06. Legal and Regulatory Compliance Challenges and Issues with Onboarding

 NethmeeSW

Introduction 

The labour law can be different from one country to another. It will cover the areas such as the minimum wage, employee rights, working hours, conditions of work, trade unions and industrial relations. The onboarding process should consist of a session where the employee gets an awareness of the labour law. 

The World Bank Group published a report on the topic of “Labor Regulations Throughout the World: An Overview” by Kuddo (2018). The report stated that policies should be amended for the betterment of the employees and be more flexible with the legislations. The study covered a range of countries such as Afghanistan, Morocco, Thailand, Africa, European countries, Bhutan, Sri Lanka and many more. The report concluded that general principles can be used as a country but it might not fit for all of the countries. The regulations will depend on the characteristics of social, economic, political and historical conditions. Further, it remarks that long working hours cannot be accepted as it would definitely harm the employee health. Likewise, there might be some of the regulations that are similar to many countries. 

Common Legal & Compliance Challenges and Risks

1. Financial Risk

Unsal  (2019) has conducted research on Employee relations and firm risk: Evidence from courtrooms. The findings show that the lawsuits of US publicly traded firms have a high risk of facing these allegations. The costs can lead to bankruptcy on some occasions, for example, discrimination. The arguments further extend to all the stakeholders, including employees. This financial risk has been identified as bad HR practices together with legal procedures. The final outcome of employee satisfaction can change this situation whereas the organization can mitigate the dire circumstances. 

2. CEO Turnover

Further, Unsal & Rayfield  (2019) found that there is an impact on CEO turnover from labour lawsuits. Surprisingly, it is regardless of the outcome or motivation. The paper states that employee treatment may result in direct or indirect litigation costs and thereby affect corporate governance. Legal expenses, court fees and settlement are the direct litigation costs while the bad image of the company will be in the indirect litigation.  

3. Involvement in Decision Making

According to Weiss (2022), adaptation to new conditions is a challenge in labour law. Employees nowadays have the right to get participate in decision making and a new flat structure of the hierarchy is being implemented. Workplace democracy has been promoted through the labour law which leads to the legitimacy of their contribution to making decisions. Further, isolation of the employee has been a trend due to technology and individualistic consciousness. 

4. Damaging Reputation

The US is known as the place of freedom. Anti-Discrimination Law has been executed for the LGBT crowd and makes everyone included in the workplace. According to Sears & Mallory (2014), sexual orientation or gender does not affect the performance of an employee. Discriminating the LGBT community and not providing employment for them would lead to severe damage to the organization's brand name. Valenti (2020) suggests that HR professionals should include and welcome LGBT employees in the same way they do for all other employees. The onboarding process should make them feel comfortable. It will make them feel that they fit into the organization from the first day. There will be serious issues at the courts if these employees were discriminated and it would be very difficult to build up the name of the organization in countries such as the US.

5. Corporate human rights due diligence

Multinational companies have to deal with many countries and they conduct global operations. Hence, corporate human rights have been defined by Organisation for Economic Cooperation and Development (OECD) Guidelines and the United Nations Guiding Principles on Business and Human Rights (UNGP) (Bueno, 2019). The risk would be high due to different laws in separate countries in their supply chain. The article suggests success with due diligence with respect, identifying the risks and taking action. Further, it states that human labour rights would be there when there is a business. Necessary steps should be taken to mitigate circumstances or prevent them. For example, if child labour is employed. Take actions not contributing to such allegations. Moreover, these can be predicted by the HR personals on or before hiring. This will avoid the onboarding process a peaceful one. 

Types of Employee Contracts

The employees will get the contracts during the onboarding process. The first few days would be spent filling the forms and getting registered to the company officially. In the meantime, the HR department will prepare the Employee Contracts. Following are some of the contract types in employment. 

1. Fixed-Term Contract - Similar to Permanent Employees. Time-bound. Ends after a project or work is completed.

2. Full-time or Part-time Contract (Infinite Time Period) - Permanent employment including statutory paid holidays. The contract will include the rights, conditions, duties and responsibilities.

3. Temporary Employment or Agency Staff - Outsourcing on a contract basis is possible for some organizations which can be a temporary requirement. 

4. Internships - Graduates and other employees who need to gain experience for a fair amount of pay can use this opportunity provided by organizations. 

5. Freelancer - Self-employed person also can work as a freelancer. Providing services to one or more organizations at the same time at a given price. 

The "Digital HR" can be used during the onboarding process to make things convenient for the employer and the employee.

DocuSign eSignature allows potential employees to securely view and sign contracts from virtually anywhere in the world and sign from their mobile devices. DocuSign CLM helps optimize the employee onboarding and onboarding process by automating employment contracts and contracts and centralizing employee contracts for easy search and retrieval.

Conclusion

Labour laws are there to save the employer as well as the employee in many instances. In other ways, it can be turning the employer down without much notice of the seriousness of the problem with the employees. Tax regulations such as the EPF and ETF have been described in many countries. Further, there are a few types of employment contracts discussed in the article. Moreover, the real-life examples shared using the previous literature have explained the importance of legal and compliance to the onboarding process of a company. There will be challenges and risks related to labour law and compliance in all the countries. It is the duty of HR professionals to take care of the employees and be aware of the respective laws in the country to produce a successful and fair onboarding process "for all" without any discrimination. Finally, the article suggested Organizations can help improve employee onboarding and the onboarding experience by simplifying manual processes with digital tools.

References

Bueno, N., 2019. Multinational Enterprises and Labour Rights: Concepts and Implementation. Zurich Open Repository and Archive, pp. 421-438.
Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3279486
[Accessed 20 August 2023].

Kuddo, A., 2018. Labor Regulations throughout the World: An Overview, Washington: World Bank.
Available at: https://lawscopelibrary.com/admin/articles/labor-regulations-throughout-the-world-an-overview/127606-REVISED-EPL-final-FULL.pdf
[Accessed 18 August 2023].

Sears, B. & Mallory, C., 2014. E-scholarships. [Online]
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[Accessed 17 August 2023].

Unsal, O., 2019. Employee relations and firm risk: Evidence from court rooms. Research in International Business and Finance, Volume 48, pp. 1-16.
Available at: https://www.sciencedirect.com/science/article/abs/pii/S0275531918303994
[Accessed 19 August 2023].

Unsal, O. & Rayfield, B., 2019. Employee disputes and CEO turnover: Evidence from labor lawsuits. Journal of Corporate Accounting & Finance, 30(2), pp. 44-63.
Available at: https://blakerayfield.com/publication/ceo-turnover/DisputesandCEOTurnover.pdf
[Accessed 16 August 2023].

Valenti, A., 2020. LGBT Employment Rights in an Evolving Legal andscape: the Impact of the Supreme Court’s Decision in Bostock v. Clayton County, Georgia. Employee Responsibilities and Rights Journal, Volume 33, pp. 3-23.
Available at: https://rb.gy/0s4po
[Accessed 20 August 2023].

Weiss, M., 2022. Challenges for Labour Law. In: E. Adamovich & M. Zernikow, eds. Philosophical and Sociological Reflections on Labour Law in Time of Crisis. Newcastle: Cambridge Scholars Pulishing, pp. 339-352.
Available at: https://www.cambridgescholars.com/product/978-1-5275-8349-8
[Accessed 15 August 2023].