Congrats! You’re celebrating another amazing year as a growing business. In fact, your company has been so successful, you’re now ready to double the size of your team.
But before you start posting those awesome new job openings, you’ll need to think about the laws and regulations that impact every employer — regardless of size. These policies and protocols all feed into what’s called ‘recruitment compliance’.
If this is the first time you’re hearing this term, don’t worry. We’re about to dive into what recruitment compliance is, the core hiring compliance laws that influence it, and why you need to make it a priority as you grow.
Because the truth is, the penalties for recruitment noncompliance are steep. Violators can be on the hook for millions of dollars in fines, court-ordered awards, and serious legal fees — not to mention the damage to your employer brand.
And unlike IBM or Goldman Sachs, you probably don’t have unlimited resources and a bevy of lawyers to rescue you. So, how can you guarantee you’re compliant?
Let’s get into some of the core rules, regulations, policies and procedures that make up recruitment compliance, plus some of the tools you’ll need to help keep your business protected.
NOTE: While we always aim to provide you with the most valuable and reliable information on all things HR, we are not legal professionals. Nothing you read here should be considered legal advice. Always seek professional legal advice to keep your company compliant.
What is recruitment compliance? And what does it mean for a growing business?
Recruitment compliance is the process of attracting, hiring and retaining workers for your organization while following…
- Federal, state and local laws and regulations
- Employment policies, rules, and procedures that you set for your organization
- Best hiring business practices
The list of recruitment compliance dos and don’ts is long and navigating it can feel more than a little daunting. But the penalties for ignoring them are way worse, especially for a growing business.
The good news is, once you’ve set up the right systems and processes to help keep you compliant, you’ll have a system you can scale on. With the right process, you’ll be ready to hire with the confidence of knowing your recruitment strategy is both fair and resilient.
But first, let’s take a closer look at the key recruiting and hiring compliance areas that will help shape your recruitment strategy and keep your company compliant as it grows.
The recruiting and hiring compliance laws to know
Believe it or not, there’s a law or regulation for nearly every employment-related activity — from how you hire, manage, and pay workers to how you treat, protect and even terminate them.
Although most mandates cover employees as opposed to job applicants or candidates, it pays to know what they are before hiring in order to prevent any unpleasant surprises later.
This is especially crucial because employment laws and regulations are shifting all the time. You’ll need to keep up with the changes and stay on top of which mandates apply to your business based on size.
For example, Title VII of the 1964 Civil Rights Act applies only to businesses with 15 or more employees.
But of course, the list doesn’t stop there. Let’s break down some of the core recruitment compliance laws, regulations, and guidelines to help you stay ready.
Title VII prohibits employers from discriminating against workers and job applicants based on gender, race, ethnicity, age, disability, religion, sexual orientation and gender identity.
Within the umbrella of anti-discrimination laws, you’ll find the Americans with Disabilities Act (ADA), Age Discrimination in Employment Act (ADEA), Equal Pay Act, (EPA) and Pregnancy Discrimination Act (PDA). While this isn’t an exhaustive list, these are some of the core laws aimed at preventing discrimination in the hiring and treatment of workers.
As a growing company, it’s definitely a good idea to get familiar with these laws and consider the key ways they may relate to your recruitment and hiring strategy.
Typically, the two recruitment practices that could equal noncompliance in this area are:
- Job ads: If your internet job posting calls for someone who can “lift 25 pounds” but weight-lifting isn’t an essential function of the job, you may be discriminating against applicants with disabilities under the ADA.
- Interview questions. Questions should focus only on a candidate’s skills, experience and credentials as they relate to the job. Illegal inquiries focus on personal issues that are unrelated to the candidate’s ability to do the job, like ethnicity, political affiliation, parental status, and religious beliefs.
Clearly, this is not an area where employers can cut corners. The US Equal Employment Opportunity Commission (EEOC) is firm about enforcing anti-discrimination laws.
In 2020, the agency collected $439.2 million in monetary benefits for victims of discrimination. But in a worst case scenario, the EEOC also offers a free, voluntary mediation program to help resolve disputes and settle claims between workers and employers.
The Fair Labor Standards Act (FLSA)
The FLSA is another law to know. It protects workers against unfair employment practices, requires employers to pay employees for the number of hours they put in, and keep and submit records of hourly workers’ time. It also specifies when workers are considered on or off “the clock” vs. when you must pay them overtime.
The law classifies workers as either exempt (salaried) or nonexempt (hourly) based on job duties. This means your job descriptions will determine whether the person you hire will be an exempt or nonexempt employee.
When it comes to your recruitment strategy, it’s important to clearly think through, outline, and document your expectations around pay and hourly breakdown as it relates to both salaried and hourly roles. You’ll also want to be sure these things are clearly laid out in your job descriptions.
It’s no secret that the benefits you offer can make a big impact on the number of quality candidates you’re able to attract, especially when it comes to healthcare.
If you decide to offer employees medical coverage, you’ll need to know what the federal standards are under the Affordable Care Act (ACA), Consolidated Omnibus Budget Reconciliation Act (COBRA) which extends healthcare coverage to terminated workers, and Health Insurance Portability and Accountability Act (HIPAA) which protects workers’ medical information.
Thankfully, this is another area where you can find resources and support for growing businesses. For example, the ACA offers the Small Business Health Options Program for companies with 1 to 50 full-time or full-time equivalent (FTE) workers.
The Immigration Reform and Control Act (IRCA)
This one is relatively straightforward.
All US employers must complete Form I-9, which verifies the identity and employability of every worker they hire, both residents and nonresidents.
Minimum wage requirements
Federal minimum wage requirements state that employers must offer applicants at least the federal minimum wage, which currently is $7.25 an hour — or the minimum wage in your state or other locality, which will be the same or above the federal rate.
This is one area to watch as there are currently a number of changes occurring at the state level that can impact the way you structure your compensation.
The Occupational Safety and Health Administration (OSHA)
OSHA is the agency that oversees the laws and regulations that require employers to maintain a safe and healthy work environment.
The way you implement OSHA regulations can vary greatly depending on your business. For example, a dental office and a child care facility are going to have very different sets of requirements for how they keep their employees compliant.
This list of employer responsibilities can help you get a better idea of the specific guidelines that may be required for your business. When it comes to your recruiting strategy, you’ll want to make sure you let applicants know if there are any OSHA certifications required as part of the role.
The Office of Federal Contract Compliance Programs (OFCCP)
The US Department of Labor (DOL) is responsible for ensuring that the employers who do business with the federal government comply with EEOC anti-discrimination laws.
This is based on the idea that employment opportunities generated by federal dollars should be fairly and equitably open to all US workers.
If your company is a US government contractor, you’ll want to check out our free OFCCP Compliance Checklist to make sure you’re ready for your next audit.
Equal Employment Opportunity or EEO-1 Report
Also known as Standard Form 100 or the EEOC/OFCCP report, this document segments a company’s workforce by gender and race.
Employers who meet the following criteria must submit the report annually to the EEO-1 Joint Reporting Committee:
- Employ 50 or more workers
- Are a prime contractor or first-tier subcontractor
- Have a contract, subcontract, or purchase order amounting to $50,000 or more
- Serve as a depository of government funds in any amount or is a financial institution that is an issuing and paying agent for US Savings Bonds and Notes
With the right applicant tracking system in place, it can be surprisingly easy to collect this information.
In Breezy, employers can collect EEOC/OFCCP compliance data by enabling the feature in your Company Settings.
All you need to do is:
- Click the gear icon ⚙️ in the left sidebar.
- Click Company Settings.
- Click General in the left sidebar.
- Scroll to EEOC Compliance.
- Toggle the options to enable or disable features.
Don’t forget about state and local recruiting laws
Even if you feel you’ve got your federal bases covered, it’s important to remember that in many cases, states and municipalities have their own employment laws. In the US, these laws must meet at least the federal government’s thresholds — but that doesn’t mean they can’t go beyond them.
Remember those changes we mentioned with state-level minimum wages? That’s a perfect example of states choosing to implement employment laws that go beyond the federal threshold.
Two more examples include:
- The “pay history ban” which forbids interview questions about applicants’ past earnings. The aim with this one is to end pay discrimination against women, who on average, earn 93 cents on every dollar compared to men in similar jobs.
- “Ban the box” which eliminates questions about felony convictions on job applications to prevent employers from eliminating qualified applicants with criminal backgrounds.
When preparing your company to stay fully compliant with recruitment and hiring laws, always check with your local labor department for information on any state or local laws that may apply to your business.
The privacy and security protocols that protect candidates
Now that we’ve covered the core federal laws that influence both hiring and recruiting, let’s take a minute to zoom in on the data privacy and security laws that have a direct impact on the way companies recruit.
The first thing to know is that a major part of recruitment compliance is protecting candidate data and, by association, boosting the candidate experience.
With data breaches on the rise, there is an increasing amount of pressure on employers to make sure the information you collect on candidates is as secure as possible.
Here are some of the most important protocols to stay on top of.
Breaches are more common than ever, putting candidates’ data at a greater risk.
And with a rise in breaches comes an increase in damage costs. In fact, IBM’s 2021 Cost of a Data Breach Report shows that this cost rose from $3.86 million to $4.24 million, the highest rise since they began publishing the report.
General Data Protection Regulation (GDPR)
This protocol streamlines and strengthens European Union (EU) privacy laws by giving people more control over how their data is stored. The EU drafted and passed the law in 2018, but its reach is global.
GDPR has explicit candidate-focused protections that include:
- Candidate Consent – the candidates’ ok to use their data in the recruiting process.
- Candidate Right to Access – the candidates’ right to receive a copy of the data you’ve collected on them.
- Candidate’s Right to Erasure – employers are required to delete data on candidates that they no longer need, with or without their consent.
- Privacy Notice – your official notice to the candidate on how you’ll collect and use their information.
As with EEOC/OFCCP guidelines, GDPR is an area where the right recruitment platform can help you stay compliant.
With GDPR features enabled, Breezy provides all of the above protections and lets users choose whether to require it for all individual positions and candidate pools, or only for positions in the EU.
If you’re already a Breezy user, it’s super simple to enable GDPR features:
- Click the gear icon ⚙️ in the left sidebar.
- Click Company Settings.
- Click General in the left sidebar.
- Scroll to GDPR Compliance.
- Click Enabled to enable the features.
- Click the gear icon ⚙️ to enable or disable specific features.
Candidate data should not only be secure but also shared seamlessly between human resource information systems (HRIS), human capital management (HCM) systems and any other platforms you’re using in the recruiting and hiring process.
This includes sharing and storing data on third-party or vendor platforms. By using an HR tech stack that is well-integrated, you can help ensure security and system compatibility and reduce the risk of exposing your candidates’ data.
Inquiries into candidates’ backgrounds verify who they are based on the information they give you.
But thorough background checks can protect your business from harm or liability by uncovering information about candidates’ history or behavior that may make them unsuitable for the job.
If your company operates in an area where your employees’ backgrounds could put you at risk, make sure you have a well-structured background check process in place and that you’ve made it clear in your job ad that this is a requirement for the role.
Better recruitment compliance is better business
While it’s certainly not the sexiest task on your to-do list, taking the time to structure and audit your recruitment and hiring processes to make sure your company is on the right side of recruitment laws is crucial.
And as a major bonus, taking action on recruitment compliance will help elevate the candidate experience as a natural byproduct. Because modern employees are actively seeking companies that don’t just talk about it, but take tangible steps to show they care about the people who make up their organizations.
So take the right actions to stay on track with recruitment and hiring compliance, and watch the talent roll in as you progress.
When you’re ready to upgrade your recruitment processes, Breezy is here to help. Our simple to use compliance features can help keep your company protected, while providing an awesome experience for applicants and candidates. See for yourself with a free 14-day trial.