Growth means more customers, revenue, and employees. It also means increased responsibility for employee compliance. What may have seemed like a back-burner task when the team was small can’t be left out of discussions as operations grow and new employees, managers, or locations enter the mix. Here’s where the business of compliance becomes a more strategic component of risk, reputation, and long-term success.
Growth Can Expose Compliance Gaps
Employment rules apply at federal, state and local levels, and the requirements can vary by location, aAnd when growth occurs, it changes the whole dynamic. What works for 20 employees simply can’t hold up to a workforce that’s expanded to 200 employees. Rushed onboarding and hiring and shifting work arrangements can easily lead to gaps in onboarding, payroll records, and employment classifications.ย
Worker classification deserves extra attention. In some states, a business that misclassified employees as independent contractors can cause negative impact on their minimum wage, overtime, meal, rest periods, and other workplace protections. Businesses that make this mistake can be fined heavily by regulatory bodies.
HR Policies Need to Keep Pace
A growing business needs clearly stated policies that both employees and managers can understand and follow. Topics in the policies can range from workplace conduct, discrimination, harassment, and leave, to discipline, pay, and process for reporting workplace issues.ย
A handbook isn’t enough if management doesn’t understand the policies or doesn’t enforce them evenly. This is very important when dealing with workplace complaints.
Employers have the responsibility to create processes for receiving complaints, reviewing them fairly and keeping appropriate records. Federal guidance also makes clear that retaliation for protected workplace activity can create legal problems for employers.
Payroll and Records are Important
The workload involved in managing time, payroll, and wages can increase dramatically and unexpectedly as the number of employees rises. Accuracy can take a hit, as even small errors such as miscalculation of overtime, incorrect deductions, and inaccurate tax reporting can become significant when compounded across hundreds of employees using the same processes.
A strong record-keeping framework makes it easier to track and verify that the business’s processes are in compliance with applicable regulations. Compliance reviews can specifically address payroll issues, job classifications, leave tracking, employee records, and HR policy alignment.
Employees Have Options
A well-implemented and managed compliance program is a benefit not just for the employer, but also for employees. When employees believe their rights have been violated by being underpaid, discriminated against, retaliated against, or otherwise wronged, they have a number of potential avenues to get justice.ย
Government agencies like Californiaโs Department of Industrial Relations provide resources for workers dealing with issues including unpaid wages, misclassification and workplace retaliation. Some employees may hire a local Santa Monica employment attorney to receive personalized legal counsel on their options.
Endnote
A growing business that relies on an ad hoc approach to compliance is at greater risk of costly audits, lawsuits or government investigations than one that plans strategically. Regular reviews of existing policies and the effectiveness of its current processes can proactively address gaps and potential problems before they escalate to major liabilities. The outcome is a more efficient business, greater overall operational visibility and a healthier workplace that truly embraces responsible growth.
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