Employment Law Compliance Complexity: Beyond Human Capacity

When GovDocs began its humble journey in 1999 to help large U.S. employers manage their enterprise-wide employment law posting programs, it was a straightforward process – for both GovDocs research staff and our clients’ HR compliance managers.

We monitored changes to required employment law postings for federal and 50 states and made sure they were displayed in each location before the effective date. This entailed occasionally scanning online news headlines for any announcements on law changes (if you were really savvy, you used Google Alerts), making a few phone calls to government agencies for verification, updating a four-column Excel spreadsheet and then implementing the policy change throughout the company.

Easy enough.  Even the laws on the postings were straightforward. Need to be certain of a minimum wage rate for a particular location? No problem. Simply calculate it in your head using either the federal or state rate, whichever is highest.

Boy, were those the “monitor and apply the law” good old days.

Now, almost 20 years later, tracking, analyzing and applying employment law compliance across a large enterprise in a specific industry, with multiple locations, in multiple states, with a varied employee base is beginning to reach a level beyond human capacity.

If you’re in HR compliance, compensation, payroll, human capital management, legal, labor planning, store operations, employee benefits or other functional areas responsible for managing employment law compliance, your brain is unfairly tasked with following a very complicated web of variables.

Let’s look at minimum wage again to illustrate this ever-growing complexity:

The Web of Minimum Wage Compliance Variables

Not only has the rate of change to existing employment laws, like minimum wage, steadily increased over the last couple decades, the volume of net new laws and regulations has significantly increased, as well. The same can be said for paid leave, fair/predictive scheduling, ban-the-box, pay equity, pregnancy worker rights, independent contractor classification, harassment and human trafficking, to name a few. And now the most recent proposed employment law: Unplugging?

To add yet another layer of major complexity, we’ve seen local governments passing and adopting their own employment regulations at an astonishing rate, particularly with paid leave and minimum wage. From 2013 to 2017, city and county employment law postings had a 744% increase, averaging 133% per year.

The bandwidth for HR staff to manually monitor and make timely, accurate decisions on which employment laws affect and apply to a specific company location has possibly reached a tipping point. It overwhelms even the best of analytical minds, simply because of the sheer volume of today’s employment compliance variables.

At GovDocs, we call this the Wheel of Compliance Complexity.

Wheel of Compliance Complexity

As you begin to absorb this magnitude of information, you may be thinking, “So many rings … So many factors to consider …”  Whatever comes to mind, this complexity raises more questions than answers. Based on what we know today, what else does 2018 have in store? What will employment law compliance look like for large employers one, three, five years from now?  Is this trajectory going to continue? Should we expect this trend to follow a similar path as sales tax laws did over the last 25 years? What else (don’t we know)?

The GovDocs team has one final question, which will ultimately – and hopefully – answer all the others above. How can we effectively manage employment law compliance in lockstep with all this complexity?

The solution is technology – it’s obvious to us all that this current state is well beyond our previous capabilities. Time and resources, with technology, have been used again and again to solve so many other complex compliance problems in business. With this in mind, we’re compelled to broaden our scope at GovDocs, and we continue to push ourselves and our clients to see what’s possible with the application of technology.

Just maybe, with a little help from innovation, we can make employment law compliance processes straightforward once again.