Although compliance is tough to navigate, the consequences of being noncompliant can be more difficult than properly adhering to federal and state regulations. In fact, compliance tends to be more than just a requirement; noncompliance can cause significant damage to your bottom line.
What Does Compliance Really Mean?
Compliance is an all-encompassing term that governs everything your business is expected to do in the eyes of the local, state, and federal government. Companies are required to adhere to minimum specifications as they relate to many aspects, including the following:
- Workplace Safety
- Posting Notices
Noncompliance in Hiring and Firing
The interview process can be cumbersome for people who aren’t well versed in this area. As an interviewer, there are many questions you’re not permitted to ask. If you inquire about an applicant’s religion or marital status, for example, you could subject yourself to lawsuits and penalties as these questions could be considered discriminatory. Compensatory and punitive damages alone range up to $300,000 per employee, but the damage to your reputation could be far more outreaching.
Wrongful termination can have the same consequences. When done improperly, the firing process can cost you tens of thousands of dollars in legal fees and restitution should the ex-employee bring a case against your company for firing based on protected status. It’s important to document poor performance, listen to all applicable objections, and abide by the laws set forth for your business.
When it comes to hiring and firing employees, companies are subject to many regulations. A misstep in can land you in court, facing any number of costly consequences.
Noncompliance in Payroll
Overtime can be a significant burden to bear, but if your employees are eligible and working the required amount, you must pay them accordingly for hours worked. To exemplify the outstanding need for payroll compliance, consider a case from New York City, whereby a restaurant chain was ordered to pay nearly $1 million in back wages and damages as a result of noncompliance with overtime regulations.
Whether it’s overtime, minimum wage, or compensation related to the difference between exempt and non-exempt employees, it’s critical to remain in compliance with payroll regulations for municipalities, states and federally. People are watching their paychecks, and they’ll readily seek remedies when things aren’t being calculated correctly.
Noncompliance in Workplace Safety
Workplace safety comes in many different forms—for example, your team needs to have proper protective gear if your business operates a laboratory, kitchen, or manufacturing facility, and you need to have proper workers’ comp insurance in place in case an accident does occur.
OSHA is just of the many entities that can impose crippling fines if you’re not in compliance with workplace safety regulations. OSHA’s penalties alone range from $12,675 to $126,749 per violation and is likely to find multiple violations if it finds one.
Noncompliance in Licensing and Signage
Depending on the type of business you operate, your employees may require certain licenses to distribute certain goods and services, such as alcohol, tobacco, and firearms. These certifications must be clearly posted and in plain view.
Beyond this, the Department of Labor, as well as state entities, require certain posters to be easily accessible to all employees. Failure to post this signage in a clearly visible spot can result in monetary fines.
Keeping Ahead of Compliance Issues
HR and compliance can be difficult to keep up with, however with Insight you can have a team of human resource pros at your fingertips, ready to walk you through even the toughest of situations. For small businesses, outsourcing can be an excellent solution. With subscription-based services such as HR. Solved.SM, leaders can know they’ve checked all the boxes necessary to meet compliance and keep their employees safe.
Are you concerned about compliance? You don’t want to learn the hard way that you’ve breached your obligations. Reach out to our Insight Performance team, and learn how our professional HR services can give you peace of mind.