. For example, taking a more personal approach to employee benefits so that each employee can tailor their plans to suit their particular circumstances.

“The makeup of the American family looks very different today than it did several decades ago but federal legislation hasn’t really kept pace with this changing reality,” said Lauren Randall, Benefits Consultant at Marsh McLennan Agency. “Whether it’s coverage to support the LGBT+ community or even looking at offering pet insurance for our furry friends we encourage employers to take a hard look at their policies to determine what tweaks they can make to meet the needs of today’s employees.”

This work not only makes employee benefits more valuable to employees, but it also prepares businesses for potential changes in legal requirements down the road.

5. Is your performance feedback supporting staff retention?

Performance management is another good example of an HR practice that's become more complex in recent years. Employers have had to adapt first to COVID-19 and now to employee expectations  around flexibility and remote working.

But performance management remains an essential part of retaining talent. A recent survey by Textio, an HR technology business, found that 40% of people who received low-quality feedback planned to leave their organization in the next 12 months. This compared to 22% of people who received high-quality feedback.

The same survey also revealed that women and people of color were more likely to receive lower-quality feedback than white men and were therefore more likely to want to move on from their current employer.

There is a great opportunity here for HR teams as they audit their policies and practices. Finding ways to provide fair, useful, and actionable performance feedback can not only stop the best people from leaving, but it can also help them deliver even more value for the business.

6. Do you have robust processes for checking the right to work in the US?

The hiring process is fraught with risk—from discriminatory language in job postings and non-compliant interview questions to the misclassification of employees and personal data breaches.

When it comes to the administration of new hires, one of the biggest risks is incomplete or inaccurate documentation setting out the employee’s right to work in the U.S. Employers are required to fill out a Form I-9 for every person they hire. This applies to citizens and non-citizens.

Immigration and Customs Enforcement (ICE) has increased the number of audits to identify cases of non-compliance. Employers who fail to put robust processes in place for gathering and checking the necessary documentation run the risk of significant penalties.

Key legislation for HR teams

State legislation that is relevant to HR teams varies across the country. But here are the key federal laws that HR managers need to be familiar with in 2024:

Affordable Care Act: introduced new regulations and penalties related to health benefits. A key concern for HR teams when it comes to Affordable Care Act compliance is maintaining accurate data about their employees as there are strict requirements around tracking and monitoring.

Employee Retirement Income Security Act: applies to employers who offer pension or welfare benefit plans and includes various fiduciary, disclosure, and reporting obligations.

Fair Labor Standards Act: enforces the federal minimum wage and sets basic standards for wages, overtime, recordkeeping, and youth employment.

Family and Medical Leave Act: requires employers with more than 50 staff to provide unpaid parental, sickness and carers leave.

Occupational Safety and Health Act: places obligations on employers to provide safe working environments for their staff. Administered through the Occupational Safety and Health Administration (OSHA).

Worker Adjustment and Retraining Notification Act: applies to organizations with more than 100 employees that are planning to lay off 50 people or more at a single site. The WARN Act requires employers to give advance notice of mass layoffs and also provides assistance for employees.

How Marsh McLennan Agency can help

Administration of employee health and benefits is a key part of any HR compliance checklist. Busy internal HR teams may often lack the time and resources they need to stay across ever-changing regulatory requirements and to fully leverage their health and benefits programs.

Marsh McLennan Agency has the experience, strategies and technology to partner with you to keep your talent strategy competitive and compelling. Learn more about our employee health and benefit services.