This article originally appeared in the March/April issue of Startups Magazine. Click here to subscribe

By Kirsten Wright, Head of Global HR Solutions, activpayroll

What’s more, if your business is expanding outside the UK, with each new location there will be even more laws and regulations for teams to navigate - plus, these legislations are often documented in native languages, creating yet another obstacle to overcome.

It goes without saying that neglecting HR and employment compliance can have disastrous consequences. Which leads to the question, what is the solution for expanding enterprises that are struggling with international compliance?

Whilst on-the-ground support is always the best scenario, it might not be the most viable option for your business, especially if it is experiencing a period of rapid expansion. That’s where HR outsourcing comes in, offering support for those with team members based in multiple locations, both nationally and internationally.

HR compliance - what is it?

HR compliance is a commitment by an organisation to follow the working standards and employment laws that are set out in a certain city, state, or country. It involves ensuring that employees understand and comply with these laws throughout their time in employment, and entails staying up to date with any changes to employment laws as they occur.

For expanding businesses, managing employees in different locations in accordance with these different laws can be challenging, and there are three different types of compliance to consider: statutory compliance, regulatory compliance, and contractual compliance.

Statutory compliance refers to the legal obligation for an organisation to be compliant, whereas regulatory compliance refers to a legal obligation issued by a regulating body. In addition, contractual compliance refers to an obligation made between the employer and employees via an employment contract.

Failure to adhere to any of these three types of compliance could ultimately result in legal implications, causing both financial and reputational damage, and in some cases, even criminal charges.

How a global provider can help ensure you are compliant

Compliance is not a one-time concern, especially for those with staff outside the UK, it needs to be revisited frequently. In fact, one of the key aspects of compliance is that it is always evolving. It is also true that some employment regulation changes are made every year regarding issues such as taxes, healthcare, employee classification, safety violations, and more.

Non-compliance with these laws can result in fines and even a possible lawsuit for organisations, so it’s pertinent to keep up with these changing rules in all the countries your business operates in. What’s more, regulators expect organisations to implement these new laws immediately, so it must be a priority within businesses.

If an organisation is going to remain compliant, it needs to be as proactive and reactive as possible to any new rules and regulations. However, with so much to think about at any one time, keeping track of such changes can be an immense challenge, especially with employees  working in multiple locations.

This is where HR outsourcing all or part of your HR activity can be game changing. Enlisting the help of a dedicated HR specialist can help ensure that businesses stay on top of these changes and continue to comply with the ever-changing employment laws and regulations.

As well as keeping up with changing rules and regulations, it’s essential that HR departments are well versed in the existing labour laws in place in each location. Each country will have its own statutory requirements, which are often detailed in the local language.

For example, expanding into Mexico means all new hires need to be registered with the Government within five days, whereas in Spain, the registration must occur before the team member’s employment begins. In Argentina, employees must sign to confirm receipt of their payslips, however, in Italy, workers must pay monthly tax returns. There are also different benefits for each country to consider, too, along with insurance, termination policies, and retirement and pension plans. All which put a lot of pressure on the staff working in these locations.

How to avoid the HR headaches

Keeping up with existing laws and ensuring that nothing gets missed on a frequent basis is a headache for even the most experienced of HR professionals. Plus, different regions and municipalities within each country will also have their own laws and tax deadlines to comply with, and again, non-compliance with such laws and deadlines can result in penalties and even legal action if not done correctly.

When it comes to compliance, understanding the law is key, however, it is also essential to ensure that employees understand and comply with these laws throughout their employment - which is why it’s beneficial to have local and cultural expertise available.

The law alone is not enough to keep national and international employees happy, and if an organisation is going to ensure its employees are satisfied and supported in their roles, it also needs to know about the local customs and practices that aren’t necessarily spelled out in the law, and this is something that is best gained through first-hand experience in a country and through listening to the employees based on the ground to best support their needs.