Running a small business gives you the freedom to set the rules, but that doesn't mean you're free from laws and regulations. From employment laws to safety standards, staying on the right side of compliance is crucial. These continuously evolving laws aim to ensure fairness, safety, and accountability in business operations. Failure to meet compliance can result in severe consequences such as fines, legal liabilities, and reputational damage.
It can be difficult to keep track of every single law and avoid non-compliance fines on top of handling the other responsibilities necessary to run your business. Investing in human resource outsourcing through a professional employer organization (PEO) can save you time and money, allowing you to maintain focus on operating your business. By managing HR functions, a PEO can help your business stay in line with complicated laws and regulations.
The following dives into how non-compliance can cost your business money and how a PEO can help manage these essential tasks.
Non-compliance Risks And PEO Solutions
Workplace safety
Workplace safety is a crucial aspect of sustaining a healthy work environment, as these practices and procedures protect employees and prevent accidents. The Occupational Safety and Health Administration (OSHA) takes safety seriously and will issue significant fines if your workplace is not compliant. According to the OSHA Penalties list, serious violations can cost a business $16,131 per violation. It’s 10 times that amount for willful or repeated penalties.
Partnering with a PEO for risk management services can provide resources and expertise to uphold safety standards and keep your business compliant. A PEO can complete regular risk inspections and catch hazards before an incident occurs, saving your company from potential fines. In addition to helping you steer clear of expensive OSHA fines, workplace inspections and guidance on compliance can make your work environment safer and minimize the risk of workplace incidents.
Hiring
Hiring employees can be a costly experience if you aren’t compliant with appropriate policies and practices. With several laws enforced by the Equal Employment Opportunity Commission (EEOC), companies must stay informed to avoid legal pitfalls. Missteps during the hiring process can lead to lawsuits from disgruntled applicants over improper job applications, discrimination, or other issues. These lawsuits are not only costly, but they can tarnish your business’s reputation.
Acquiring HR services through a PEO can help you avoid these hiring mistakes and possible lawsuits. From cohesive hiring and onboarding to HR auditing, a PEO like GMS offers plentiful solutions to streamline your HR processes. With expertise in HR regulations, a PEO can ensure compliance and safeguard your business against legal liabilities.
Health care
Under the Affordable Care Act (ACA), businesses with 50 or more employees or full-time equivalents (FTEs) are required to offer health insurance coverage. Failure to offer coverage under current legislation could end up costing a business thousands of dollars each month, depending on the number of employees at your company and how or if you have offered employees coverage in the past. Since the specifics can get complicated, use this simple guide from The Henry J. Kaiser Family Foundation to see where you fall.
One of the best ways to maintain compliance is by collaborating with a PEO to find a group health insurance plan that makes the most sense for your business and employees. A PEO can negotiate with insurance providers for competitive rates so you can receive premium care at a reduced cost. PEOs also handle administrative tasks associated with managing health insurance, including keeping up with health care compliance regulations.
Payroll
Managing payroll comes with a host of tax obligations for businesses. Mishandling payroll or filing inaccurately can result in hefty penalties due to non-compliance with tax regulations. In fact, if there's negligence or disregard for rules or regulations, the accuracy-related penalty stands at 20% of the tax underpayment attributed to these actions. Failing to file on time can also be costly, with fees increasing for each month overdue. The Failure to File penalty is 5% of the unpaid taxes for each month that a tax return is late, capped at 25% of your unpaid taxes. These penalties highlight the importance of timely and accurate payroll management practices to ensure compliance and avoid financial setbacks.
By optimizing payroll management, a PEO can efficiently handle responsibilities such as strategic planning, processing payroll, benefits administration, and more. A PEO like GMS not only offers payroll administration services but also provides payroll tax management. With a PEO, businesses can benefit from expert assistance navigating complex tax regulations, ensuring accurate tax filings, and avoiding expensive penalties.
Stay Compliant Through Changing Regulations With GMS
Some businesses need help remaining compliant with every existing rule and regulation. It gets even more complex when laws are created or updated. A PEO like GMS has a dedicated team of HR specialists who can help you stay up-to-date on the legislation and regulations, keeping your business compliant and avoiding penalties.
With a PEO, you don’t have to spend hours trying to make sense of every little detail concerning laws and regulations that may affect your business. Our experts handle the complexities of compliance, so your business is safer and stronger in the long run. Contact us today to talk about how GMS can help your business!