Compliance Risk: 4 Red Flags for Your Business to Watch Out For

The Payroll Company Compliance, Compliance audit, Compliance RIsk

Compliance-Risk-Red-FlagsAs a business, compliance can mean different things depending on the subject. In Human Resources, compliance encompasses legal and regulatory guidelines businesses must follow to avoid the legal risks that can lead to financial ruin. Outsourcing your HR management and working with compliance officers and experts is a guaranteed way to not only recognize but avoid these risks. Knowing some of the more common red flags helps business owners and leaders identify if their business is at risk for compliance violations.

Here are 4 red flags to watch out for:download-now-ebook-switching-to-a-new-payroll-company

1. Workplace Safety is Not Prioritized

There are businesses that do not follow rules and regulations when it involves workplace safety. There is no training on machines, safety equipment is not being used or is being misused, the lighting is poor making it hard to see, the flooring is slippery, greasy, or has additional hazards that could create slips and falls, and there are no emergency signs posted, and there are no accommodations for disabled persons. Workplace safety should always be a high priority, as it could result in numerous lawsuits and workplace compensation claims.

2. Your Company is Negligent in the Hiring Process

Recruiting and hiring employees isn’t just saying yes, they must be trained, and all certifications must be validated and verified. This is where a lot of businesses miss the mark. Additionally, many businesses hire illegal immigrant workers, which could result in huge fines or a shutdown. If your company does not follow best practices when recruiting and hiring new employees, you open the company up to negligent hiring claims.


3. A Non-Inclusive Culture

We are in times when it is important to have a culture that understands, accepts, and respects everyone. Allowing obvious biases to occur within the workplace no longer flies. Ensuring the workplace is diverse and inclusive makes a difference. If there are instances of inappropriate jokes, most of the executives look alike, there are no safe spaces where employees can express their concerns, there is no inclusive language in the communications, and other non-inclusive behaviors, this is a recipe for business disaster.

4. There is No Compliance Training in Place

Lawsuits due to employee discrimination can take many forms. This includes sexual harassment, age discrimination, racial discrimination, and disability discrimination. While no business intentionally sets out to commit these acts, these situations can occur within the most successful businesses. If your business is not intentionally training its employees on ways to prevent discrimination, this is an obvious red flag.

Compliance is not only damaging but costly. Don’t put your business at risk.high-cost-of-noncompliance

Originally published 5/24/22 - Updated 3/20/23

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