The Common Compliance Mistakes That Could Cost Your Business Thousands
Table Of Contents
- Common Compliance Mistakes: What Does The Term Mean?
- What Are Some Common Compliance Mistakes That Affect Businesses For The Worse?
- 1. Employment Misclassification
- 2. Not Tracking Or Reporting Work Hours Properly
- 3. Not Handling Employee Benefits Correctly
- 4. Late Or Incorrect Payroll Tax Filing
- 5. Ignoring Workplace Safety Requirements
- 6. Relying On Outdated Policies
- Don’t Repeat These Common Compliance Mistakes
I certainly do not doubt that running a business comes with numerous responsibilities and both short-term and long-term tasks.
So many things you have to do on a daily basis to have the operations running smoothly,
However, there are also monthly, quarterly, and yearly goals to consider when striving for success.
Read more about what it is that you may want to do in order to succeed in business.
Anyway, as I mentioned, numerous responsibilities and obligations come with being a business owner.
Some of those are quite prominent, that is, often talked about, so there is no chance for you to forget or ignore them.
Others, however, are not always visible or discussed, which is why many business owners tend to overlook them.
up until realizing that they’ve made a mistake, and that they potentially have to pay some seriously large fines due to that.
To cut to the chase, compliance obligations are among the most critical business responsibilities, yet they are often overlooked for one reason or another.
That can, clearly, lead to fines, and to you suffering a financial loss that could have been avoided if you simply did things the right way in the first place.
Since you most likely don’t want this to happen, what you should do is get familiar with some of the compliance mistakes that could cost your business thousands, and then do your best to avoid them.
Common Compliance Mistakes: What Does The Term Mean?
i will explain this in simple terms. Compliance issues arise when a business or organization fails to meet legal, regulatory, industry, or internal policy standards.
These problems can range from small mistakes to serious violations. They may result in large fines, damage to the organization’s reputation, or even criminal charges.
What Are Some Common Compliance Mistakes That Affect Businesses For The Worse?
Compliance issues arise when organizations fail to adhere to laws, regulations, or their own internal rules.
These violations can harm a company’s reputation, affect its operations, and hinder its ability to do business effectively.
In serious cases, failing to follow the rules may result in significant fines, penalties, or even shutdowns.
Below, I will list some of those to help you get a better understanding of all of this.
1. Employment Misclassification
It is, unfortunately, not uncommon for businesses to misclassify employees as independent contractors, and that can be one of the most expensive mistakes you can make.
Of course, this is not something you will do intentionally, but it can happen, especially if you are a startup relying on freelancers.
Yet, misclassifying employees can lead to penalties, back taxes, as well as lawsuits from those employees, since they’ll be looking for benefits they are denied.
What can you do to avoid this kind of scenario? Well, in addition to trying to check and do all the classifications on your own carefully, you should take a look at PEOcosts.com and find the right professionals that will provide you with fairly priced PEO services.
What I mean by this is that you will be able to outsource this part of your business.
Furthermore, you will also allow a PEO to handle hiring, payroll, HR in general, and any other tasks that require assistance.
This is sure to result in staying in compliance and avoiding costly mistakes.
2. Not Tracking Or Reporting Work Hours Properly
If you are not tracking work hours properly, then you are not just inefficient; you are also at risk of errors.
You are also not in compliance with the laws and regulations that require accurate time tracking.
This can lead to miscalculations that could result in fines and lawsuits. To avoid it, of course, you can, once again, rely on PEOs and let them offer you some time tracking systems that will resolve this particular issue.
3. Not Handling Employee Benefits Correctly
Now, if you are offering certain employee benefits, then you will need to know how to manage those successfully. These include:
- A 401 (k)
- Wellness benefits
- Health insurance
Otherwise, you could wind up making mistakes. These will result not only in frustrated employees but also in some costly benefits.
Not to mention that frustrated employees could proceed towards taking legal action if things are not handled successfully.
Therefore, your task is to ensure compliance with the benefits, and a good PEO service will assist you with that.
4. Late Or Incorrect Payroll Tax Filing
Filing payroll taxes is one of your main responsibilities. And, while you cannot forget it completely, you can easily wind up filing them after the deadline.
Additionally, you can also potentially make some errors in the calculations. All of that can lead to fees, and thus cost your business money.
If you outsource this task to a PEO, though, you’ll get to relax. Why? As the pros will do everything for you successfully.
5. Ignoring Workplace Safety Requirements
Additionally, there are certain workplace safety requirements you will have to meet.
And if you don’t, you could certainly wind up having to pay huge fines. Therefore, conduct workplace safety audits to identify areas that need improvement, and then develop the necessary policies to ensure compliance.
6. Relying On Outdated Policies
Speaking of, relying on outdated policies is definitely not a good idea. In fact, it could be quite a costly mistake.
And that’s because outdated policies may not comply with current laws. Ensure, therefore, to review and update them as necessary, taking into consideration all currently applicable laws.
Don’t Repeat These Common Compliance Mistakes
I have seen that Environmental compliance affects everyone across all industries, regardless of your compliance goals or field of expertise.
There are common mistakes that can harm your market access and lead to substantial fines and severe consequences.
I must tell you that it’s essential to understand the risks that these compliance mistakes pose. It is regardless of whether they have worked for you in the past.
Compliance is mandatory in the financial services industry. Advisory firms must have a compliance officer or a designated third-party compliance administrator.
Even if your business meets internal compliance requirements, you must consider more to protect your business from regulatory scrutiny.
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