How Businesses Can Survive and Thrive as the Regulatory Environment Becomes more Complex
Not too long ago, I came across a news article that really hit home. The topic was the regulatory environment that modern businesses face and how it stymies both small business success and the economy. According to a 2010 report cited in the article, “the per employee cost of federal regulatory compliance was $10,585 for businesses with 19 or fewer employees, compared with $7,755 for companies of 500 employees or more.” In other words, America’s small businesses are bearing over 36 percent more of the financial burden of regulatory compliance than their large counterparts.
The article resonated with me because I have a front-row seat to observing the impact of government regulations on the thousands of small to midsize businesses my company serves. I believe that regardless of the election outcome, the next four years will be difficult for small businesses.
At TriNet, we speak to business owners and managers who need to keep overhead low while optimizing revenue. However, these businesses also wrestle with ongoing compliance obligations. If you face the same challenges, then I want to share with you my three best tips for managing some of the most burdensome business regulations, while keeping your sanity and still driving business success.
Don’t Cut Corners
When it comes to following the law, taking shortcuts may save you a few dollars now but will cost you big time in the long run. Following this advice is difficult because some laws are so confusing to the average business owner that missteps are almost inevitable. It’s probably not surprising that the most common area where I see this reality play out is with the Affordable Care Act (ACA).
Take, for instance, the recent mess Dave & Buster’s is in over allegedly trying to sidestep the ACA. If they can find themselves in court for reducing employees’ hours to avoid offering benefits, it can definitely happen to you. The risk is great and it isn’t worth taking.
Keep in mind that business regulations were created to protect people – be they employees, customers or the general public. Lean toward being overly cautious with taking care of your employees. In particular, make sure that:
- If you offer benefits, they meet the requirements of the ACA.
- You are very careful to classify employees correctly as exempt or non-exempt. Be certain their job duties really match their status. If they’re entitled to overtime, make sure they are receiving it.
It is critical that you ensure your employees and customers are happy, supported and taken care of by your company. Happy employees are loyal employees and they create happy customers. These steps aren’t just important to maintaining business compliance; they are key to building a strong business.
Keep Detailed Records
My HR expert colleagues are constantly advising our clients to write everything down. Anytime you take disciplinary action with an employee, create or change an internal policy, or make any legally required move on behalf of your business, keep a detailed record and give a copy to all affected parties. Perform your due diligence to make sure your vendors are also recording everything. Keep electronic or paper copies of anything they do on your behalf and document their activities as needed. Should you ever find yourself on the wrong side of a legal issue, you’ll be glad you have this paper trail.
Speaking of a paper trail, organization, data backup and efficiency are all vital to juggling a mountain of regulations while growing your business. User-friendly, cloud-based HR solutions help you streamline, track and report on your business’s most important HR compliance needs. If you are managing your company’s important files and legal documents on a desktop computer, in outdated software or – worse – in file cabinets, please do yourself a favor and make the investment in the reliable business technology you deserve.
In closing, I can understand if thinking about all these regulations is making your head spin. You want to focus on running your business. I encourage you to explore working with a professional HR services provider to help you stay on top of changing regulations, manage risk and do the burdensome work of keeping you compliant. The investment can make your life easier and can save your company from the time-consuming and expensive ramifications of compliance violations.
This communication is for informational purposes only; it is not legal, tax or accounting advice.