Why Your Business Needs to Invest in Compliance — Or Else

 

Most of us business owners gravitate toward the areas that we’re most talented in, and this can mean paying less attention to those areas of the business that you may consider mundane, uninteresting, or even overwhelming.

If you are like me, then one of the areas that can get neglected is compliance. Yes, all things compliance seem to give me that glazed-over look in my eyes, and force my mind to wander to “more important” things like leadership development, menu items, staff schedules, and the new cash forecasts for the week.

The compliance umbrella includes everything from how you process and track sick leave, to hanging the most recent employee charts in the break room, and everything in between.

There are lots of ways that businesses have to be compliant, and lots of reasons why those measures are in place. An easy mistake to make in business is to think that you can’t afford professional help in the area of compliance. In fact, most experienced entrepreneurs will tell you that you can’t afford NOT to. It really is that important.

The area that I’ve found the most beneficial is in HR — particularly in your code of conduct, employee handbook and any other official materials you use directly with your employees. Hire experts to review your handbooks and systems. In some states, like California and New York, there are yearly updates to HR notices and policies that have to be posted and shared with employees in a quick time window.

Having an expert on your side will help you automate this process and keep you in compliance without letting anything slip. Another plus to having experts review your handbooks? They’ll find all the little things that don’t seem like they matter, but that can add up a ton.

For instance take Brinker restaurant group. In the case of Brinker Restaurant Corp. v. Superior Court of San Diego, they had to pay millions of dollars in penalties. Was it because they were being negligent? Forcing people to work for hours and hours on end with no breaks?

No. Their handbook stated that employees were eligible for a break after four hours of work — which is compliant with the law, but they did not include the phrase: “or major fraction thereof.” That’s it. They had to pony up seven-figure sums in this case because they did not have four words included in their handbook. If that doesn’t communicate the importance of having experts and legal counsel review your handbooks I don’t know what does.

The bottom line is, compliance is crucial. I know it’s not sexy and it can be as fun as watching water boil, but it is a critical function of success. It’s simple, but not necessarily easy and it takes dedication and patience.

Don’t think it won’t happen to you or that your employees love you too much. If you want to scale your business and protect yourself, invest in compliance partners to help you stay current and out of the courtroom.