7 HR Compliance Tech Trends in 2024

As the HR space continues to leverage the valuable assets technology affords, more inroads will become apparent. Assistance with the ever-changing landscape of legal compliance will be a must-have for HR professionals in large and small organizations.

Several areas are ripe the focus of HR Compliance software companies, as each area has the potential to offer needed solutions for departments that are struggling to do more with less.

Compliance Training

One of the most prominent trends in the HR space is the increasing demand for corporate training, especially in compliance. Almost a dozen states currently require sexual harassment and/or discrimination prevention training. Some mandate managerial staff undergo initial and follow-up training and others require all staff to participate. Other industries, like financial services, have additional training requirements.

The need for training technology is growing rapidly, with many companies requiring several forms of compliance and corporate training, at scale, and at regular intervals. HR compliance tech creators have a unique opportunity to fill this niche, but booming, market.

Recruitment Checks & Beyond

As AI continues to dominate the recruitment process, with algorithms screening candidates in or out of consideration, compliance may be at risk. New laws are emerging that require businesses to verify their systems have removed biases, ensuring the tech is in compliance with the letter as well as the spirit of civil rights laws.

In New York City, a local ordinance* requires annual audits. Illinois’ Artificial Intelligence Video Interview Act places strict requirements on businesses that leverage AI-enabled interview video analytics. At the federal level, the 2022 Artificial Intelligence and Algorithmic Fairness Initiative puts the responsibility on employers to assure software, particularly AI-based, complies with federal civil rights laws for hiring and other employment decisions.

These laws, and similar ones that will surely follow, represent a potential opportunity for compliance tech creators to assist businesses with invaluable resources.

PTO

Tracking paid time off for sick leave is a task best left to technology. Businesses can use portals for employees to report time off and track availability. These tools free up HR professionals from responding to employee questions and concerns.

When linked to compliance—with paid sick time requirements in some states, cities, and counties—access to the rules, whether or not employees are entitled to paid days off, and the ability to track the leave can be a time-saver for business and a valuable resource for staff.

Overtime

While federal guidelines for overtime pay and leave requirements have remained unchanged for years, local laws require a variety of often confusing mandates. In some states, overtime is required after 40 hours per week while in others, it’s paid for every hour after 8 in a single shift. In some states, employees must have at least one day off in seven, in others, employees can work continuously.

Compliance technology not only helps keep businesses current with the rules in their area, but can adjust wages accordingly. It can also provide the organization with notifications for potential compliance issues, such as an employee not receiving their mandated days off.

Leave Management

Federal, state, and local laws require businesses to provide leave of absence for eligible employees, but what leave is available and who is eligible may vary by jurisdiction. At minimum, eligible employees are allowed family or medical leave under the FMLA, but many states and local areas have expanded on the FMLA. In some states, bereavement leave is mandated, and at the federal level, leave is required in some instances for families of active or non-active military personnel.

For compliance tech developers, creating systems that allow businesses and their employees to understand leave requirements is just the beginning. Compliance tech can allow workers to request, enter, and track sick leave (with or without pay), freeing HR staff to work on more important tasks. This can be an invaluable tool to navigate complicated and challenging legislation.

Wage Compliance

The minimum wage has remained unchanged at the federal level for decades. However, most states and local communities have pushed for wages much higher, with more increases on the horizon. While HR professionals may try to stay current on what’s required now and what’s pending, new rules often fall through the cracks.

Payroll technology that monitors and updates systems with new wage requirements can help eliminate this burdensome task from an organization’s team members.

Employee Self-serve Portals

How often does HR receive requests to respond to employee questions about laws, their rights, and responsibilities? While these professionals may willingly interrupt their busy day to assist and advocate for their staff, often reiterating what’s already in issued employee handbooks, a trend for the coming year may be self-serve portals.

These can answer basic to complex compliance questions. They may link the staff member to the company’s own handbook or to outside sources. They could use AI to source answers for basic questions or refer the employee to get more direct assistance from internal staff. For confidential inquiries, an employee may feel more comfortable asking AI rather than a person. This tool may be the only needed step in resolving a problem or the first step in uncovering one.

Collaborative Intelligence on the Horizon

While AI is assuming many tasks in the HR space, it will not replace humans completely. You may ask tech whether or not an employee can be terminated for tardiness and receive a straight-forward answer, but a number of variables only a human would understand can make all the difference.

And while technology could respond that, if your policy allows disciplinary action, a separation is warranted, larger issues may be at play. How often is the policy followed? What are the circumstances of the employee’s infraction? Would their termination cause disparate impact? Forbes reports while technology is important, collaboration with tech is what’s needed to assure HR advocates for both the business and the employees. HR compliance tech creators will need to build AI and human input into any systems they create.

HR Compliance Tech & M&A Implications

As HR departments shrink and new laws and requirements grow, businesses will need to rely more heavily on compliance technology. The future in the HR space will expand as creators look at what’s needed today and what can be useful in the future.

These could create opportunities to possibly grow an independent compliance tech organization or make one more attractive to larger companies looking to expand their reach in the industry. For HR Tech founders leveraging any or all these trends and experiencing good growth, it might be time to consider selling into success.

This material and the opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual or entity.

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