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Can you imagine having to pay a $50,000 fine?
Small business owners who receive a notice of penalty offenses from the Federal Trade Commission could face such a fine. The civil penalty can be as high as $46,517 for each violation.
The fine might seem extreme, but the high number is there to protect consumers. When companies learn that improper conduct isn’t profitable, it’ll persuade them to act more safely.
If you’re wondering about compliance regulations and how your company can adhere to them, this article is for you. We’ll go over exactly what these regulations are while also providing the best tips for maintaining them.
How can you avoid a compliance regulation penalty? Read on to find out.
What Is Regulatory Compliance?
What exactly is regulatory compliance in the first place? It’s a way of adhering to specific regulations, laws, and guidelines that the government sets for. Government legislation and regulatory bodies create industry-specific rules.
The specific industry and jurisdiction will affect how the regulations operate. Large corporations with global footprints have more physical regulations than internet-based businesses. An information technology firm would have to be up to date with all the latest cyber security compliance regulations.
The United States Compliance Regulations
In the United States, most compliance regulations are in place to protect the business and stakeholders. Compliance laws also help protect consumers from the harmful effects of doing business.
For instance, the financial industry is governed by the Dodd-Frank act’s overseeing body. The Dodd-Frank act helps with financial stability. It provides transparency in the accounting process.
Banks have to comply with speculative trading guidelines and properly manage investment activities. Reserve requirements also tighten up as a result of the Dodd-Frank act.
You probably also know of the health insurance portability and accountability act HIPAA. HIPAA is in place to help protect the data of individuals covered through health insurance organizations. HIPAA helps guide how medical professionals store and use personal medical information.
HIPAA is just a starting point for furthering a comprehensive cyber security regime. Other major regulatory agencies you should be aware of include the food and drug administration FDA. There’s also the occupational health and safety administration OSHA.
OSHA helps guide working conditions while also promoting safe working spaces. The FDA helps regulate companies that manufacture drugs, food products, and cosmetic products.
The FDA’s power extends out to the manufacturers of medical devices too. The Federal trade commission is an independent agency. They help enforce antitrust laws that are non-criminal.
Finally, the national institute of standards and technology NIST is a non-regulatory agency that helps the IT industry. The NIST helps set forth guidelines for operating in an IT role and handling data security.
Ever Moving Compliance Targets
As a business owner, you’re probably aware that the regulatory environment is always changing. That means that the compliance target never stays the same. Right, when you think you’ve achieved complete compliance, something will change, and you’ll have to tweak your approach.
Since your business needs to be flexible, you’ll have to find ways to quickly adapt. If you don’t, you can put yourself, your employees, and your overall organization at risk. When your company fails to comply, you open yourself up to all sorts of legal complications and financial liabilities.
Are you expanding globally? It’s worth your time to look into a 3rd party compliance company. Take a minute to find a PEO and check it out in the country you’ll be operating in. That way, you don’t miss any compliance regulations.
Reputation Building Tool
Compliance will lay the foundation on that you can build your company’s stellar reputation. Unfortunately, all it takes is one compliance mistake, and you could break the trust you built up over the past few years. By skipping even the simplest compliance regulation, you might lose access to certain parts of your customer base.
If your company violated HIPAA regulations, certain insurance companies might not be willing to work with you. It’s also important to think of the time that your business will need to spend fixing a compliance violation.
If there’s a cyber security breach, think of all the damage it could do. The hours it would take to reassure your customers that their data is safe, and the expense of hiring more IT professionals. Instead of giving yourself a surprise bill and an added risk, stay compliant throughout the entire year.
Importance of Compliance Audits
One of the best ways to ensure that your company is staying compliant is by performing a compliance audit. It’s a good idea to schedule compliance audits on a regular basis.
Audits will be able to bring to light any areas of improvement or gaps in your compliance plan. It’s a good idea to announce regular compliance audits.
However, conducting a few unannounced audits is also a wise move. As far as scheduling goes, plan on having at least two announced and two unannounced audits throughout the year.
You can also use tools and software to help simplify your compliance procedures. Just make sure that the software you choose is up to date and accurate for your locality.
For instance, if you live in Massachusetts, you’ll want payroll software that adheres to the paid family and medical leave plan in Massachusetts. Your software can automatically deduct the specific amount of taxes for each employee. In the same line of thinking, your software should also reflect the latest policies of your current legislation.
Stay Worry-Free With Regulation Compliance
There you have it! The top tips for staying up to date with regulation compliance standards. When you go above and beyond to meet compliance regulations, you can rest assured that your company is safe.
Since scheduling a compliance audit is one of the strongest ways to see how your company is doing, go ahead and plan one today. Pick a time during the next month that you can have an announced or unannounced compliance audit. For more ways to stay safe, read another one of our articles.