By Lee Allphin, Employer Advantage Founder and Chairman of the Board
When it comes to compliance, what you don’t know can not only hurt your business, it can put you out of business. In fact, having just a little bit of knowledge of policies and procedures misleads many business owners into believing they are in compliance “enough” to get by. This couldn’t be farther from the truth.
At Employer Advantage, we heed the warning from the famous poem by Alexander Pope: “A little learning is a dangerous thing.” Having some knowledge of compliance means people can unwittingly make detrimental mistakes. The unfortunate truth is that all businesses are responsible for having advanced knowledge of a large number of policies, procedures, and rules needed to operate a business.
More than half of business regulations relate to the way a business hires, treats, and pays employees. With the hiring of the first employee, a business will find itself embroiled in the business of government regulations and compliance.
The sheer volume of government regulations on businesses can make heads spin, whether you’re just starting out or are a seasoned professional. Even finding the locations of these regulations can seem overwhelming.
Here are some of the key areas we’ve seen employers struggle with.
- Tax Code: Most business taxes are employment related. So, the employer is truly the dreaded tax collector. They collect taxes from employees, add employer taxes to it and pay it to the government. State payroll taxes are high on the revenue sources for any state. Because of this, penalties for non-compliance include large fines and maybe even jail time. In short, a business is handling large sums of money that belong to the government and that stewardship can make or break a business.
- Employment and Labor Law: There are hundreds of federal and state labor laws and many vary by state or industry. Any business that employs workers and independent contractors, is subject to labor laws. How much to pay employees, when they get overtime pay and how often they should be paid is regulated in the Fair Labor Standards Act. Then there’s the Family Medical Leave Act, the Equal Employment Opportunity Act and many, many more.
- Environmental Regulations: Think OSHA. Workplace safety is an important requirement for any business. Employers are obligated both morally and legally to keep workers out of harm’s way. Laws exist within each industry and business based on products and equipment used. Air quality, water quality and protection from unsafe products is required and governed by strict environmental protection laws.
- Privacy: Businesses with any employees have a great deal of sensitive personal information about their employees. Rules and regulations are in place to protect individual privacy of everyone at a workplace. They mandate how employers must save and secure this data. Disclosure of an employee’s private information, including Social Security number, address, name, health conditions, credit card, bank numbers, or personal history is taken very seriously. Employers may be fined for disclosing sensitive information and employees may sue as well. One such example, the Health Insurance Portability and Accountability Act (HIPAA) prohibits the release of health data without a patient’s permission. Violation of this law has dire consequences.
- Insurance: Workers’ compensation insurance is for work related injuries and covers the cost of medical bills and lost wages for employees. Most businesses with employees need this coverage, but the requirements vary by state and number of employees. Other types of employment insurance may or may not be required, but in today’s society and the #MeToo movement, Employer Practices Liability Insurance (EPLI) is critical coverage.
- Reporting of Data: Federal law requires employers to report basic information on new and rehired employees within 20 days of hire to the state where the new employees work. This helps accelerate child support orders and stop fraudulent unemployment and workers’ compensation claims. Also, to ensure you are complying with federal nondiscrimination laws, the EEOC requires the EEO-1 form be submitted each year for businesses with more than 100 employees, or over 50 if you are a federal contractor.
For more than 25 years, Employer Advantage has helped clients consistently stay in compliance. Unfortunately, we have also observed many businesses that lack the knowledge to do so. For new clients coming to us in crisis, we have helped pick up the pieces to ensure they are protecting their businesses. From paying tax penalties, to OSHA fines and violations, department of labor fines for violation of overtime rules, fines for prevailing wages issues, unemployment issues, harassment violations and fines, and department of transportation setbacks, we have assisted businesses with it all.
Ignorance is not a shield when you come face to face with these challenges. If you don’t have a reliable and knowledgeable source of advice that can guide you, we strongly suggest you get one today.
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About Employer Advantage
A New Path to HR Bliss — Trusted for more than 25 years, Employer Advantage frees business leaders from the administrative and compliance burdens of having employees so they can focus on what they do best: helping their business succeed. From energetic entrepreneurs to large corporations, we create a tailored and strategic approach to fit individual business needs and company culture.
More than a slick software solution — Employer Advantage’s dedicated service teams save businesses time and money, while providing employees with top-notch assistance and benefits. We enhance profitability while reducing the costs associated with employment laws and the often-significant penalties for the failure to comply with them.
Our comprehensive suite of services manages payroll, employment taxes, health and benefits, retirement, human resources, employee manuals, safety, training, workers’ compensation, OSHA, DOT, and more.
Employer Advantage is located in the Midwest, and serves more than 400 companies throughout the country. We offer free consultations and strategic assessment of business needs, with quick-and-easy account setup and seamless transitions. 417-782-3909 | Toll-Free 800-467-3909 | info@EmployerAdvantage.com | Learn More: www.EmployerAdvantage.com