When you were a kid and messed something up, you could possibly get away with saying, “Oops, I didn’t mean to do that,” or perhaps, “I didn’t know better.” But when it comes to compliance with government regulations, those excuses won’t help you.
Compliance with rules and regulations is one of the most important issues for businesses of any size. What seems like a simple oversight can become very costly. For that reason, business owners and managers need to be aware of both state and federal regulations for their business.
Seek outside help when needed
It’s important to have a professional look at your business structure and how your employees are being paid. Are they exempt or non-exempt? Are they being paid overtime when it’s required? Employee classification and employee pay regulations are one of the easiest traps to get caught in when it comes to compliance.
Just take a look at Burn Co., a restaurant in Tulsa that ran afoul of the federal government for payroll regulations regarding overtime and records. They had to pay over $55,000 in back wages, and they’re not the only ones. The federal government takes these rules very seriously, and many businesses end up paying significant fines when issues come to light.
In some situations, you might be compliant with federal guidelines but not state guidelines. Some states have laws about employee breaks, for example. In Oklahoma it’s deferred to the federal level, but in California you’re required to give employees a break — you can’t have them ask, you just have to do it. That issue caused Red Robin to settle for $8.5 million in repayment to workers who were affected by their break policy in California.
Understanding the risk
You may think you know what you’re getting into when it comes to hiring and paying employees, but do you really? Anytime you have employees, you have risk.
In the spectrum of good risk and bad risk, non-compliance with employment regulations is a bad risk. You’re taking a risk on something that’s unknown, and the downside is not only repaying what you should have paid in the first place, but also paying damages and penalties.
It’s worth the investment to work with a qualified professional who understands employment regulations and can make sure you’re classifying and paying your employees correctly.
Compliance with the government’s regulations, whether state or federal, is a critical part of running a successful business. Any short-term savings you get by skirting compliance or not hiring a consultant in the beginning could be completely wiped out by fines.
Don’t take that risk.
If you have any questions regarding employee regulations, contact us at WhyHR. We’ll make sure you’re in compliance with the rules and regulations that impact your company.