Ask Alto : What are the laws and regulations HR professionals should know?

October 04, 2022
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Ask Alto

Did you know that it is illegal in South Africa to force an employee to work unpaid overtime, no matter what their contract says? That’s because the country’s labour laws are based on a progressive constitution, adopted in phases between 1993 and 1996.

For South African human resource professionals, the ins and outs of the Labour Relations Act 66 of 1995, and its 2002 amendments, are (or should be) second nature after three decades of real-life implementation.

For their counterparts in (say) the United States, the rules that apply to unpaid overtime will be different – and they will vary on federal and state levels.

And in some countries nearly every employee is a member of a trade union, while in the U.S. union membership represents a smaller percentage of the workforce.

One thing stays the same though: no matter where an HR professional is based, their fundamental responsibility is to strategically manage employees while remaining compliant with laws that govern employee rights and employer obligations.

As Northeastern University in the U.S. notes: “If an organization violates these complex and ever-changing regulations, it exposes itself to risk, including lawsuits, financial losses, and reputation damage.”

What legal areas do HR professionals need to know about?

Laws will vary from country to country, but the following will generally be in the ambit of an HR department, and will be governed in one way or another by a country’s legal system:

  • Recruitment and hiring
  • Contracts of employment and working hours
  • Statutory leave and time off
  • Payroll
  • Pensions
  • Workplace health and safety
  • Dismissing staff and redundancies
  • Covid-19 employment laws
  • Privacy laws and confidentiality considerations
  • The role of unions, works councils and collective bargaining agreements
  • Equal opportunity laws
  • Tax laws

How can HR professionals navigate all this?

The Forbes Human Resources Council has the following practical tips

1. Work on compliance during a weekly ‘power hour’. This means prioritising time for enhancing employment law knowledge – or the time can be used for developing operational and communication plans to address any compliance areas that are identified as needing to be corrected.

2. Sign up for emails or feeds from HR organizations and relevant websites – this is a great way to get information on current or impending legislation, the pros and cons and the potential impact on HR operations.

3. Proactively join regulatory forums – this way, companies get to help shape employee laws.

4. Encourage HR, legal, compliance and communications teams to share relevant information with each other to avoid any reputational or regulatory risks.

5. Update the employee handbook annually – and then have it reviewed by external counsel, who will be able to flag any legal changes that might have been missed.

6. Curate a network of diverse HR professionals across industries to illuminate blind spots and keep track of shifting trends. Trusted executive search contacts are an invaluable addition to this network as they will have up-to-date info about human-resource-related policy changes.

How does all this work for multinational companies?

If laws differ from country to country, what do multinational companies do to stay compliant, wherever they might be? They need to keep up to date with the political, social and legal changes that are happening around the world. In addition to deploying the information gathering and networking tools already mentioned, global HR professionals must understand the operational issues that affect international employment, says the Society for Human Resource Management. Strategies to address these might include:

1. Deciding who the employer is in the new country: When businesses expand into new countries – even for temporary projects – they need to decide who is going to employ any existing staff, or new workers who are sent abroad. For example, the workers could remain employees of the original company, they could be terminated and hired by a subsidiary in the host country, or they could have a dual employment arrangement.

2. Developing a strategy to hire local nationals : This could be through a local corporate presence, by using a third-party agency or by hiring independent contractors.

Above all, HR professionals need to understand that local employment laws are going to be different, and that they need to do whatever is necessary to comply with regulatory structures, wherever they are.