The 4 Most Common Compliance Risks and How to Avoid Them
You don’t want common compliance risks to derail your business. Those risks are there, like minefields you have to carefully avoid. Regardless of what industry you work in, there are compliance risks that will most likely affect your company. These risks are: Health Insurance Portability and Accountability Act (HIPAA), Equal Employment Opportunity (EEO), Fair Labor Standards Act (FLSA), and Consolidated Omnibus Budget Reconciliation Act (COBRA).
If your company falls afoul of one or more of these common compliance risks, it could not only affect your company in a negative way, but your clients as well. Here is why these risks are relevant in today’s workforce, and how you can protect your company and your clients in these sensitive compliance areas.
HIPAA—The government takes safeguarding client information very seriously, and so should your company. We live in a world where the risk of identity theft is quite real. Your clients want to know their information is safe with your company. In fact, they need to feel secure about this in order to feel good about doing business with you. You have probably seen many news items in recent years about companies who have had big data breaches which exposed the sensitive, private information of their clients to hackers around the world.
It has even happened to the federal government. Some of the companies that experienced data breaches went out of business, while others had to pay huge fines to the government as well as affected clients, and also had to update their data security measures. The federal government offered 18 months of credit monitoring and $1 million in identity theft protection insurance to the government employees and contractors past and present who were affected when it happened at the government’s Office of Personnel Management.
It’s not only making sure your company keeps its client information secure in the digital environment, either. Companies must also have a chain of command for physical copies of client information that assures this information will not fall into the wrong hands. If you are not sure if your company is living up to HIPAA compliance requirements, you need to hire an auditing company to look at what you’re doing. An audit company will let you know the areas where you can improve and tell you what to do to improve them. Without the assurance of their data being as secure with your company, your clients will flock elsewhere.
EEO–This is another compliance area where your company has to be careful. Everyone who works for your company, or who applies for a job there, must be given an equal opportunity to be hired as anyone else who is similarly qualified for the position they’re in or applying to be in. You cannot discriminate on any basis, including gender, disability, race, nationality, age, religion, sexual orientation, and more. If there is any question about the reason you fired someone, or the reason you hired one person over another, and that question has a discriminatory element to it, your company may find itself the subject of an expensive lawsuit. If you lose the lawsuit, there will be fines and penalties as well.
Clients don’t want the association of working with a company that is known for discrimination in its hiring and employee retention practices. Such an association reflects badly on your clients and their own businesses. Getting an audit of your employee handbook and hiring guidelines can give you assurance that you are in compliance with EEO regulations, and likely to win any lawsuits that may be brought against your company.
FLSA–The FLSA is another potential compliance minefield for your company. This act regulates things like working conditions, hiring and employing minors, and pay. There are minimum standards companies must uphold in each area of this act. Any company that is found to have unsafe or unfair working conditions, a hostile working environment, pay that doesn’t meet federal minimums or is discriminatory, or that works minors too hard and/or too long in illegal conditions will find itself the recipient of federal oversight to make sure these compliance mistakes are corrected.
It is extremely important to read and understand the FSLA backward and forward, and to make sure your hiring managers and supervisors do, too. It will be difficult to attract quality employees if you are not in compliance with the FLSA, and this lack of quality employees may translate into clients leaving your company in droves due to poor performance from your company in meeting the needs of your clients.
COBRA–When an employee leaves your company, you are required by law to offer them COBRA health insurance coverage for up to 18 months after they leave. This coverage is the same coverage they were getting as an employee, and at the same price. The only difference is that they must pay the portion of the premiums your company was previously paying for them. Whether you offer a conversion policy at the end of the COBRA period is up to your company. The important thing is that full-time employees who were receiving health insurance for themselves and their families are offered COBRA at the same level of insurance they were receiving during their employment. A lack of COBRA offerings, or not offering it at the proper level of coverage or price can lead to problems with lawsuits and federal fines.
If your company has any concern about how well it is meeting these common compliance risks, you should get a professional audit. A professional audit is essential to keeping your company in business, retaining your best employees, and keeping your clients happy. You should get an audit even if you think you are in compliance; it’s easy to fall afoul of these regulations without knowing it. You don’t want your first clue that you’re doing something wrong to be getting served with legal papers. Don’t put your business’s future in jeopardy. Secure that future by getting an audit to make sure you don’t trip on any of these common compliance risks. Contact I.S. Partners, LLC by calling 215-675-1400 or click here to request an audit quote.