HR compliance checklist – free download and guidance

Good processes are the backbone of any strong business, and an HR compliance checklist is vital for ensuring you have solid HR processes in place.

An HR compliance checklist helps UK small businesses adhere to laws and regulations regarding their responsibilities as an employer and the rights of their employees.

If you’re a small business owner just getting started, HR is one of the many responsibilities you have, but making a mistake can result in serious consequences. An HR compliance checklist will help to prevent errors and enable you to more easily switch into ‘HR mode’ when you need to.

Teams in small companies have to wear a lot of hats (for example, I don’t just lead our HR team, I’m also in charge of payroll, pensions, and finance), but that doesn’t mean you automatically know how to build complex HR processes from scratch.

So to make things a little easier for you, I’m going to share our own HR compliance checklist. You can download it straight away or keep reading to learn about all things compliance.

What is HR compliance?

HR compliance means abiding by the legal, ethical, and professional standards of human resources (HR) management.

And it’s more than just a legal requirement for businesses in the UK. HR compliance means creating a positive workplace that respects the dignity and rights of your employees.

It also covers legal aspects such as employment laws, health and safety regulations, and equality legislation. Beyond that, HR compliance takes into account ethical considerations like the fair treatment of your employees and creating a transparent workplace culture.

Common HR compliance issues in the UK

Even if they mean well, businesses make honest mistakes. Here are some of the more common issues around HR compliance you’ll have to navigate:

Wage regulations - if you fail to pay the National Minimum Wage or National Living Wage, you can face hefty fines (not to mention the damage to your professional reputation)
Working time violations - exceeding the maximum allowed weekly working hours, or not providing enough breaks, can result in legal action
Discrimination - unlawful discrimination based on age, gender, or ethnicity is not only unethical, it’s also illegal
GDPR and data privacy - mishandling sensitive employee data and failing to comply with General Data Protection Regulation (GDPR) can mean severe penalties and a loss of trust.

Understanding these is the first step to creating a comprehensive HR strategy, and your HR compliance checklist will help you to navigate and avoid them.

What is an HR audit?

An HR audit is a routine check of your business’ HR processes and policies to ensure you’re staying compliant with UK employment regulations.

However, it can also be a strategic tool to position your organisation for HR success.

An HR compliance checklist makes it easier and more straightforward to undertake an HR audit.

What is an HR compliance checklist?

A good HR compliance checklist (also known as an HR audit checklist) serves multiple purposes:

Compliance verification

The main goal of an HR compliance checklist is to make sure your business is run according to UK employment law.

When you systematically and regularly review your HR policies, processes and practices through an audit, you spot potential problem areas and any risks of non-compliance (wage relations or working hours, for example).

Performance evaluation

A well-run HR audit also assesses how well your HR systems are performing.

The audit evaluates your recruitment strategies, training programs (you might then put together a training agreement template), employee engagement, and other areas where you might refine your HR practices.

Using an HR compliance checklist for your audit ensures nothing is overlooked, and then can improve your HR processes and align them with your business goals.

Risk management

Importantly, you’ll also identify vulnerabilities in your HR processes (discrimination issues or data security risks, for example) with an audit, and be able to put preventative measures in place.

Knowing where your HR processes are lacking will help you create a stronger and more resilient company.

The ultimate HR compliance checklist for small businesses

The complications of UK employment law are daunting for any small business.

To help you stay on top of your legal obligations, I’ve put together this HR compliance checklist. It makes compliance easier and much more straightforward:

Employment contracts and documentation
Work statuses for all your team members
National minimum wage and national living wage
Working time regulations
Annual leave policy and holidays
Maternity, paternity, adoption, and shared parental leave
Sick leave and sick pay
Probation periods and notice periods
Right-to-work checks (or pre-employment checks)
Equality and discrimination
Data protection policy and GDPR compliance
Termination of employment and redundancy
Health and safety
Pension auto-enrollment
Training and development
Employee handbook and policies
Trade union and employee consultation
Gross misconduct and disciplinary
Grievance policy and dispute resolution
Employer's liability insurance
Exit interviews and offboarding

Let’s go through each of these in a little more detail.

1. Employment contracts and documentation

Providing an employment contract within two months of their start date is a legal requirement and the foundation of a strong relationship between you and your new employee.

Contracts must include information like the job title, responsibilities of the role, working hours and salary.

With HR software like Charlie, you’re guaranteed legally-compliant onboarding. You can welcome your new employees with a customised flow and create checklists to delegate specific tasks (like employment contracts) to your hiring team.

2. National wage regulations

Your employees have a right to earn a minimum wage.

Ensuring you’re paying the National Minimum Wage and National Living Wage is important to compensate your employees fairly for their age group, and maintain their trust.

3. Working time and annual leave

Your HR audit should monitor the working hours of your employees and check that they’re taking their mandatory breaks.

In the UK, the law pertaining to the working hours and annual leave is known as the Working Time Regulations (WTR). These state that:

the average working time for an employee cannot exceed 48 hours per week (with special exceptions)
your employees should get at least 28 days of paid annual leave.

So it’s vital that you correctly calculate and document the holiday entitlement of every member of your team, and that includes part-time and variable-hour employees.

As your business grows, annual leave management and the related admin can become a time vacuum and a headache. Charlie’s time-off feature takes care of all of this for you — tracking how much paid holiday each of your employees is allotted, and automatically calculating their allowance.

You can also easily customise Charlie depending on your holiday year and holiday policy – and bank holidays are automatically added to the company wide calendar.

4. Maternity and parental rights

Make sure you’re informing your employees of their rights around maternity, paternity, adoption, and shared parental leave.

5. Right-to-work checks

Verifying that your employees have the legal right to work in the UK and having the documents to prove it is crucial.

With Charlie’s onboarding feature automates a lot of this essential paperwork and handles the verification process.

6. Equality and discrimination

You want to create a culture that promotes equality, diversity and inclusion, and anti-harassment and anti-discrimination policies are at the heart of that.

The Equality Act 2010 provides guidance on what counts as discrimination — refer to it to create a safe and welcoming workplace where everyone feels protected, heard, and seen.

Handling sensitive employee data according to GDPR guidelines is non-negotiable.

With Charlie, your employee’s details and sensitive information is securely stored, so you’re always compliant. And our ISO 27001 certification means all of this data will be safe from cyber attacks and data leaks.

8. Termination and redundancy

Following proper dismissal procedures, redundancy criteria selection, and redundancy consultation requirements is necessary to ensure you’re treating all of your employees fairly.

9. Health and safety

Implementing and reviewing your safety practices is vital for a healthy work environment. This includes conducting risk assessments and providing health and safety training for your team.

10. Pension auto-enrollment

Enrolling your eligible employees and informing them of their rights regarding their pension is part of responsible financial planning and legal compliance for your business – check out how you apply a pension to a small business.

11. Training and development

When you offer skill training and career development opportunities, you invest in your employees in a way that builds their loyalty, improves their performance, and increases business growth.

12. Employee handbook policies

An employee handbook containing all of your HR policies so that your employees can easily access them whenever they need.

Access is even easier with software like Charlie, as your employee handbook can be stored in the system for everyone to find. No more emailing out links or searching through folders!

13. Trade union and employee consultation

As an employer you may need to work with trade unions that represent groups of your employees, and you’ll need to ensure your business complies with their requirements.

14. Grievances and dispute resolution

Creating and communicating clear procedures for workplace disputes and grievances so that conflicts are resolved fairly and peaceably.

15. Exit and offboarding

Following the proper legal procedures when an employee leaves your company (offboarding) is important for them and for you. This includes conducting an exit interview and returning all company property.

As with onboarding, Charlie also supports you with offboarding. Automated checklists ensure that nothing is missed, and gives your departing employee a professional exit.

How Charlie can help you create your HR compliance checklist

Creating an air-tight HR compliance checklist is no small endeavour for a small business.

We’ve gone through this process ourselves at Charlie, so know first-hand what it entails. And we’ve built this knowledge and experience into our HR software and the advice we give to fellow small businesses.

Charlie’s got your HR compliance checklist covered, so that nothing is missed and everything complies. Giving you total peace of mind.

With Charlie, you get:

Secure and accessible document storage, and all in one place
Automated onboarding where your team members ‘self-serve’ and enter all information themselves
HR checklists where you can set due dates and assign specific tasks
100% compliance.

Charlie’s built to take the faff and worry out of HR compliance checklists, and makes it easy for small businesses to look after their people while complying with UK employment law.

To see how easy it is, start your 7 day free trial today.