Taking steps to meet your legal obligations might seem like
a management no-brainer, but only fulfilling your minimum requirements might
result in missed opportunities. Understanding the reasons for the various
rules, laws and regulations that govern your business will help you take
advantage of any benefits they offer while ensuring you stay in compliance at
all times.
Compliance Demands Grow with Your
Business
In its business sense, “compliance” refers to a company
meeting its legal obligations, often to protect the health, safety and welfare
of others. Simple examples of compliance include obtaining a business license
in your town and paying your taxes. The importance of compliance is more
evident as issues become more complex when your business grows. You will have
expanded responsibilities regarding your workers, covering hiring, firing,
discrimination, harassment, safety, wages, payroll and benefits. The way you
make and sell your product and service might fall under the auspices of a
government agency, such as a restaurant needing to meet health department
guidelines.
Reduced Legal Problems
The most obvious consequence of compliance is that it
decreases your risk of fines, penalties, work stoppages, lawsuits or a shutdown
of your business. When you don’t meet some compliance requirements, such as
posting an employment poster in the wrong area of your office, you might get a
warning and a chance to correct the problem. In other situations, you might
face costly sanctions. Failing to meet your legal obligations, such as in your
manufacturing procedures or advertising methods, can also help someone suing
you strengthen his case. Hire a compliance expert to make sure you understand
all of your legal obligations and how to comply with them.
Improved Operations and Safety
Many business rules and regulations can help you more than
harm you. For example, rules regarding discrimination and harassment help you
create a better working environment for your employees, which can lead to more
worker productivity. Following safety and security rules helps prevent
injuries, fires or building evacuations that hurt your profitability. In
addition to learning the bare minimum you need to do to meet your legal
obligations, review suggested business practices at the websites of such
agencies as the U.S. Occupational Safety and Health Administration and U.S.
Equal Employment Opportunity Commission to learn more ways to strengthen and
safeguard your company’s operations.
Better Public Relations
When you meet your legal obligations, one of the benefits of
compliance is the ability to tout these on your website and in your marketing
materials. For example, when you place job advertisements, include the fact
that you are an equal opportunity employer. If you post your mission statement
on your website, state that you do not discriminate based on race, sex, creed
or sexual orientation. When you recruit new workers, highlight your company's
commitment to both physical safety and mental health by referencing key
policies and benefits dedicated to proactive healthcare and wellbeing, such as
extended maternity and paternity leave or free gym memberships.
Higher Employee Retention
Many business compliance issues deal with protecting
employees. The more employees feel they work in a fair, professional and safe environment,
the more likely they will be to stay with you. Even if you don’t harass or
discriminate against any employees, if you don’t take steps to ensure none of
your employees do, you can lose valuable workers. Include policies and
procedures in your employee handbook that mirror your legal compliance
obligations. Remember, a policy is only strong if it is enforced. Your policy
should not only present the rules but also specify the procedure for dealing
with infractions, such as a reprimand and additional training on a first
infraction and suspension or termination for a second. Check in with middle
managers or supervisors regularly to ensure complaints are handled properly.
References (2)
Resources (3)
- Small Business Administration: Understand Business Law & Regulations
- Occupational Safety and Health Administration: Small Business
- Federal Communications Commissions: Compliance Guides for Small Businesses
About the Author
Sam Ashe-Edmunds has been writing and lecturing for decades.
He has worked in the corporate and nonprofit arenas as a C-Suite executive,
serving on several nonprofit boards. He is an internationally traveled sport
science writer and lecturer. He has been published in print publications such
as Entrepreneur, Tennis, SI for Kids, Chicago Tribune, Sacramento Bee, and on
websites such Smart-Healthy-Living.net, SmartyCents and Youthletic. Edmunds has
a bachelor's degree in journalism.
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