HR Compliance: How Startups Can Leverage Deel’s HR Automation Tools

For small business owners, managing HR compliance can be challenging. Adhering to labor laws is essential for protecting workers and your business, but it often involves handling many time-consuming tasks that are prone to errors. HR automation tools can simplify these processes, reduce risks, and save time. 

Understanding HR Compliance

HR compliance involves adhering to the various labor laws and regulations that protect the rights of workers. These laws are in place to govern the relationship between employees and employers, as well as between contractors and clients. It’s important to note that these regulations can vary widely across different countries, states, provinces, and territories.

Key Labor Laws for Employees

The primary labor laws present throughout the world that impact employees include the following:

• Minimum wage

• Overtime pay

• Work hours

• Rest breaks

• Employment agreements

• Employee benefits such as paid time off (PTO), parental leave, and pensions

• Probationary periods

• Background checks

• Payment methods

• Payment periods and schedules

• Payroll taxes

• Payroll records

• Termination procedures

Key Labor Laws for Independent Contractors

Independent contractors are typically subject to different laws and regulations compared to employees. Contractors are self-employed, meaning they set their work schedules, pay their own taxes, and are not legally entitled to the same benefits as employees. Key rights for contractors include:

• Right to a contractor agreement

• Right to control their work

• Right to intellectual property

• Right to work on their terms

• Right to market their services

• Right to negotiate payment terms and choose payment methods

• Right to work with multiple clients and contractors

• Right to challenge their classification

•  Right to manage their taxes and claim deductions

Laws affecting independent contractors are evolving, partly due to the rise in remote work, issues with worker misclassification, and challenges with unemployment benefits.

How Startups Can Automate HR Compliance

To ensure compliance, startups can automate several HR processes. Here’s how automation can help:

Data Collection

Automating data collection helps ensure all necessary information is stored in one place, which is essential for audits or legal disputes. Different countries have laws requiring employers to collect specific data when hiring employees or contractors. This data can range from basic details like name and address to more detailed employment records such as performance reviews and salary history.

For example, in the United States, employers must keep records of the following:

• Employee’s full name and social security number

• Address, including zip code

• Birth date if under 19

• Sex and occupation

• Pay details, including direct deposit information

Similarly, when hiring independent contractors, companies must collect information like a social security or tax identification number and banking details.

Without HR management software, gathering this information manually is time-consuming and prone to errors, risking data security and compliance issues. With Deel’s all-in-one hiring platform, startups can automate data collection through workflows that prompt new hires to input and update their information directly. This approach saves up to 86 hours of administrative work monthly and ensures data is maintained securely.

Contract Creation

Automating contract creation accelerates the hiring process, ensures compliance with local hiring laws, and helps prevent misclassification risks. Employment contracts and contractor agreements are often legally required to outline the terms of the working arrangement.

Creating contracts manually, especially for a global workforce, can be challenging due to differing legal requirements in each country. Startups might use templates, but these require constant updating and legal review to remain compliant. Templates also lack flexibility for customization.

Deel simplifies this with an automated contract workflow that provides country-specific insights and suggestions. Each contract is reviewed by local legal experts and updated quarterly. The Deel platform guides you through aspects such as:

• Compensation rates

• Contract type

• Start and end dates

• Onboarding periods

• Probationary periods

• Work hours and time off allowances

• Benefits and perks

• Equity compensation

Compliance Document Collection

Using automation to collect and retain compliance documents reduces errors and protects against legal issues. There are three categories of compliance documents required when hiring employees, depending on their country of residence:

1. Pre-employment documents: Includes job descriptions, applications, resumes, offer letters, medical records, immigration and work authorization forms, employment contracts, data protection agreements, and tax withholding forms.

2. Employment documentation: Includes job performance records, compensation details, attendance records, training completion documents, disciplinary notices, and benefits claims forms.

3. Separation documents: Includes exit interviews, resignation letters, unemployment documents, and reference statements.

For contractors, additional documents may be required, such as non-disclosure agreements, GDPR compliance forms, intellectual property agreements, tax forms, and invoices.

Without an automated system, tracking and managing these documents can be cumbersome and error-prone. Deel automates this process, allowing employees and contractors to upload necessary documents directly into a secure cloud-based platform.

Background Checks

Automating background checks helps ensure candidates are screened according to compliance standards, streamlining the hiring process and providing a comprehensive view of the candidate. Conducting manual background checks, especially for global hires, can be impractical and time-consuming.

Deel’s platform offers automated background checks that candidates can initiate from their mobile or desktop devices. The process is quick, often yielding results in minutes, and complies with SOC 2 and SOC 3 standards, GDPR, and ISO 27001, ensuring security and privacy.

Immigration Support

Automating immigration support ensures that employees and contractors have the necessary visas and permits to work legally. For startups hiring or relocating employees, obtaining work authorization is a complex and often daunting process. Many companies miss out on top talent due to the lack of resources or knowledge to navigate immigration requirements.

Deel’s platform offers immigration support, streamlining visa and work permit procurement. Deel can handle the entire process, allowing companies to hire or relocate talent efficiently while remaining compliant.

Equipment Provisioning and Expense Management

Automating the provision of equipment and managing expenses ensures that employees have what they need to start their roles on time. Employers in many regions are required by law to provide necessary equipment for their employees.

Manual processes for equipment purchasing and reimbursement can be tedious, involving multiple communication channels and receipt tracking. Deel simplifies this with an integrated dashboard for expense requests and a streamlined process for equipment provisioning. Deel manages the entire lifecycle of equipment, ensuring compliance with tax, customs, and shipping regulations across over 150 countries.

Benefits Enrollment

Automating benefits enrollment ensures employees are promptly added to the correct plans to receive their statutory entitlements. Globally, governments often mandate certain employee benefits, such as health insurance, retirement plans, and paid time off.

Manually enrolling employees in these plans can be complex and error-prone, particularly for globally dispersed teams. Deel automates this process, offering insights into country-specific benefits and facilitating enrollment directly through the Deel dashboard. Deel’s partnerships with global benefits providers also offer exclusive discounts and perks.

Time Tracking and Attendance

Automating time tracking, attendance, and leave management is crucial for maintaining compliance with legal requirements and ensuring accurate payroll. Manual tracking methods, such as spreadsheets, are inefficient and prone to errors. 

Deel integrates with leading time-tracking software to provide seamless time management and payroll synchronization. The platform also supports PTO management through Slack, making it easy for teams to handle time-off requests and approvals.

Payroll, Compensation, and Tax Reporting

Automating payroll and tax reporting reduces costs, ensures accuracy, and helps maintain compliance with local laws. Local payroll regulations require specific payment practices and timely tax filings. Manual payroll processes are time-consuming and susceptible to mistakes, potentially resulting in penalties.

Deel’s global platform automates payroll processing, considering local currencies, exchange rates, benefits deductions, and tax contributions. It also supports diverse payment methods, enabling seamless compensation for employees and contractors worldwide.

Automate HR Compliance with Deel

Entrepreneurs and small business owners have enough to manage without the added burden of navigating complex local and international hiring regulations. Deel’s intuitive HR and payroll platform automates compliance, eliminating repetitive tasks and administrative burdens. 

With Deel, you can automate all key HR functions, from contract creation to compliance document collection, background checks, immigration support, payroll processing, and more. The platform also integrates with existing HR tools, streamlining workflows and simplifying compliance management across over 150 countries. By leveraging Deel’s all-in-one solution, startups can focus on growth and innovation, knowing their HR compliance needs are efficiently managed.