Workforce compliance: A year-round strategic imperative
Workforce compliance is no longer a box-checking exercise reserved for year-end. It’s a strategic imperative that spans the entire business cycle—one that enables transformation, resilience and agility. For chief human resources officers, chief financial officers, total rewards officers and other people leaders, the stakes and complexity have never been higher. Aligning people strategy with business risk, growth and operational efficiency is essential to navigating change and driving performance.
Why a year-round approach is best practice
Compliance isn’t static. Organizational changes—growth, restructuring, geographic expansion—create new obligations and risks. A proactive, year-round approach helps leaders surface risks early, streamline operations and enable scalable growth.
Start with two simple questions:
- Was anything significantly different for your workforce this year?
- Are you anticipating organizational growth, restructuring or downsizing in the coming year?
For most leaders, the answer to at least one will be “yes.” To begin building a comprehensive workforce compliance blueprint for your organization, consider the compliance considerations and strategic levers outlined below.
Compliance isn’t static. Organizational changes create new obligations and risks.
What is workforce compliance?
Workforce compliance encompasses a broad spectrum of legal, tax and regulatory obligations that define the employer-employee relationship. It is more than a legal requirement—it’s a strategic necessity that safeguards your organization from risk, boosts operational efficiency, and fosters employee trust and retention.
Compliance spans multiple HR domains:
- Labor laws: Wage and hour rules, employment eligibility verification, and workplace safety standards
- Tax laws: Federal, state and local tax codes, including income tax withholding, fringe benefits and retirement plan regulations
- Global mobility: Cross-border tax obligations and reporting complexities introduced by remote work and international assignments
The compliance landscape is made more challenging by frequent regulatory updates, jurisdictional nuances, and the need to align compliance with both business strategy and employee expectations.
Questions to consider:
- Have you added or amended benefit plans, compensation structures or employment agreements this year?
- Have you reviewed your 401(k) pay codes in the last three years?
- Were any nontaxable payments made outside of payroll?
- Have you had changes to leave policies, employee terminations with post-payments or new hires in different states?
- Did any employees pass away this year?
- Did you have any equity compensation events (e.g., restricted stock unit vesting, stock grants)?
- Have you onboarded service providers in foreign jurisdictions?
- Was your organization impacted by a natural disaster?
- Have you conducted a payroll risk review in the past three to four years?
- Are your HR policies and handbooks updated for new legal requirements?
Legal and tax risks can result in unexpected costs. If you haven’t reviewed the items above in the past few years, a comprehensive compliance review can help mitigate any underlying risk. If you’ve recently completed a review but experienced changes, a targeted assessment may be warranted. Many of these areas involve tax nuances that benefit from consultation with trusted advisors.
Optimization opportunities:
- Human resources information systems (HRIS) and payroll integration: Consolidate dataflows across payroll, time tracking and benefits to reduce manual intervention.
- Process automation: Automate lifecycle events like onboarding, leave tracking and compliance reporting.
- Insight-driven HR: Use segmentation, audits and workforce analytics to monitor pay accuracy and compliance exposure.
Questions to consider:
- Are payroll, time and benefits systems operating in a single source of truth?
- Are you leveraging your HRIS for strategic analytics—not just recordkeeping?
- When was your last payroll risk assessment or engagement audit?
- Have you evaluated the efficiency and accuracy of your HR operations through a formal process review?
Key risk areas:
- Deferred compensation and tax treatment: Missteps in 401(k) definitions, nonpayroll payments and deferred compensation can lead to IRS scrutiny.
- Pay transparency and equity reporting: New laws mandate salary range disclosures and equity compensation transparency.
- Multistate and global workforce compliance: Expanding into new jurisdictions multiplies tax reporting, labor filings and policy updates—creating compliance risk if not actively monitored and standardized.
Questions to consider:
- Did you add or amend any compensation arrangements or deferred compensation plans this year?
- Were there any equity transactions (e.g., stock option exercises, grants of equity)?
- Are you compliant with new or upcoming pay transparency laws?
- Did you employ anyone in new states or foreign jurisdictions?
- Are employees traveling to various locations for work?
Strategic workforce planning: Aligning talent and business goals
HR leaders sit at the intersection of people, risk and enterprise strategy. Beyond overseeing policy, they shape performance outcomes, build leadership continuity and design total rewards programs that reinforce talent attraction and retention.
Strategic focus areas:
- Performance and incentives: Align reviews and incentive structures with business outcomes.
- Leadership continuity: Identify critical roles and create succession pathways for high-potential talent.
- Total rewards: Expand benefits to address mental health, financial wellness, flexibility and evolving workforce expectations.
Questions to consider:
- Are you updating your performance review processes or competency framework?
- Is your compensation benchmarking aligned with current labor market trends and the realities of a hybrid workforce?
- Are you forecasting significant growth or ownership changes in the next two to four years?
- Are you planning for restructuring, downsizing or expansion?
- Have you identified critical roles and high-potential talent for leadership pipelines?
- Are you expanding benefits to support employees’ mental health, financial wellness, or diversity, equity and inclusion (DEI) goals?
- Have you explored automation for onboarding, performance reviews or compliance tracking?
- Do your incentive plans directly reinforce the performance behaviors and outcomes your business is prioritizing?
- Are you using HR metrics such as turnover, time-to-fill and engagement to guide decisions?
Workforce compliance is a strategic imperative—not a year-end checklist.
Compliance for growth and change
Whether your business is scaling, restructuring or expanding geographically, workforce compliance must evolve in tandem.
Growth readiness priorities:
- Scalable compensation design: Develop pay structures that flex with expansion, acquisition or restructuring needs.
- Cross-functional alignment: Engage finance, payroll and legal early to align on compliance risk when making growth decisions.
- Jurisdictional readiness: Proactively update policies, reporting workflows and labor law tracking as your footprint expands.
Questions to consider:
- Do you expect head count increases, acquisitions or ownership changes in the next 12 to 24 months?
- Have a merger or acquisition or location changes introduced new compliance obligations this year?
- Are HR, payroll, finance and legal working from a shared compliance roadmap?
- Are you prepared for state, local or global regulatory shifts tied to growth?
Operational efficiency
Optimizing HR operations aligns talent strategies with business goals by streamlining processes, reducing inefficiencies and enhancing the employee experience.
Modern human capital management platforms like Dayforce, UKG or Workday automate payroll, benefits and compliance reporting; integrate systems; and enable self-service—freeing HR teams to focus on strategic initiatives such as leadership development and workforce planning.
By leveraging technology and fostering a culture of engagement and accountability, organizations build resilient, high-performing workforces while creating responsive, transparent workplaces that attract and retain top talent.
Questions to consider:
- Did your organization relocate or experience significant workforce changes this year?
- Are you updating performance reviews, goal setting or competency frameworks?
- Have you conducted engagement surveys or pulse checks and created action plans?
- Are you prepared for changes in paid leave or other state-mandated benefits?
- Have you reviewed pay equity and market competitiveness for all roles?
- Are you reviewing your bonus, commission or sales incentive structures for alignment with business goals?
- Are payroll and benefits systems integrated to reduce manual errors?
- Are you evaluating or optimizing your HRIS for better efficiency and analytics?
Just like compliance gaps, operational inefficiencies can lead to hidden costs. Regular reviews and system optimizations help mitigate these risks and support strategic growth.
Bringing it all together
Workforce compliance, operational efficiency and strategic planning are interconnected pillars of a resilient HR strategy. By proactively managing legal and tax obligations, optimizing systems, and aligning HR with long-term business goals, organizations reduce risk, improve performance, and create workplaces where people thrive. Leveraging automation, integrated technologies and workforce analytics further enhances efficiency and drives sustainable strategic change—positioning HR not just as a support function but as a catalyst for growth.
Integrated, data-driven HR operations turn compliance into a growth enabler.
RSM’s workforce compliance framework
RSM helps leaders:
- Modernize policies and operating procedures to stay ahead of multi-jurisdiction workforce requirements.
- Establish compensation governance and total rewards oversight that scale with business growth and workforce expectations.
- Create alignment across HR, payroll, finance and legal to manage growth with control and confidence.
If your organization is experiencing growth, change or operational strain, RSM’s advisors can help you turn compliance into a strategic enabler—not a constraint.
Just like compliance gaps, operational inefficiencies can lead to hidden costs. Regular reviews and system optimizations help mitigate these risks and support strategic growth.
For assistance building your comprehensive workforce compliance blueprint, reach out for a complimentary consultation with one of our workforce compliance advisors.
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