Costly HR compliance mistakes to avoid: Insights from our experts

Compliance may not be the flashiest part of HR, but it’s one of the most powerful—and crucial. Handled well, it’s a foundation for operational excellence. Handled poorly, it’s a threat to your business—from delayed growth plans to reputational damage, lawsuits, drained resources, and other potential consequences.

In a recent webinar, “Costly HR Compliance Mistakes to Avoid,” Alena Vlasova—SHRM-certified HR expert and member of Rippling’s HR Advisory Team—shared the real risks of noncompliance and how companies can move from reactive firefighting to confident, scalable HR operations. With over a decade of experience helping companies grow, Alena knows exactly where organizations go wrong on compliance—and what it takes to get it right.

Whether you’re hiring in new states, scaling your organization, or just trying to keep up with changing laws, here’s what Alena wants every HR leader to know.

Compliance that scales: 5 ways to turn risk into resilience

According to Alena, the most successful companies see compliance not as overhead, but as a strategic enabler that unlocks speed, trust, and scale.

Here are five key takeaways from our webinar to help you reframe compliance as a business driver—and avoid costly missteps that hold so many companies back.

1. Rethink compliance as a growth strategy, not a box to check 

Compliance touches every corner of your business—from how you hire and onboard to how you promote, offboard, and manage risk. Instead of thinking of it as paperwork, think of it as infrastructure. Just like clean financials give investors confidence, clean compliance gives your business room to grow. 

It directly impacts your ability to:

• Attract and retain top talent by building trust through transparent, equitable policies
• Deliver a consistent, high-quality employee experience across teams and locations
• Expand into new states and countries without running into costly registration delays or penalties

With the right tools and guidance, you can put compliance on autopilot, which gives your HR teams more time to focus on strategic initiatives—like improving engagement, supporting leadership, and driving retention.

2. Prioritize compliance at the riskiest employee lifecycle moments 

Compliance isn’t a one-time task. It’s a series of critical touchpoints embedded throughout the employee lifecycle—some of which carry more risk than others. Alena highlighted four high-risk moments HR teams should pay particular attention to:

1. Hiring in new states: Especially California, New York, and Colorado, where employment laws are stricter and more nuanced.
2. Managing employee performance: This is often where legal claims arise if documentation and processes aren’t handled correctly.
3. Offboarding: Final pay, PTO payouts, and termination documentation all need to be accurate and timely to avoid penalties.
4. Setting up leave policies: These vary widely by state, and are often misunderstood or inconsistently applied.

This is where Alena and the HR Advisory Team spend most of their time helping clients: new state tax registration, Employment Practices Liability Insurance (EPLI) policies, leave law interpretation, and more. The goal? Take the guesswork out of these sensitive moments so HR teams can operate with confidence.

3. See compliance through a broader lens

Many companies think of compliance purely in legal terms. But as Alena pointed out, there are three perspectives through which she urges companies to look at compliance to up their resilience:

• Legal: Are you meeting all state and federal requirements?
• Cultural: Do your policies reflect your values and foster trust across diverse teams?
• Operational: Who owns compliance, and do they have the time, systems, and expertise to manage it well?

Taking this sort of holistic approach reduces risk, but it also increases alignment across the company. It helps you build policies that are scalable, inclusive, and designed to support—not stifle—growth.

Additionally, there are three common pitfalls that Alena sees across customers: 

• Wasting time on manual, duplicative processes
• Missing growth opportunities because HR is stuck chasing down forms and deadlines
• Incurring preventable penalties, like the $1.1 million Estée Lauder paid to settle a parental leave case

With the right systems and support, you can stop thinking of compliance as a blocker—and start using it as a framework for better decision-making and faster execution.

4. Update your handbook and training before laws change—not after

Laws change constantly, yet employee handbooks and required trainings are often treated like static documents. In today’s regulatory environment, they need to be dynamic and adaptable. 

“Every company needs to have clear policies around things like remote work and time off,” Alena said. “These policies need to evolve with ever-changing laws and company culture.”

Alena shared the story of a customer struggling to build a handbook that complied with multi-state employment laws. Instead of hiring expensive external counsel, they used Mineral (a tool offered through Rippling HR Services), which gave them editable templates, built-in policy guidance, and real-time alerts for regulation changes. They built a compliant handbook in minutes and saved thousands in the process.

Training is another often-overlooked area. Many states require anti-harassment, safety, and other compliance trainings, and the requirements vary by state and employee type. Rippling can help streamline that process, too.

“I recently worked with a team that was struggling to keep up with all the mandatory employee training requirements across different states,” Alena said. “I helped them roll out ready‑made course bundles to meet mandatory requirements. Rippling can recommend course enrollments based on employee work location—and lets you track progress and completion rates, so you can set it and forget it. It was a big time saver.”

Whether it’s a handbook, a training module, or a policy update, the key is staying ahead of the curve. You don’t want to be the company playing catch-up after the law changes.

5. Choose the right compliance model to support your business 

You don’t need to navigate compliance alone—and there’s no one-size-fits-all solution for managing HR compliance. Choosing the right model matters, and Alena outlined four common approaches:

• DIY: Requires diligent checklists and constant research. This is risky without expertise. Turning to Google or ChatGPT might seem convenient, but it’s a huge time suck and doesn’t always give you the most accurate, up-to-date information. It can also be difficult to decipher all of the requirements on your own without guidance. If you’re going solo, set up strong checklists, make sure you have appropriate documentation, and use software to streamline things where you can. 
• Hiring internally: This can be effective but expensive. Consider your company’s size and needs. If you’re going to hire, you’ll want someone based on your company’s growth stage and what you’re solving for. If you have a small team, you may want a jack of all trades generalist who can create policies, administer leave, and handle recruiting. 
• Consulting lawyers: Valuable but costly—especially without local law expertise. The risk is that not all lawyers have expertise in US employment law. 
• Using an HR services partner: This is where you get end-to-end HR and compliance support, so you can focus on your business and minimize risk and penalties. Rippling customer Hovercraft reclaimed 30+ hours per week by offloading compliance tasks—time they reinvested into growth and retention strategies.

No matter what path you choose, the takeaway is this: Don't wait for a problem to invest in prevention. The cost of getting it wrong—both financially and reputationally—is far greater than the cost of getting it right. As Alena puts it, “Compliance isn’t just a legal requirement—it’s a strategic advantage when handled proactively and effectively.” 

Take HR and compliance off your plate 

If compliance is eating up your time—or keeping you up at night—it’s time to get the right support in place. Watch the full webinar recording, and if you’d like a personalized demo on how Rippling can support your HR and compliance goals, book a meeting with one of our HR Services advisors today.

This blog is based on information available to Rippling as of May 2, 2025.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.