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HR Magazine, March 2004 - HR Technology: Compliance Tools

By John McCormack  3/1/2004

HR Magazine, March 2004

Vol 49, No. 3

Technology can help HR stay on the right side of the law.

Complying with ever-changing government regulations and determining how they affect company performance is a core human resources function, one that HR professionals would prefer to take care of effectively and expediently so they can concentrate on more strategic initiatives.

To add value to the organization, HR professionals need to spend less time satisfying government regulations and more time working on change management initiatives, according to industry experts.

To do so, HR professionals need to realize just how useful information technology can be in compliance efforts. They also need to sort through the myriad information technology (IT) choices that ease compliance efforts.

Enterprise human resource information systems (HRIS), functions embedded in such systems and software programs designed specifically to comply with certain regulations can help.

Simplify Reports With Automation

Using software from SAP, based in Walldorf, Germany, helps keep 10,000 employees in line with various regulations—a vast improvement from the old paper pushing days—says Connie Muscarella, vice president of HR and administration at Thomas & Betts Corp., an electrical component manufacturer based in Memphis, Tenn.

“I remember the old days of EEOC [Equal Employment Opportunity Commission] reporting, and it took months to pull the numbers and complete the reports,” Muscarella says.

MySAP Human Resources helps HR professionals quickly get the information they need to comply with regulations. The software provides a simple, standard report tool, an intuitive user-friendly graphical reporting tool and a ready-to-use graphical reporting tool, according to an SAP spokesperson.

The system automates some functions that HR professionals would have to spend time tracking. For example, the software alerts HR professionals when employees become eligible for participation in a company’s 401(k) program. Previously, human resources managers would have to track hire dates and eligibility dates and then alert employees when they qualified for participation, according to SAP.

The value of the system lies in its ease of use. To come up with a report, users simply define requirements and use a drag-and-drop function to select the appropriate files for any report they would like to create. The system does not require any specific programming skills, Muscarella says.

“Now, I can do an EEOC report in about 10 seconds,” Muscarella says. “The system gives me the capability to immediately produce information. As a result, I can spend more time on the analysis of the information.”

For example, Muscarella recently pulled information to determine areas within the company where minorities were not adequately represented. Because she could pull the information in a jiffy, she was then able to focus on developing minority recruitment strategies.

The system likely will help the company comply with the reporting requirements emanating from the Sarbanes-Oxley Act as well as the Health Insurance Portability and Accountability Act (HIPAA), Muscarella says.

“The system enables us to get the information we need—and control the information—in a timely manner. By having all of this collective data in one place, we can be so much more efficient,” Muscarella says. “Before we had this system, quite honestly, we didn’t even know how many employees we have.”

Compliance Add-Ons

While compliance was not top of mind when Town Care Dental Group, a Miami-based company that manages dental group practices, purchased a Kronos human resource management system (HRMS), the ability to use the system to assist with compliance activities has become an added benefit. Although the group was drawn to the system primarily to take advantage of time-and-attendance functions, Town Care is finding that the system also helps the group with compliance as well.

“It provides us with an electronic version of our paper personnel system. So it helps because you have accurate data readily available,” says Basil Paquet, HR director. The system helps HR professionals create reports to comply with EEOC, Fair Labor Standards Act, and Family and Medical Leave Act (FMLA) regulations, Paquet says.

The advantage is primarily seen in the time savings.

“We were doing compensation planning, trying to build a set of real number salary ranges against jobs,” Paquet says. “The task previously would have taken us 10 to 12 hours. It is really labor-intensive. But with the Kronos software, we were able to complete the task in 10 minutes.”

Mind Over Machines Inc. of Baltimore is a time-and-attendance system that helps companies comply with leave regulations. The system makes it easy to track the most complex regulations because it was originally developed for the National Institutes of Health, a federal agency with complicated leave regulations, says Tom Loveland, chairman of Mind Over Machines.

“During just about every congressional session, Congress comes up with another leave benefit for federal employees,” Loveland says. “It’s really difficult to keep up with all this—and to track it for your employees.”

For Compliance Only

Although comprehensive HR management systems can help with regulatory compliance by offering electronic access to data and information and the ability to produce customized reports, other software systems are created for the sole purpose of dealing with complex compliance regulations.

For example, Cigna Leave Solutions, developed by Cigna Group Insurance of Philadelphia, can help companies keep up with the complicated leave regulations that emanate from a plethora of federal and state regulations.

That challenge has become increasingly complex. Over the past few years, Congress has layered new leave laws on top of existing ones, which means there are now more than 40 types of federal leave laws in existence. What’s more, some companies have their own leave policies in place, further complicating the matter.

FMLA can be especially challenging. Seventy percent of companies report that they have experienced administrative difficulties while administering FMLA, and many employers still are not sure what constitutes a “serious health condition,” according to a Cigna spokesperson. Consequently, they sometimes go beyond the requirements of the law to ensure compliance.

Complying with state regulations can complicate matters even more.

“Employers might be working in several states—each with its own leave rules,” says Katie Dunnington, director of product development for Cigna. “And, when the state leave rules provide a greater advantage than FMLA, employers are required to honor those rules.”

California takes it one step further. The state has separate leave regulations that allow parents of school-age children to take off for school events such as plays and awards ceremonies. Other states have victim’s safety acts that allow crime victims to take off work, and some have leave regulations designed to encourage people to donate bone marrow, Dunnington says.

Cigna Leave Solutions enables employers to manage administration of FMLA, short-term disability, military duty, jury duty and bereavement leave through one simple, coordinated process, she says.

“It just all becomes really complicated,” Dunnington says. “There are so many regulations, and then there are different rules associated with each regulation as to eligibility, etc. It is just difficult to keep up with it all.”

Tracking the training requirements associated with International Orga-nization for Standardization (ISO) certification is another administrative headache. TSE Industries, a family-owned custom rubber and plastics manufacturer located in Clearwater, Fla., uses Abra Train Software from Ideal Consulting, a Best Software business partner headquartered in Tampa, Fla.

TSE monitors numerous training certifications for employees. The software helps to keep track of employees’ various ISO certifications and participation in training programs, according to a company spokesperson.

“Abra Train has simplified our certification processes,” said Michelle Hintz-Prange, HR manager for TSE. “Prior to implementing Abra Suite, we’d manually search through thousands of paper files to prove compliance. Now, when an auditor asks for proof, we can electronically pull up the required information in a matter of seconds.”

Like many other companies, Applied Materials of Santa Clara, Calif., is dependent on an international workforce. Many of the company’s workers are concerned with their immigration status.

“We don’t want employees thinking about immigration problems and processes,” says Kelly Bunch, supervising immigration specialist who uses Immigration Tracker software to keep tabs on employees’ status. The software is administered by Pearl Law Group of San Francisco. Bunch is employed by Pearl but works exclusively on behalf of Applied Materials.

The company is also dependent on multinational managers, Bunch says. “We have people who work in many of the locations that the company has. For example, we might have a highly skilled manager in Germany who is needed to come over here and set up processes in the United States. We have to be able to make sure that we are doing that legally.”

The Immigration Tracker software also helps the company keep track of the eligibility of employees to work in the United States. Some workers, for example, are needed to actually work on projects in the United States, so they need a work visa. If they are merely visiting for a meeting, however, they only need a business visa, Bunch says.

“The software takes the confusion out of a very complex process,” Bunch says. “There are so many immigration regulations. Really, there are just too many to think about. The software helps to keep track of all of the details.”

John McCormack has more than 15 years experience writing for national magazines and daily newspapers about technology, health care and business. 

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