HR Functions and Compliance Process

Compliance and the HR Functions

Reviewing the laws and Identification of two HRM compliance issues

Organizations as few as 14 employees are required to comply with at least 15 federal labor laws as well as some local and state laws. However, organizations that have at least 50 employees can be subject to 20 federal labor laws. Management of some small employees may believe that labor laws only pertain to large organizations, however, all small, medium and large organizations are required to comply with federal labor laws that affect them. Compliance of labor laws is very critical for effective human resources management (HRM). HRM compliance is the process where organizations are required to respect the federal labor laws during recruiting, selection, promotion and compensation of employee. (KPMG, 2013).

GINA (Genetic Information Non-discrimination Act) is one of the labor laws that organizations are required to comply to protect employees from genetic discrimination of employment and health insurance. (National Library of Medicine, 2014).Typically, employers are required to comply with the GINA Act to abide to the federal labor law. Under the labor law, genetic discrimination occurs when an employer treats employees or applicants differently based on their genetic change that can increase risks of an inherited disorder. In the United States, GINA Act is a federal labor law designed to protect employees and applicants from all form of genetic discriminations. Essentially, employers are required to comply with GINA Act to avoid the risks of prosecution. The law comes into effect on May 21, 2009, and the Title II under the GINA Act prohibits employers to implement genetic discrimination within an employment environment. Moreover, it is illegal for employers to use genetic information of an employee when making decision regarding promotion, hiring and other employment terms.

Consumer report is another issue that focuses on HRM compliance. Employers can use consumer report to make an employment decision, however, when employer decides to use a consumer report to make a decision regarding hiring, promotion, reassignment and retention, an employer must comply with the FCRA (Fair Credit Reporting Act). The FCRA states that employers should inform an applicant or employee that they could use a consumer report to make an employment decision. The notice should be in writing and stand-alone format. Additionally, employers must get a written permission from an applicant or employee before carrying out a consumer report on an applicant or employee. Failure of employers to inform employee is non-compliance with FCRA regulation. Part of FCRA regulation is that employers should not discriminate against an employee or applicant based on the information collected. Moreover, employers should refrain from misusing the information collected. (Bureau of Consumer Protection, 2014). Typically, employers are required to comply with the regulations discussed above to carry out effective HRM compliance.

HRM functions that might be affected by FCRA and GINA

Although both the GINA and FCRA stipulate that employers should not discriminate against an employee or applicant based on the information collected, however, it is very difficult to rule out completely that employers may not discriminate against employees or applicants based on the information collected. Typically, some positions within an organization is very sensitive which could force employers to base their hiring or selection decision based on the information collected on an employee or applicant. For example, many primary schools in the United States will need to carry out a background check on primary school teacher applicants before making a selection decision on applicant. It will be very difficult for primary school employers to select an applicant who has a past record of child abuse. Thus, information collected on a particular applicant in this issue can affect HRM functions on the selection and recruitment of primary school teachers.

Moreover, increasing number of financial institutions is using information from a consumer report to make a selection and recruitment decision. For example, it will be very difficult for a bank or financial institution to select or hire an applicant who has a record of financial frauds.

Moreover, it is very difficult to make employers to abide completely to GINA rules and regulation. For example, characteristics of some positions could mandate employers to fill the job positions with only individuals with imposing personalities. Robbins & Judge (2009) argue that disallowing employers to select employees based on their genetic traits might make employers to punish employee for a poor performance. A company looking for an individual for leadership position might use several criteria for selecting potential candidates for the position which include genetic information of the candidate even if they do not state they want to use the genetic information for the selection.

Drawing Personal Experience or Research on the HRM Compliance issues

In the contemporary business environment, organizations are increasingly using different techniques to hire best talents to enhance organizational performances. Apart from conducting series of tests and interviews, employers can use consumer report to collect information on employee in order to make a decision on selection and recruitment. Some years ago, when I finished my university education, I sent job applications to several organizations, and some companies accepted my applications and schedule job interviews. One of the companies scheduled the interview online, and I was asked to answer series of interview questions to determine my competence for the job. After the interview, I received a reply that I performed excellently from the interview process and the next step is to submit my SSN (Social Security Number) to run a background check on me before considering me for the position. The company got to a length explaining the reason for collecting my SSN, and part of the reasons was to collect my credit report because the job required me to manage some products that worth several millions of dollars. After several contemplations, I refused to submit my SSN, and the employer dropped me from the job position despite the comment that I performed excellently in the job interview. My conclusion was that the employer was intending to use the consumer report information to make an employment decision. Thus, it can be very difficult for some employers not basing their decision on the information collected for selection and recruitment process because of the sensitivities of some job positions.