HRM Functions and Compliance Issues Essay

Excerpt from Essay :

Compliance and the HR Functions

Human Resource function is an important aspect for nearly all organizations regardless of whether they are small or medium-sized organizations with 20-100 and 100-500 employees. The significance of this function is shown by statistics associated with effective management and constant organizational growth. Companies usually make costly mistakes that are preventable due to lack of HR professional guidance from internal HR professionals and outside HR consultant. Some of these costly mistakes arise from relatively common employment-related issues, which have significant impact on organizational efficiency, productivity, sales and revenues, effectiveness, and decreased profitability. The other factors that contribute to costly mistakes in human resource are compliance issues related to some legal requirements. Some regulations with HRM compliance issues include Employment at Will, Fair Credit Reporting Act, Genetic Information Nondiscrimination Act, Immigration Reform and Control Act, and Uniformed Services Employment and Reemployment Rights Act.

Compliance Issues with Various Laws:

One of the major regulations that govern human resource management is the doctrine of employment at will which allows an employer to fire an employee at any time with or without cause, reason or notice when an employment contract does not exist between the parties. This doctrine was established on the premise that if workers could resign or quit with or without notice, reason/cause, and liability, employers should be allowed to discharge employees on the same grounds (Perkins, 2011). Therefore, an employment relationship can be concluded at impulsively or at the will of any party with or without notice, reason or cause, and liability of the other party.

While the regulation does not affect any of the major functions of human resource management, it has a significant effect on employee retention. Generally, employers are required to develop and implement employee retention strategies that make employees feel valued and engaged in relations to their contribution in the organization. In order to develop and establish effective strategies, employers need to listen to the needs of employees and comply with necessary regulations. However, the doctrine of Employment at Will is has some compliance issues associated with its alignment with other laws. These issues emerge from the fact that there are some regulations that limit or restrict the application of employment at will.

An example of a real-life situation involving the doctrine of employment at will was the wrongful termination case of Paul Blakeslee from Shaw Environment and Infrastructure in 2008. Blakeslee was terminated without notice after reporting fraud involving the provision of equipment to the firm without competitive bidding (Schaefer, 2012). While the employer had the right to terminate Blakeslee, such action could not be taken in discriminatory and retaliatory illegal manner due to the need to comply with other employment laws.

Genetic Information Nondiscrimination Act supplements the Equal Employment Opportunity Act by forbidding genetic information discrimination in employment. In this case, Genetic Information should not be used in making employment decisions, limits employers from asking, requiring and buying genetic information, and strictly restricts the disclosure of this information ("Genetic Information Discrimination," n.d.). The enactment of this legislation is based on the premise that genetic information is not relevant to a person's current ability to work and should not influence any employment decision.

This law has significant on nearly every major human resource management function because it prohibits the use of genetic information in any aspect of employment such as hiring, firing, promotions, training, and development, layoffs, compensation and benefits, and other employment terms and conditions. An employer should not harass a job applicant or employee or retaliate on the basis of the individual's genetic information.

Compliance issues associated with Genetic Information Nondiscrimination Act emerge from the narrow exceptions of the law. Some of these exceptions include inadvertent acquisitions of the information, acquisition of family medical history, obtaining the information through commercially available documents, some DNA testing, and acquisition through genetic monitoring program. An example of difficulties in compliance with this law is the recent case at Fabricut, Inc. when it requested for the family medical history of a female job applicant in the firm's post-offer medical examination ("Fabricut to Pay," 2013). This case demonstrated the difficulties in understanding and complying with exceptions in this law.

Fair Credit Reporting Act prohibits the use of "consumer report" in making adverse employment decisions regarding an applicant or an employee. However, such information can be used for decision making if the applicant or employee is aware of the information and given the opportunity to correct the information. Consumer reports are basically described as background checks or investigations of applicants or employees. Therefore, the law controls the collection, distribution, and use of consumer reports including credit-related information.

The major human resource management functions affected by this legislation are recruitment and selection. These functions are affected on the basis of the use of consumer reports as important sources of information in making hiring decisions. While employers can conduct background checks or investigations to make appropriate recruitment and hiring decisions, the extent with which such information can be distributed is seemingly uncertain. The law does not have clarity regarding the degree that consumer reports can be distributed, which results in compliance issues. For instance, Certegy Check Services, Inc. was forced to pay a huge amount of money for allegedly failing to follow reasonable procedures to ensure that information provided to its merchant clients was accurate as required by the law. The lawsuit was part of wider initiatives by to target data brokers who collect, maintain, and sell sensitive consumer information since they basically compile consumers' personal information.

Immigration Reform and Control Act is federal law in the United States that requires companies to employ only individuals legally eligible to work in the country. In this case, a firm can only employ people who are either American citizens or foreigners with necessary authorization. Therefore, companies that recruits or continues to hire individuals without necessary authorization to work in the United States may be liable for punishment.

Since the regulation is geared towards controlling illegal immigration through removing employment opportunity as a benefit for unauthorized people to access the country, it has a significant impact on the recruitment and selection decisions in human resource management. Compliances issues with the law emerge from the fact that it seemingly contradicts the Equal Employment Opportunity Act that prohibits discrimination on the basis of national origin. In essence, the law seems to promote discrimination based on national origin when making recruitment and selection decisions. The difficulties in compliance with the law has forced National PEO, a human resource and payroll outsourcing company, to develop a program to help many companies comply with immigration regulations ("Companies Struggle," 2007).

The final employment law associated with some compliance issues is the Uniformed Services Employment and Reemployment Rights Act, which safeguards civilian job rights and benefits for members of the active and veterans and Reserve components of America's armed forces. The regulation requires returning service-members to be promptly re-employed in the same position they would have obtained if they were not absent for military service under the same seniority, pay, position, and other rights and benefits associated with the status ("USERRA Information," n.d.).

Similar to the other regulations, this law has considerable effects on recruitment and selection decisions given the increase in allegations of discrimination based on previous, present, and future military status or service. The main impact of this law on these human resource management functions is the need for employers to follow certain procedures with regards to reinstatement into civilian jobs after military service. The failure by an employer to comply with the law contributes to a lawsuit for infringement of employment or reemployment rights. In most cases, the employee would feel entitled to be employed or reemployed, which makes employers to lose some control regarding important employment decisions. An example of compliance issue in this…

Cite This Essay:

"HRM Functions And Compliance Issues" (2014, May 09) Retrieved January 23, 2018, from

"HRM Functions And Compliance Issues" 09 May 2014. Web.23 January. 2018. <>

"HRM Functions And Compliance Issues", 09 May 2014, Accessed.23 January. 2018,