6 Reasons Human Resources Professionals Must Know Labor Laws

Human resources law

The human resources personnel of an organization are responsible for managing its workforce. They play a key role in handling employee relations and framing employment policies of the company. However, most professionals do not have sufficient knowledge of labor laws. This can cause problems for such executives. Just like any other aspect of running a business, employing and managing workers at an enterprise is subject to various legal regulations. Large corporations hire employment law consultants to get assistance on the subject. This can be difficult for small businesses because of their limited budgets. Many firms approach a labor lawyer only when they get stuck in an issue. It will be better if their human resource managers know about applicable laws as it will help them avoid employee-related legal issues. Let’s take a look at the top reasons HR personnel must be aware of important regulations.

1. Know The Correct Way To Hire And Fire

The foremost reason for which managers must know about labor laws is to know the correct manner to employ and dismiss people. The employment of a person for discharging specified duties at an organization needs to be formalized properly. It is the duty of the employer to clearly state the responsibilities of the new staff member. The company must also communicate to the workers about the exact compensation and other benefits that they will be paid. The HR department must also know how to classify the workers. The number of full-time and contracted employees affects the tax and reporting requirements of an enterprise. Removing a staff member also needs to follow a specified procedure. It is important to ensure that the company is on the right side of the law while dismissing a person. However, if you want to fire someone who has committed a crime in the past, you should first study about the pardon and waivers. You can read the FAQs – Pardons guide to find the basic information about how pardons and waivers work.

2. Identify The Important Clauses of Agreements And Contracts

The employment of a person with an organization is formalized through a written document which clearly states his/her duties along with the salary and benefits being paid. Full-time employees need to sign a different agreement as compared to contract workers. The latter’s agreement will mention the duration for which the person will be engaged with the corporation. HR professionals need to know the relevant laws related to benefits such as provident fund, gratuity, pension, healthcare, and insurance. This is necessary as the organization is liable to a certain extent towards a staff member’s well being. The extent of this responsibility can be understood only after studying the applicable labor laws. This will help in framing watertight employee agreements which will minimize the scope of dispute in the future.

3. Drafting The Employee Handbook

Every organization has its own employee policy which it codifies in a handbook. This document educates staff members about the company’s culture and its values. Additionally, this manual contains information about leaves, benefits, and the policies and rules which must be adhered to by the workforce. The knowledge of relevant legal regulations will ensure that any condition specified in the handbook does not break the law. It will also help in drafting the document in a language that will be unambiguous so that it cannot be misinterpreted.

4. Helpful In Creating A Healthy Working Environment

It is the responsibility of the human resources department to ensure that the employees get access to safe and hygienic working conditions. Labor laws dictate that the workplace is free of known safety and health hazards. Any violation of the regulation can attract strict penalties. Businesses located in the manufacturing sector have to be especially careful in this regard. Their work involves the use of heavy machinery and chemicals which can cause accidents. Adhering to workplace safety regulations will be helpful in not only avoiding legal trouble but also in improving the productivity of the corporation.

5. Ensures Employees Are Paid The Correct Compensation

The monetary compensation or the salary being paid to workers is another key area that is governed by employment laws. The HR professionals have to be aware of the minimum wage required to be paid to an employee according to local regulations. They must also know about the other benefits that must be given to the staff members. There are regulations which dictate the manner in which employees have to pay the staff for any overtime work done by them. These laws vary from one jurisdiction to another and it will be pertinent to consult local experts. For instance, a business located in India must engage labor law consultants there to educate their HR professionals about applicable regulations.

6. Preventing Discrimination And Sexual Harassment

The authorities in all major economies of the world are impressing upon the need of an inclusive workplace. They want organizations to hire people irrespective of their gender, race, caste, color, religion etc. Strict laws have been framed which prohibit employers to restrict employment opportunities, pay or other benefits due to any kind of prejudice. The HR section must be knowledgeable about such laws so that their organization is not guilty of violating them. Sexual harassment is also considered a serious offense and such cases negatively affect the image of any enterprise. All the regulations for preventing workplace harassment require the establishment of a grievance redressal mechanism. HR personnel, well-versed in such laws will know how to create a framework for filing and addressing complaints in an unbiased and speedy manner.


Human resources professionals play a vital role in creating a link between the management and the workforce. It will be sensible that organizations engage labor law consultants to train HR personnel which will enable them to maintain the employer-worker relationship in a better manner.


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