I trust you survived the shutdown of the United States Federal Government okay? It has been an interesting week for me as I deal with a number of federal departments for my clients. I found many of the tasks I planned to do this week had to wait. How about you? Did the shutdown hinder your business at all this week? (LET ME KNOW!)
Whether the government is open for business or not, we are required to stay in compliance with the laws, whether state or federal. This week, we went in quite some depth on the Fair Labor Standards act on the podcast. A lot of that was for the purposes of the Affordable Care Act, but the test for whether the Fair Labor Standards Act applies to your business is an important one to understand. Which brought me to thinking about building compliance plans. Every business has issues of compliance. Some industries are familiar with compliance plans because they are heavily regulated. Compliance plans, however, are good tools to have in your business. After all, you put systems in place to run your business, why not extend those systems to make sure your business stays in compliance with the laws.
The beginning of any good compliance plan is an understanding of what risk areas exist in your business. All businesses have them.
There is, however, not a model compliance program. That is because there are so many possibilities of compliance programs to cover a variety of different risk areas in different industries. We can, however, think about guidelines for how to create an effective compliance program for your business.
Written Policies and Procedures – We talk all the time about putting things in writing. The standards of conduct and other policies you impose on your employees should be no different. Share the policies with everyone working in your organization. Don’t forget to update your policies periodically,
Have a compliance professional – Even if it is just you, designate someone as a compliance officer with independence and authority. The compliance officer should be in charge of keeping up with the changes in your risk area and updating your policies accordingly. This can be your lawyer, but if you are doing it yourself, give that person authority to keep up with the changing laws.
Effective Training – Educate your employees on the policies. It is not enough to simply give each of your employees the policies. You need to make sure they understand them. Educate your employees. Quiz them on the policies. Make it fun.
Effective Communication – You need to make sure your Compliance Officer can communicate with your employees. In the past things like comment boxes and anonymous hotlines have been popular, but you are an entrepreneur. Think outside the box. Create forms on your website. The key is to have a way for your employees to report misconduct anonymously.
Internal Monitoring – Conduct audits regularly to make sure your program is working. Your program should help you detect problems. If it doesn’t your program isn’t strong enough, because you are more likely to have problem areas than not.
Enforce Your Standards – This is the only way to make sure they follow them. If you have standards, but don’t enforce them, they will be ignored more readily than if your standards are enforced every time.
Compliance programs are important. Remember, this is about protecting your liability. You own the business. You have the most to lose. Make sure those you are paying are conducting themselves according to the policies you have put in place. Even though you are not in a business that has a lot of regulation, you likely have some areas where you need to make sure you are keeping up with the changing laws.
So, get to researching. Though, this week, I would not suggest using official U.S. Government websites 😉
I will talk to you next week, unless you talk to me sooner 😉