HR Compliance: As Clear as Alphabet Soup
By Chris PetersonFirst published Updated
The short answer
Employment law is an alphabet soup of federal rules, including the ACA, ADA, ADEA, FLSA, FMLA, ERISA, OSHA and Title VII, plus state and local laws. As co-employer, a PEO tracks the rules, recommends policies, trains managers and keeps records, which lowers your legal risk; your business still owns compliance in the end.
It started with Franklin D. Roosevelt's New Deal. FDR created dozens of agencies to fight the Great Depression, all known by abbreviations and acronyms, an “alphabet soup” of federal offices.
Governments have kept the tradition going. Employment law today reads like a jumbled bowl of it: ADA, EEOC, FMLA, ERISA, FLSA, ACA, OSHA. It practically takes a law degree to keep up.
Why is HR compliance so hard for small businesses?
There's a lot of it, it keeps changing, and small companies rarely have someone whose whole job is tracking it. No wonder owners struggle to know the current requirements, keep up with reporting and still run the business.
What does non-compliance cost?
The financial risk is high. Fines and penalties add up, and a single employee lawsuit can put a small business under. Small and mid-sized companies that don't manage the rules proactively are at a real disadvantage.
How does a PEO help with HR compliance?
As your co-employer, a PEO tracks the latest state and federal requirements and keeps the records that give you an audit trail, which lowers your legal risk. Keeping clients compliant is the PEO's full-time job. It recommends policies and procedures, trains supervisors and employees, and helps with employee claims, litigation responses and communication with regulatory agencies. Your business is still responsible for compliance in the end; the PEO gives you the expertise to get it right.
Which employment laws does a PEO help you manage?
In alphabetical order, of course:
- ACA: Affordable Care Act
- ADA: Americans with Disabilities Act
- ADEA: Age Discrimination in Employment Act
- CCPA: Consumer Credit Protection Act (wage garnishments)
- DFWA: Drug-Free Workplace Act
- EEO: Equal Employment Opportunity laws
- ERISA: Employee Retirement Income Security Act
- FLSA: Fair Labor Standards Act (wage and hour rules)
- FMLA: Family and Medical Leave Act
- GINA: Genetic Information Nondiscrimination Act
- OSHA: Occupational Safety and Health Act
- Title VII of the Civil Rights Act