September 28, 2018 | Category: Compliance, What's Hot in HR

By Amy Matthews, SPHR

Compliance.

For a myriad of reasons, this is a word that gets mixed reactions from employers.

Some find it annoying – a necessary evil.  Forced to comply with all the rules and regulations because “The Man” says they must.

Others are leading the charge.

  • Current and accurate Labor and Safety postings?  Check.
  • Safety meetings and committees?  Check.
  • An employee handbook with up-to-date rules and regulations?  Check.

Other than the comfort of knowing your company is doing it right, what are some of the benefits of being compliant?

Statistically speaking, employees who work for a compliant company are happier and feel safer.  This reduces turnover – which is one of the costlier parts of doing business. Average turnover costs 6-9 months’ salary of the position being replaced.

Another benefit of being compliant is the positive branding it gives your business.  As we know, your employees are your internal customers. Every good word they speak about their experience with working for your company is good publicity.  This leads to a great circle of people who want to work for you and people who want to patronize you.  Win-Win.

Conversely, every complaint will bring the company down a notch – and these firsthand experiences can be insidious and difficult from which to recover.

The worker who fell off the ladder that was not safe and is out on workers compensation, earning only ¾ of his salary?  He is telling his friends, his doctor, and the insurance carrier how horrible you are. He may even get an attorney.  It’s like an adult game of telephone – the news just keeps spreading.

The bottom line figures in as well.  While we don’t want to be fear mongers, it’s hard to argue that non-compliance carries a hefty price tag when it comes to the fines.

Here are some common violations and the fines they carry:

I-9 (verification of a person’s right to work in the United States):

Failure to complete the I-9 form correctly (considered a technical violation) begins at $220 per mistake and can be as high as $1,862 per mistake. This means if you haven’t been filling out the dates on the I-9 correctly, and you have 25 employees, and all 25 have at least 2 errors, the least you will be fined is $11,000.

OSHA (Safety):

These violations are heftier. Willful violations are the worst kind, because it indicates that the employer knew that things were wrong, potentially dangerous, and did nothing to fix them.

   •  $12,675 maximum penalty per violation of serious or other-than-serious posting requirements.

   •  $12,675 maximum penalty per day for failure to abate, or failure to fix or improve, beyond the initial abatement date.

   •  $126,749 maximum penalty for willful or repeat violations.

Fortunately, you can avoid these fines simply by following the job site safety regulations that OSHA mandates.  It really is that easy.  Just follow the rules.

Wage and Hour:

Wage and hour are some of the most common violations and some of the easiest to prevent.  Classify your employees correctly (exempt or non-exempt).  Pay overtime when you should and pay on time.

Per the Nevada Office of the Labor Commissioner, depending on the claim, “… the Labor Commissioner can issue a binding decision ordering an employer to pay the employee unpaid wages. And if the employee sued the employer, the court can award not only back wages but also attorneys’ fees and possibly punitive damages.” Imagine one year of back pay, plus overtime, plus damages.  And then, because most of the agencies talk to each other, there might be some payroll taxes to deal with—and then you are also dealing with the IRS.

Best practice? Be compliant.

If you’re not sure whether your business is compliant, conduct an internal audit or have a third party conduct an audit.  Find out where your compliance holes are and fill them in. Regulatory agencies always appreciate the companies that have done their best and make an effort to provide a safe, legal and thriving workplace for their employees.