HR Compliance – Take Your Medicine or Stay Healthy?
Often times, when I mention HR Compliance to my clients, they get a look like they just swallowed some awful medicine. I know it’s not always fun to think about, but making sure your business operates within required laws and regulations is very important to the long term health of an organization. Taking on too much risk by avoiding or ignoring compliance requirements can devastate the business you have worked so hard to build.
Case in point: A business owner recently called me in a panic. He had received a complaint from the Wage and Hour Division of the Department of Labor. The letter claimed that his company owed back pay to an employee because the employee had not been correctly classified as a non-exempt (hourly) employee. To make a long story short, the company did not have a process for regularly reviewing job classifications and indeed had misclassified this particular employee.
The result? The employer had to pay 14 months of back pay and a hefty fine. On top of that, the employer is now subject to regular audits to ensure ongoing compliance. Imagine the blow to the bottom line, not to mention the hassle with all of those audits! My client put it well. He said, “Diane, do you know how much I have to sell to make up for those payments?”
This is a great time of year to get your compliance house in order. Perhaps one of your team members has some downtime during the holidays and could take this on as a project. With the right tools and guidance, you can build a program that will work for you and help you avoid the risks that can impact your profitability and reputation.
Rather than taking “the medicine”, focus on your HR wellness and put in place the processes that will make HR Compliance less of a hassle and just part of how you do business. Invest the time now and enjoy some peace of mind in the coming year.
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