• Sun. Sep 26th, 2021

Why Small Businesses Need a Compliance Policy

ByJordan-Lee Valenzuela

Feb 11, 2021
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Business compliance is a general industry term meaning how well a business follows the applicable rules and laws governing its particular industry. Yet no one starts a business simply to become an employer. Nor is it an easy task to just hire people, let them do their job, collect the money, and then get out of the way. More importantly, in the ever-changing business world, entrepreneurs find themselves at crossroads often. Are they staying within the laws and taking the necessary steps to stay in business or are they starting a new company, one that may fall afoul of government regulation one day?

 

To avoid losing customers and erring on the path of regulation,

businesses compliance as a serviceĀ  must always be mindful of the line that they are setting. For example, many restaurants are careful not to put anything on the menu that is considered “Illegal” in many jurisdictions. Yet such foods are a staple of many cuisines. Likewise, businesses should be aware that when it comes to purchasing machinery and equipment that will make them effective, regulations can often be overlooked. This can lead to serious problems, such as equipment malfunction, costly fines, and, in some cases, prosecution.

 

In addition, some business compliance issues tend to be more subjective, as the laws of one area can differ from those of another. For example, it’s not always illegal to discriminate against employees, yet some businesses have been sued for doing so. In some cases, it may be the case that the only way to comply with all laws and regulations is to go the extra step and hire an attorney. Yet such actions are not without consequences, such as facing fines and the possibility of jail time.

 

Businesses must know the applicable laws, regulations, and requirements for doing business in every locale and jurisdiction. A good standing in any one place is important. Yet business compliance requirements are not always easy to identify. Some business laws can even vary by jurisdiction and even by county. To make matters worse, local courts tend to let employers fight for their rights without giving them any help, such as when workers bring claims against companies for violations of employment discrimination.

 

For these reasons, organizations need to consult with experienced attorneys and legal firms

that specialize in business compliance requirements. These firms can provide information on what state, local, and even federal regulations are meant to protect employees, consumers, and the environment. In addition, such firms can review and interpret documents related to payroll taxes, franchise tax, and other types of licensing and permitting. Additionally, they can provide assistance with internal requirements such as food and drug safety compliance, reporting requirements, and anti-money laundering regulations.

 

It’s always best to start thinking about compliance with local, state, and federal laws from the very beginning of the business operations. Without knowledge of, access to, and understanding of the applicable laws, businesses risk running afoul of local, state, and federal regulations, and then suffering penalties if those laws are violated. Indeed, some regulations are not easy to understand or follow! This is why attorneys can be so helpful – they can help businesses determine which laws apply to their specific situation and then negotiate with agencies or the government on behalf of their clients to ensure that their interests are protected.

 

  • Additionally, such firms can help with implementing or revising employee handbooks, setting up an e-mail messaging system, writing operating procedures, and handling all the paperwork associated with filing government forms.
  • Businesses can also contact them if they have questions about health benefits, Medicaid and other federal or state programs.
  • Small businesses may also contact them if they have concerns about complying with regulations related to Title 17, the Sarbanes-Oxley Act, or other statutes.

Lastly, many business compliance firms can provide consulting services to help small businesses get ready for state licensing exams, such as those required for food service businesses and certain types of manufacturers and distributors.

 

As previously mentioned, there are a variety of options available when it comes to complying with local, state, and federal regulations. As more businesses open their doors, they will face stiffer penalties if they are unable to meet compliance standards. While fines may not seem like a very big money spent, over the course of several years those fines add up. With this in mind, many new businesses simply don’t have the cash on hand to spend on hefty compliance fees. However, hiring a firm that provides solid legal compliance advice can help to resolve these kinds of issues, so that businesses can continue to operate as they should.