Startacus Join Now! /

Understanding and Explaining Compliance in Your Business

Startacus RSS

by Startacus Admin

photo-1575505586569-646b2ca898fc.

If your business is going to survive, here are some of the key areas where compliance is essential and where negligence could cost you...

“The cost of non-compliance is great. If you think compliance is expensive, try non-compliance”-U.S. Paul McNulty.

pexels-photo-5668802.In 2018, British Airways was fined a whopping £183.39 million by the Information Commission Office (ICO) for breaching the personal data of more than 500,000 customers.

Had the company given importance to compliance, it would have saved the embarrassment and fines levied on it. The non-compliance cost is 2.71 times more than the cost of compliance.

In general, compliance means religiously following rules, standards, procedures, regulations, laws, and specifications.

A businessman watches with bated breath every time there is a new compliance requirement or update. Not because the company’s hate doing things the right way, it’s the cost, time, and effort required to make a business compliant. From obtaining a business license to ensuring customer data protection, compliance covers every aspect that helps protect customers’ health, welfare, safety, and even employees.

Modern compliance isn’t about ticking the right boxes; it’s more about protecting society from organized crime. The absence of it results in detrimental effects, including

  • Penalties
  • Negative reputation of the company
  • Increase in audits
  • Imprisonment and hefty financial fines
  • Termination of the business
  • Being compliant is the only way forward for companies to remain profitable as well as successful.

Understanding and Explaining Compliance in Your Business

The government’s vast number of rules and regulations may sound overwhelming, and business owners can easily find themselves violating the laws. Having a complete understanding of compliance is essential for the survival of your business. Five areas in your business where compliance is a must and negligence can cost you your business include.

1. Data privacy

With the penetration of technology, more and more businesses are witnessing a shift to the digital platform, resulting in collecting a mammoth amount of customer data. The way customer’s data is handled gives rise to two prominent data privacy laws: CCPA (California Consumer Privacy Act) and GDPR (General Data Protection Regulation)

Data privacy is not about CCPA vs GDPR; it’s about following both the laws as they’re applicable. GDPR came into existence in May 2018 and affects organizations working inside or outside the EU but providing services or offering goods to the EU people. CCPA came into effect from January 2020 and affects only specific organizations inside or outside California doing business with a California resident or a company.

Both laws deal with data privacy and aim at protecting the personal information of the customers.

  • GDPR is more about lawful processing of customer data, including the ways of collecting, using, and protecting it.
  • CCPA is about safeguarding the privacy rights of a consumer.

photo-1595666944516-bbb485958fb5GDPR and CCPA allow the user right to access, stop data processing, correct, and delete their data.

With 60% of companies going out of business within six months of a data breach, investing in a data privacy tool helps ensure compliance with both the data privacy laws.

Example: In January 2019, CNIL fined Google with €50 million to violate GDPR law.
Compliance tool: Osano

2. Equal employment opportunity (EEO)

Born during the civil rights era, the sentiments resulting in equal employment opportunity (EEO) is clear. EEO is the right of every job seeker throughout the hiring process. The compliance ensures that the job seeker is safeguarded against discrimination based on caste, sex, religion, race, color, or national origin. As an employer, your business cannot judge the suitability of a candidate on these bases.

For the current employees, EEO safeguards them against discrimination for promotion, benefits, pays, etc. Fostering a culture of EEO in the workplace is a must-have to avoid discrimination and harassment.

Benefits of EEO compliance

  • Improves recruitment
  • Increases employee engagement
  • Higher customer satisfaction
  • Safeguards the employee and the business
  • Stronger brand reputation

But some job openings receive thousands of applications; it becomes an uphill battle for the management to provide equal employment opportunity. Therefore, investing in a tool that seamlessly tracks the job seeker’s data will help you hire the right candidate while ensuring compliance with federal laws.

Example: Jones Day, an international law firm, is battling a $200 million discrimination lawsuit.
Compliance tool: Applicant PRO

3. Minimum wage

If you don’t pay your workers according to the minimum wage set under the FLSA (Fair Labor Standard Act), you’re violating compliance. The minimum wage varies from state to state, and the federal minimum wage is $7.25 per hour since 2009. The minimum wage act ensures every worker receives fair payment for their work, and you might have to pay the workers extra for overtime. Failure to adhere to the federal regulations attracts audit and hefty penalties. It offers exceptional protection to minor workers as it prohibits businesses from hiring under 18 for high-risk jobs.

Example: In 2020, a restaurant chain in Tennessee was asked to pay a whopping sum of $188,728 by the U.S. Department of Labor for a minimum wage violation

4. Workplace safety

photo-1552879890-3a06dd3a06cAccording to the research, every seven seconds, a worker gets injured. With these statistics in mind, implementing workplace safety is a must in every organization. If you’re not providing a safe working place for the workers, you may end up facing crippling fines from OSHA (Occupational Safety and Health Administration).

Apart from providing a safe working environment, it’s imperative to have adequate coverage of workers’ compensation for injuries taking place at the workplace. This helps in safeguarding your business against potential lawsuits.

Benefits of being compliant with OSHA’s safety guidelines

  • Reduces cost associated with injuries, illness, or fatalities
  • Positive and safe workplace culture
  • Reduces cost for replacing injured workers and training the new workers
  • Lower insurance premium
  • Boosts social and corporate responsibility
  • Builds reputation

Example: In 2014, OSHA fined Dollar Tree Stores in Massachusetts $177,800 for exposing the workers to serious safety hazards.

5. ISO

ISO (International Organization for Standards) compliance refers to the ISO 9001, an international standard dedicated to quality management. Companies widely use it to prove they provide a product or service, which meets specific requirements. Today, the customer is wary and does not prefer purchasing cars, homes, or any other product that lacks the acceptable quality.

pexels-photo-2058128.Food manufacturing companies widely use ISO 9001, and ISO 20022 provides a standardized method for financial transactions. You have ISO standards for health & safety, IT security, environmental management, and energy management.

Benefits of ISO compliance

  • Increases recognition and credibility
  • Increases revenue
  • Enhances consistency
  • Improves customer satisfaction
  • Empowers the employees

Compliance tool: Effivity

Wrapping Up

When you start a business, there is an array of compliance you and your employees must uphold. Ignoring compliance is not an option because being compliant ensures you always remain on the right side of the law, protecting the company’s reputation.

Compliance improves the ethical posture, which offers numerous benefits beyond avoiding costly regulatory fines or punishments.

The mathematics here is simple.
More compliance = Less risk.

Though compliance may be challenging and cannot be done in a day – but when done well, it becomes a strategic advantage.

Build your compliance strategy today for a better future tomorrow!


Subscribe to our newsletter

If you would like to receive our startup themed newsletter, full of the latest startup opportunities, events, news, stories, tips and advice, then sign up here.
Startacus RSS
Business DealsSubmit Your Startup
Win TicketsNetwork and Collaborate
Our Latest Features



Published on: 23rd November 2020

If you would like to enable commenting via your Startacus account, please enable Disqus functionality in your Account Settings.


Create an Idea!View Other Ideas, Projects or Startups
Why not Sign Up?
Create Projects
Edit Projects
Self Interviews
Self Starter of the Year
Product Giveaways
Subscribe to our Newsletter
Startacus
Check us out at our Google+ page!