HR Compliance Software: What It Covers, What It Doesn't, and 5 Tools for Small Businesses
Table of Contents
This guide is general information for US small businesses, not legal advice. Employment rules vary by state and city, so check anything that affects a specific decision with an employment lawyer or the agency that enforces the rule.
HR compliance software helps you keep the records, approvals and documents that employment laws require, and shows you when something is missing. But "HR compliance software" covers very different products. Some write your handbook and send legal updates. Some are the HR system where your employee records live. Some run payroll and file your taxes. Most small businesses need one of the second or third type, plus a reliable source of legal updates.
This guide explains the three types, lists the federal records a US small business has to keep at each headcount, and compares five tools by price and by what they do and don't cover.
What is HR compliance software?
HR compliance software is any tool that helps an employer meet employment-law obligations: keeping required records, following the right process for hiring, leave, pay and termination, and producing documents when an auditor, agency or former employee asks for them.
In practice, products fall into three groups:
Type | What it does | Examples | What it usually doesn't do |
|---|---|---|---|
Compliance content tools | Handbooks, policies, state-law libraries, legal update alerts, labor-law posters | SixFifty, Mineral, ComplianceHR | Store employee records, track time or leave, run payroll |
HR systems of record (HRIS) | Employee records, documents, permissions, leave, attendance, approvals, change history | BambooHR, Rippling, Payrun | Write policies or track law changes for you (some add this as an extra) |
Payroll with tax filing | Pay calculation, payroll tax filing, new-hire reporting, I-9 add-ons | Gusto, ADP | Deep HR records or policy content (varies by plan) |
The most common mistake is buying a content tool and expecting it to hold your records, or buying an HRIS and expecting it to tell you when your state's paid sick leave rules change.
Which US employment records do small businesses have to keep?
Federal obligations depend on headcount. State and local rules add more (paid sick leave, pay transparency, final-pay deadlines), so treat this as the federal floor.
Requirement | Applies from | What you keep | How long | Source |
|---|---|---|---|---|
Form I-9 (employment eligibility) | 1 employee | Completed I-9 for every hire | 3 years after hire or 1 year after employment ends, whichever is later | |
FLSA wage and hour records | Most employers | Pay, hours worked, rate, deductions | Payroll records 3 years; time cards and wage-rate tables 2 years | |
Personnel and hiring records (Title VII, ADA) | 15 employees | Applications, hiring, promotion, discipline and termination records | 1 year from the record or the action | |
FMLA leave records | 50 employees | Leave taken, dates, hours, notices, disputes | 3 years | |
OSHA injury and illness log (Form 300) | More than 10 employees, outside partially exempt industries | Recordable injuries and illnesses | 5 years after the year covered | |
ACA employer reporting (Forms 1094-C/1095-C) | 50 full-time equivalents | Health coverage offers and enrollment | Per IRS record rules | |
EEO-1 report | 100 employees (50 for some federal contractors) | Workforce demographic data, filed annually | Annual filing |
Two practical points: retention periods are minimums, and many states require longer. And for most of these, the problem in an audit isn't the policy, it's the record: who was hired, what they were paid, what leave they took and who approved it.
If you're preparing for a review, our HR compliance audit checklist walks through it step by step.
What features matter in HR compliance software
Match features to the records above rather than to a vendor's feature list:
- One employee record with status, department, job title, start and end dates, and documents, so I-9s, contracts and personnel files live in one place.
- Roles and permissions, so managers, HR and payroll see only what they need. Personnel and medical records shouldn't be open to everyone.
- Change history or activity log that shows what changed, when and by whom. This is what answers "who approved this?" in an audit.
- Time and attendance records with approvals, which cover the FLSA hours-worked requirement.
- Leave types, balances and approvals, which cover FMLA and state leave records. See our guide to tracking employee leave.
- Payroll records and approvals, and, if you're in the US, tax filing (from your HRIS or a payroll provider).
- Retention and export, so you can keep records for the required period and hand them over quickly.
- Legal updates and policy templates, if you don't have an HR advisor or employment lawyer. This usually means a content tool or an add-on.
5 HR compliance software options for small businesses, compared
Prices are from each vendor's public pricing page on 22 October 2026. They change, so check before you buy. Payrun is our own product; we list its limits alongside its strengths.
Tool | Type | Starting price | Free plan / trial | Strongest for | Not included |
|---|---|---|---|---|---|
HRIS (records, leave, attendance, payroll) | Free up to 5 users; then $4.95/user/month (annual) | Free plan; 14-day trial | Keeping records, approvals and change history in one place on a small budget | Legal updates, handbooks, e-signature, US payroll tax filing | |
HRIS | $10/employee/month, or $250/month flat up to 25 employees (Core) | Not listed | Established HRIS with compliance templates and training on higher plans | Payroll is a separate add-on | |
Payroll with tax filing | $49/month + $6/person (Simple) | – | US payroll and tax filing; I-9 and E-Verify add-ons | HR guidance and tools included only on Premium ($180/month + $22/person) | |
HRIS + IT + finance | From $8/employee/month plus a base fee (quote) | – | Companies that want HR, IT and payroll in one platform | Exact price needs a quote | |
Compliance content | $56/month (up to 100 employees, 1 state) | 7-day trial | Handbooks, policies, state-law updates, posters | Employee records, time, leave, payroll |
Payrun
Payrun keeps employee records, leave, attendance and payroll in one system. Employee status, department and job title are part of each record, profile and role changes are kept in the employee's history, and an activity log shows what changed across the workspace and when. Roles and permissions control who can see and change what. Time logs and leave requests go through approvals, IP tracking shows whether time is logged from your approved office networks, and payroll has its own approval step. There's a free plan for up to 5 users, and paid plans start at $4.95 per user per month billed annually.
Limits: Payrun doesn't send legal updates, write policies or handbooks, or include e-signature. Payroll is on the Pro and Ultimate plans, and Payrun does not file US payroll taxes. If you need those, pair it with a content tool and a payroll provider.
BambooHR
BambooHR is a long-established HRIS. Its Core plan includes compliance templates and guides plus one compliance training course; higher plans add more training. Pricing is published: per employee, or a flat monthly fee for up to 25 employees. Payroll and benefits are US-only add-ons.
Gusto
Gusto is best known for US payroll: it files federal, state and local payroll taxes. Remote I-9 and E-Verify are pay-per-use add-ons on the Simple and Plus plans, and HR guidance is included on Premium. A good fit if payroll tax compliance is your biggest risk.
Rippling
Rippling combines HR, IT (devices and app access) and finance. It's priced per employee plus a monthly base fee, and you need a quote for the exact price. It suits growing companies that want one platform and are comfortable with a quote-based purchase.
SixFifty
SixFifty is a compliance content tool, not an HR system. It builds multi-state handbooks and hiring and separation documents, sends legal update alerts and supplies digital labor-law posters. It doesn't store employee records or track time and leave, so most small businesses use it alongside an HRIS.
How to choose
- Under 15 employees, one state: an HRIS with a free or low-cost plan for records and leave, and a payroll provider that files taxes. Add policy templates when you write your first handbook.
- 15 to 50 employees: Title VII and ADA record rules now apply. Prioritize permissions, change history and documented approvals. Consider a content tool if you have no HR advisor.
- 50+ employees or several states: FMLA and ACA reporting apply, and state rules multiply. Look for multi-state payroll, leave tracking that handles FMLA, and a reliable source of state-law updates.
- If US payroll tax filing is the risk: start with a payroll provider (Gusto, ADP) and connect it to your HR records.
When spreadsheets stop being enough
Spreadsheets work for a handful of people. They break down when more than one person edits records, when you need to prove who approved a timesheet or leave request, or when you have to produce several years of records quickly. If you can't answer "who changed this, and when?" from your current setup, it's time to move records into a system with permissions and a change history.
Related guides: employee record management system, employee compliance tracking, payroll compliance software.
