As an employer or a business owner, neglecting your business compliance is a big mistake. Your company reputation and profitability is at risk if you company is sued for non-compliance. Regardless of your business size, keep in mind that most compliance laws and regulations in place are all businesses.
Definition of Corporate & Business Compliance
According to Business Directory, corporate and business compliance means:
“The certification or confirmation that the doer of an action (such as the writer of an audit report), or the manufacturer or supplier of a product, meets the requirements of accepted practices, legislation, prescribed rules and regulations, specified standards, or the terms of a contract. “
Even thought the definition looks simple enough, remaining complaint is not always easy. Listed below are the 5 most common corporate and business compliance issues.
Top 5 Most Common Corporate Compliance Issues
1. Not staying up-to-date
One of the most common mistakes business leaders make is a simple failure to keep up with the many regulatory agencies and rulings that govern the organization. Over the years, the number of employment laws has significantly increased and many existing ones have been updated.
Here is a list of the most common policies that you should always keep current with:
- Sick leave policies
- Employee privacy laws
- Hiring regulations, such as “ban the box” rules
- Workplace safety and health laws
- Payday laws, such as final pay rules and payroll deduction rules
- Record-keeping requirements
- Overtime pay laws
- Anti-discrimination and anti-harassment laws
- Local, state and federal family leave laws
2. Wrong employee classification
Should an employee be paid a salary or hourly? This is by far the most common classification dilemma faced by businesses. The Department of Labor has very specific rules and guidelines to help any business identify whether an employee should be declared exempt (not paid overtime) or non-exempt (paid overtime.
Depending on where your business is around the globe, you may want to double check with the regulating authority how to properly classify your employees. This is an essential step, as record keeping of attendance, duties and pay rate will differ according to the employee’s status.
3. Dodging safety regulations
As mentioned before, many small businesses may not realize that most safety and regulations apply to businesses of all sizes. It is essential you review the Occupational Safety and Health Association of your region to ensure your business environment is risk-free.
Communicating safety rules is also very important – your staff must be made aware of all regulations and safety measures / practices pertaining to their job. Safety rules can be communicated both verbally and in writing, and often requires a ‘Read & Approved’ signature from the employees.
4. Handling hiring paperwork incorrectly
While this may sound as a simple task, properly filling in the required paperwork is often neglected. In many cases, employees fail to provide supporting documents required – mainly due to the fact that many employers fail to inform them of what is acceptable or required.
The best way to avoid this is by providing your new recruits a list of all acceptable documents and deadlines to properly complete all paperwork.
5. Failing to keep up with rapid growth
Rapid growth is often seen as a blessing for many businesses. Yet, it can turn into a compliance nightmare if you fail to properly keep up. Always keep in mind that the more employees you have on-board, the greater compliance exposure.
Unfortunately, one common example of fast expanding companies trying to ‘dodge’ compliance laws is when they are reaching the 50 employee mark. Certain employers are tempted to reclassify some employees as independent contractors so as to avoid the costs of complying to the Affordable Care Act. The risks of getting caught and sued is simply not worth it, especially considering that the penalties incurred could highly damage a company’s reputation, finance and ability to hire new employees.
Corporate Compliance – Final Thoughts
Never wait until your business runs into legal issues to set forward a proper corporate compliance program. The key element here is to always keep up with the ever-changing laws and regulations. Play by the rules, revise your policies and always ensure you have the proper structure and documents at hand. Laws and regulations differ from country to country, but it is not an excuse to limit you expansion across the globe.
Are you expanding to Africa?
If you are looking for a Professional Employer Organization (PEO) that will ensure your business is fully compliant on the African continent, Africa HR Solutions can help you. We cover over 48 countries in Africa and safeguard your company against all compliance issues.