While selecting the right HRIS system is a major process in itself, configuring it is a whole other piece of the puzzle. From the recruitment-to-hire process to timekeeping and payroll, it’s essential to set up the system optimally from the start to support compliance and ensure the most success as your business grows. When you add in the government contract compliance piece, the “puzzle” is even further complicated.
Audits can occur at any time, so having your system set up to be audit-ready from the outset is crucial. You must keep in mind, even at the setup state, the possibility of growth and the addition of new locations, as you want your HRIS to be scalable for the future of your company. Compliance can vary greatly from state to state, including the types of forms that must be signed during onboarding, state and local taxes, and state laws upon termination. All of these variables can cause a lot of unwanted stress if processes are not addressed on the front end.
A properly configured HRIS system will have pre-configured reports ready and workflows specific to your company, project preferences and compliance needs. Processes should be established prior to implementation to ensure compliance is handled consistently across the board, regardless of your business size, and to prevent panic surrounding those processes. Redstone GCI utilizes UKG Ready along with our team’s wealth of knowledge surrounding compliance and support for government contractors to assist clients with these goals.
Why Compliance Must Be Built into HRIS Setup
Beyond internal HR policies, government contractors must also align system development with the compliance requirements tied to their contracts. When building a system, such development not only needs to align with the company’s internal policies, but it must also comply with the requirements of the company’s contracts and government policies in place.
It’s imperative to consider the following key compliance areas upon setup:
- EEO-1 and Affirmative Action Obligations: Covered federal contractors must annually submit EEO-1 reports, VETS 4212 reports and develop Affirmative Action Plans for individuals with disabilities (Section 503) and protected veterans (VEVRAA). In order to successfully and efficiently maintain compliance with these requirements, specific information regarding race, gender, veteran and disability status must be maintained throughout the employment life cycle.
- Education, Experience, Certification, and Clearance Tracking: It is important to be able to quickly and easily identify those in your workforce who have specific education, experience, certifications and clearances. Having this information readily available can support a DCAA audit, assist with proposal development and impact compensation analyses.
- DCAA-Compliant Timekeeping: Your HRIS should be configured to support complete and accurate time entry, approvals, and audit trails that align with DCAA requirements for labor charging.
- Leave Administration and Tracking: Accurate administration and recordkeeping related to leave types is essential. Employers must consider the requirements of the Family Medical Leave Act, Service Contract Act and/or Davis Bacon Act, vacation and sick leave requirements, state requirements and internal policies when structuring policy and system setup.
- Service Contract Act (SCA) and Davis-Bacon Act (DBA): Contracts covered by the SCA or DBA require some combination of the following: minimum wages, fringe benefits, vacation, holidays, sick leave, etc. A solid understanding of these requirements is crucial to a successful implementation. The system should be implemented with the ability to update requirements based on new Wage Determinations easily. The goal is to seamlessly track all requirements and ensure accurate records can be promptly provided upon audit.
- Benefit Administration: Benefits are a key component of the total compensation plan, and it is imperative that offerings are well-communicated upon hire, annually at open enrollment and upon termination. Benefit selections should tie correctly to payroll and invoice reconciliation. Benefit enrollment should be carefully monitored to ensure accuracy.
- ACA Compliance: Employers must understand their obligations under the Affordable Care Act, specifically if they are considered an ALE (Applicable Large Employer) with 50+ full-time employees (working 30+ hours per week or 130+ hours per month) during the previous year. This requires ALEs to offer health insurance plans with minimum essential coverage requirements to at least 95% of Full-Time employees. Tracking hours worked, look-back periods, and premium information is critical to this process.
- Required Training: Many FAR clauses require specific training and awareness programs, and being able to track completion of those programs efficiently is necessary. Some systems will even allow for those training courses to be accessible via the system.
- I-9 Management and Retention Rules: Compliance with I-9 requirements is strict and important to follow. A system with automated workflows and appropriate recordkeeping abilities is key.
- E-Verify: Government contracts and some states require employers to use E-Verify to confirm eligibility to work in the United States. A system that allows for automatic transfer of this information can lessen the administrative burden and reduce the risk of non-compliance.
Common Mistakes When Compliance Is Overlooked
Treating HRIS implementation as just another system setup, rather than as an important record of compliance, can lead to numerous problematic and even legal issues.
- Workflow Design: Generic workflows often overlook who should approve, receive, and act on key notifications, leading to inefficiencies, errors, and gaps in audit readiness.
- Audit Trail Configuration: Without proper audit trails, especially for project costing in timekeeping that flows to payroll, reporting on indirect rates and incurred costs can become inaccurate.
- System Integration Gaps: Disconnected modules create confusion, data inconsistencies, and user frustration across departments.
- Reporting Tools: Failing to fully utilize reporting features results in unnecessary manual workarounds and added costs after implementation and go-live.
What a Compliance-Ready HRIS Setup Looks Like
Setting up an HRIS to be compliance-ready from the beginning of implementation is the most beneficial way to start in a new system. This setup not only supports daily operations but also prepares your team for potential audit scenarios and future compliance needs.
To take this one step further, it’s important to understand that even with a compliance-ready setup, your system will only be as effective as the team managing it. Ongoing administration, clear ownership, and cross-functional coordination between HR, payroll, and compliance teams are essential. In our related article, Empower Your HR Team with Systems Built for Compliance and Efficiency, we dive deeper into the roles, responsibilities, and support structures that help ensure your HRIS continues to serve as a reliable foundation for compliance long after implementation.
If you aren’t confident that your system is compliant, your HRIS may not have been thoroughly built with your company’s needs in mind. Workflows and audit trails should be exactly as an auditor would expect.
Support for a Compliance-First Approach
At Redstone Government Consulting, Inc., we understand that government contractors need more than just an HR system that works; they need one that’s built to meet complex compliance requirements from the start. As an authorized UKG partner, we go beyond basic implementation. Our team provides a full-service approach that includes the sale, configuration, and ongoing support of UKG Ready, tailored specifically for the compliance demands of government contractors.
We work directly with clients to ensure system setups align with DCAA timekeeping standards, SCA compliance, OFCCP reporting, and other key requirements. Whether you are preparing for growth, setting up new locations, or facing audit scrutiny, our goal is to help you build a system that reduces risk, supports audit readiness, and strengthens the connection between compliance and daily operations.
