How to Manage HR Compliance and Avoid Legal Risks: 5 Ways

In 2024, 110 lawsuits were filed to challenge unlawful employment discrimination. On average, that’s over two cases a week—and discrimination is just one of many areas of HR compliance.

There are many more, including equal pay, workplace safety, and privacy laws. It’s essential that businesses stay well-informed and proactive to ensure they’re providing all workers with a safe and healthy working environment.

Compliance is one of the most critical functions that human resources professionals provide. Failure to meet the necessary compliance laws and HR procedures can not only put employees at risk, but also seriously affect your business and its reputation.

Read on to learn more about compliance and ways to shore up your internal processes to avoid the legal risks and consequences of non-compliance. It’ll also help you ensure you are an equal opportunity employer.

What is HR compliance?

HR compliance refers to the laws, regulations, and best practices that keep your employees safe from discrimination, harassment, mistreatment, and disparate treatment at work. It includes a wide range of topics, including (but not limited to):

• Workplace discrimination
• Wages and hours protections
• Health insurance and other benefits
• International hiring, visa, and immigration laws
• Workplace safety
• Diversity and inclusion in the workplace

It's up to HR professionals to lead the way in compliance training to ensure that all managers and employees understand their responsibilities and follow the correct procedures.

HR compliance regulations you need to know

Employment laws and regulations vary at federal, state, and local levels. You’ll want to make sure your HR team is familiar with common regulations protecting employees and relevant legislation.

A few of the most common HR compliance laws and regulations regarding employees’ work hours, benefits, and working conditions include:

• Occupational Safety and Health Act (OSHA), sets and enforces strict standards to ensure safe and healthy working conditions for all employees.
• Equal Pay Act (EPA) states that equal pay for equal work should be provided regardless of gender.
• Affordable Care Act (ACA) requires businesses to provide employees with access to affordable health insurance. It also supports innovation in medical care delivery designed to reduce the costs of general healthcare.
• Fair Labor Standards Act (FLSA) sets minimum wage, overtime pay, recordkeeping, and child labor standards for full-time and part-time workers. This applies to the private sector and federal, state, and local governments.
• Family Medical Leave Act (FMLA) provides eligible employees with unpaid, job-protected leave for specified medical and family reasons.
• Immigration Reform and Control Act (IRCA) prohibits employers from knowingly hiring unauthorized workers. It also forbids unfair immigration-related employment practices, and rules against fraud and misuse of immigration-related documents.
• Title VII of the Civil Rights Act of 1964 safeguards staff from discrimination based on race, color, religion, national origin, gender, or sexual orientation, including sexual harassment.
• The Pregnancy Discrimination Act protects workers against pregnancy-based discrimination, as well as discriminatory treatment associated with childbirth or related medical conditions.
• Title I of the Americans with Disabilities Act of 1990 (ADA) protects employees from discrimination based on disability status.
• The Age Discrimination in Employment Act of 1967 (ADEA) protects employees from ageism—discrimination based on their age.
• The Genetic Information Non-discrimination Act of 2008 (GINA) protects staff from discrimination related to their genetic information or family medical history.

What are the legal risks and consequences of non-compliance?

From wage discrimination lawsuits to PTO and benefits errors, the consequences of HR non-compliance can be incredibly costly, as well as damaging to a company’s reputation. We’ve broken down some of the most common consequences:

• Lawsuits and legal claims: Non-compliance can lead to costly lawsuits. Common examples include wage discrimination claims, wrongful termination suits, and harassment complaints. This can result in significant damage to a business’ reputation.
• Penalties and fines: Many businesses have faced penalties for non-compliance. For example, in March 2025, Google had to settle a $28 million racial bias class-action lawsuit. Hefty fines like these can make a big hit on a company’s financial health.
• Damage to reputation: Even an accusation of HR non-compliance can be damaging to a company’s reputation. It can lead to public scrutiny and cause a business to be viewed negatively by customers, clients, partners, and prospective employees.
• Low employee morale: All employees want to work in an environment they trust and feel safe in. Instances of non-compliance can affect this and cause employees to have lower morale while working, which can affect their productivity. Non-compliant workplaces can also face higher turnover rates.

5 tips for managing HR regulations and compliance in your organization

Here are five ways you can ensure HR regulations and compliance are at the front-and-center of your business processes:

1. Invest in HR compliance software

Keeping up with ever-changing regulations is only the first step. To help, we recommend investing in the right HR compliance software. As government and industry regulations evolve, technology can help you streamline and automate compliance processes.

When HR professionals don't have to manage cluttered spreadsheets or chase down updated employee information, they can focus on what matters.

Looking for an easier way to manage HR compliance? Keeping employee records in BambooHR can help. Instead of managing scattered spreadsheets and wasting hours on data entry, the software brings all your employee data into one centralized, searchable database.

You can see everything from payroll information to licensing requirements at a glance, ensuring you're always on top of HR compliance issues.

2. Create HR compliance checklists

If you can’t pinpoint why employees don’t follow procedures, the reason might be that they don't know how. HR compliance checklists solve this problem by making action items visible and easy to understand.

For example, BambooHR makes it easy for new hires to see what paperwork they should complete. Your HR team won't have to spend hours chasing signatures, because our software sends automatic reminders until tasks are checked off and approved.

When HR procedures are written down in a way that’s easy to understand and easily accessible for every employee, you create a consistent reminder that removes the opportunity for excuses.

3. Provide employees with HR compliance training

If employees perceive your procedures as unnecessary to their “real” responsibilities, they won’t take them seriously. That’s why it’s essential to frame required HR compliance trianings as opportunities.

HR professionals can mitigate risks by leading regular training sessions. Ensure managers—and, when relevant, individual employees—know why you have these rules and why adhering to them is an important part of their job.

Some recommended employee trainings include:

• Sexual harassment
• Non-discrimination and anti-retaliation
• Data safety and phishing prevention

How often should you review your HR compliance training?

It’s typically recommended that you review your HR compliance training at least once a year to ensure it complies with the latest legal regulations and industry standards. From there, you should conduct any necessary updates to ensure that everything is up to date and compliant. Regular reviews will help to keep your company in good standing with HR compliance law, reduce legal risks, and keep your workforce safe.

4. Meet HR compliance goals through rewards

According to Forbes, making compliance training engaging is the key to overcoming HR compliance fatigue amongst employees. Rewarding or recognizing compliance training completion can make things even more engaging for your employees.

For example, do a quick quiz at the end of training and offer a gift card or prizes for everyone who scores 100%, or set a company-wide goal and celebrate together when you hit your mark.

5. Audit your existing policies

Non-compliance is a huge financial risk. As federal, state, and local guidelines can change from year to year, you should be completing an annual, organization-wide compliance audit.

An HR compliance audit typically feature two key parts:

• An examination of the organization's HR practices, policies, and processes
• An evaluation of existing HR numbers like unfilled positions, turnover, employee satisfaction, etc.

Common compliance issues that may come up in an internal audit include:

• Discrimination and harassment
• Wage, hour and payroll compliance
• Family and Medical Leave Act (FMLA) compliance
• Immigration compliance
• Record-keeping and documentation

Whether you’re conducting a regulatory, strategic, specific, or comparative HR audit, the goal is to improve your HR department and processes to stay compliant and keep things running smoothly.

Keep on top of employee records

HR compliance can be demanding. The good news is you don’t have to manage it alone. We can help you collect and maintain your employee records in a single, secure system.

Create peace of mind knowing your employee records are in order, and focus on building people instead of processes and spreadsheets. Stay ahead of HR compliance issues and make managing staff data easy with BambooHR^®.