The Overlooked Role of HR

Many business owners underestimate just how many responsibilities fall under the HR department. From compliance management to handling leaves of absence and unemployment claims, HR is a critical function that ensures smooth operations and protects the company from liability. Here’s a look at some of the essential tasks HR manages daily and why overlooking these responsibilities can be costly.

Employment Verification and Liability Protection

One of the fundamental responsibilities of HR is handling employment verifications. When former employees apply for new jobs, their work history needs to be confirmed, but companies must be cautious. Privacy regulations require written permission before releasing any employment information. Additionally, personal references can open the business to liability—if a negative reference leads to an applicant being denied a job, the company could face legal consequences.

Workers’ Compensation: A Hidden Cost If Left Unchecked

Handling workers’ compensation claims is another critical HR function, and failure to stay on top of these cases can lead to major financial losses. While most businesses rely on their workers’ comp carriers, these providers are often overburdened and may not track claims closely. Without diligent oversight, fraudulent claims can escalate into significant expenses. One case saw an employee collecting thousands of dollars a month in mileage reimbursements while visiting various doctors to extend their leave. Employers must actively monitor claims, gather evidence, and, when necessary, employ private investigators to confirm the legitimacy of injuries.

Leave of Absence Management: Navigating Compliance Pitfalls

HR must also track and manage various types of employee leave, from personal and medical leave to military and family leave. Each leave category comes with distinct compliance rules, including eligibility requirements based on hours worked and employer size. Regulations such as the Family and Medical Leave Act (FMLA) and state-specific leave policies create an intricate web of rules that HR professionals must navigate to remain compliant and avoid costly legal missteps.

Mandatory Trainings: Staying Compliant and Avoiding Penalties

Mandatory training programs, particularly sexual harassment prevention training, have become widespread in recent years. Initially required in just a few states, these regulations now apply to an increasing number of businesses across the country. Employers must not only ensure that employees complete required training but also track recertification deadlines and maintain records for potential audits. Supervisors often have additional training requirements, adding another layer of complexity to compliance management.

Unemployment Claims and Audits: A Burdensome Administrative Task

Unemployment claims don’t always end when an employee leaves the company. If a former employee files for unemployment, the business may still be responsible for responding, even if the person has since worked elsewhere. HR must also manage unemployment audits, which require detailed breakdowns of wages by week to verify that claimants are not improperly receiving benefits. These audits can be extremely time-consuming and require meticulous record-keeping.

Fielding Employee Questions and Managing Benefits Enrollment

HR departments also serve as a central resource for employee questions regarding policies, benefits, and workplace expectations. Open enrollment periods for benefits like medical insurance, flexible spending plans, and 401(k) contributions add additional workload, requiring HR to communicate options, manage paperwork, and ensure compliance with federal and state requirements.

State-Specific Requirements and Special Programs

Some states have unique employer mandates that require additional tracking. For example, San Francisco’s Healthy San Francisco program requires employers to track employee participation and documentation. During the COVID-19 pandemic, HR teams also had to manage detailed tracking of employee illnesses, quarantines, and return-to-work protocols—further highlighting the ever-changing landscape of workforce management.

HR: The Backbone of Compliance and Workforce Stability

From payroll compliance to risk mitigation, HR is far more than just hiring and firing. It is a crucial function that, when managed effectively, protects a company’s bottom line while ensuring a positive work environment. Businesses that fail to invest in HR expertise or overlook these responsibilities can face severe financial and legal repercussions.

With evolving regulations and increasing administrative burdens, businesses are not advised to navigate HR challenges alone. A Strategic Workforce Partner provides the expertise and proactive management needed to ensure compliance, reduce liability, and optimize costs—allowing companies to focus on growth while mitigating risk.