What Are The Rules Related To Compliance?

Understanding your regulatory requirements and ensuring compliance must be a priority for your business. It might seem daunting if you don’t have a compliance program.

However, non-compliance can place you on the wrong side of the law and has severe consequences. Also, your company’s reputation can be destroyed within a few short weeks if found guilty.

What are the rules related to compliance?

Putting steps in place to avoid compliance issues are a necessity. There are many different rules for businesses to follow. These rules can change depending on your industry.

Additionally, regulators are constantly updating and creating new regulations all the time. As a result, staying on top of compliance can take time and dedication to manage correctly.

Compliance Helps You To Reduce Risk

A good rule of thumb is to remember that compliance helps to reduce the risk for your business. Companies prove compliance by demonstrating that they are following the rules or laws.

Organizations use controls, documentation, and tests to show that they comply with the regulations. The compliance requirements may change depending on your business or industry.

In this article, you will find compliance checklists to help you and also advice on how to manage compliance in your organization.

Legal Compliance Checklist

Every organization should have a goal regarding compliance and aspirations to achieve regulatory compliance. Businesses should not underestimate the importance of legal compliance.

Legal compliance examples can help you understand what you need to do for your business. Here are a few of the most common legal compliance requirements:

Labor Laws

The U.S. Department of Labor enforces more than 180 federal laws. The Fair Labor Standards Act (FLSA) deals with minimum wage, overtime pay, record keeping, and standards for youth employment.

In this particular law, it’s important to note that states can also have minimum wage laws. When an employee is subject to federal and state law, he is entitled to the higher minimum wage of the two.


The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a federal law. It helps people to retain their health insurance when they move jobs. It also covers confidentiality and security of patients’ information.

This act has become more widely known because of health data breaches from cyberattacks and ransomware attacks. 

You can read this HIPPA compliance checklist to help you.

Corporate Governance

The Sarbannes Oxley Act (SOX) from 2002 enforces US organizations to demonstrate corporate governance compliance. SOX stipulates that the management needs to certify the company’s financial reports.

Also, an independent accountant and management must certify the organization’s internal controls. The results also need to be made available to shareholders.

Data Security

Data security is becoming more critical daily as the world becomes more digital. The California Consumer Privacy Act (CCPA) became law on January 1st, 2020, and applies to the state of California. CCPA compliance is strict.

It applies to businesses that collect personal information from California residents. The requirements are similar to the EU’s General Data Protection Regulation (GDPR).

Small Business Compliance Checklist

It doesn’t matter what size your business is; you still need to ensure you adhere to compliance rules. In this small business compliance checklist, you will find a list of everything you need to set up.

Work through the list to ensure you are legally compliant with federal and state laws.

Internal business requirements

You must meet external and internal business compliance requirements to stay legally compliant. External requirements are filing paperwork and paying taxes to federal and state governments.

Internally, you can document your compliance with internal requirements as closely as possible to company records. This process will help if you ever receive legal action or want to sell your business.

Federal filing requirements

You must ensure your business meets federal tax obligations, including employer and income taxes. Federal requirements will involve paying federal taxes and ensuring you adhere to the Affordable Care Act.

This act forces businesses with more than 50 employees to report to the IRS regarding their health care coverage. Also, companies must keep any certificates, licenses, or permits up to date. 

State filing requirements

It all depends on your business structure and the state where you operate.

However, here are a few examples of filing requirements: Annual Reports, Articles of Amendment (any important changes to your company), Franchise Tax, Initial Reports (some states require this after incorporation), and Statement Filing Fees (these usually accompany the annual report).

Why is it important to adhere to compliance?

You must adhere to compliance rules and do everything possible to ensure compliance in every part of your business. Non-compliance can result in severe repercussions, such as fines and penalties.

In some cases, employees have had prison sentences. Also, once a regulator has fined a company, it can tarnish a company’s reputation forever.

When you know why compliance is so important, you can understand the urgency for your business to stay compliant.

The logical step is to ensure you are always compliant. Using an organized compliance program is the perfect solution. It can help you to handle any potential risk.

Why do we need Compliance Programs?

Compliance programs are a necessity to meet compliance goals. If your compliance efforts are going to be effective, you need to have a proper compliance program.

The most important thing a compliance program does is help to protect your business. It also helps you avoid practices that affect operations and raise risks, such as abuse, discrimination, and fraud.

Who is responsible for compliance in an organization?

Most organizations dedicate a specific person or team to handle compliance. A compliance officer usually heads up the team. The compliance officer’s role is essential in the organization.

This dedicated person or team can coordinate compliance across all the different departments. It can also help to ensure employees have compliance training and understand their compliance obligations. 

What are the responsibilities of a Compliance Officer?

As mentioned previously, a compliance officer’s role is imperative for a business to meet its compliance obligations.

Ultimately, the compliance officer needs to ensure the company is working in an ethically and legally compliant manner.

Here is a list of the primary responsibilities of a compliance officer:

  • Advising management of potential risks
  • Developing a compliance program
  • Reviewing company policies

The compliance officer and his team can work together to identify risks the organization might face. The department can then advise on how to avoid or deal with these risks as and when they happen.

The compliance personnel will manage this by covering these five main areas:

  • Identification of risks
  • Prevention of risks
  • Monitoring and detecting risks
  • Resolution of risks
  • Advising on risks

How do you manage Compliance Regulations?

Taking steps to manage compliance will help you avoid unnecessary fines and penalties. You can monitor new laws and regulations and adapt to their needs.

Ensure employees follow your company’s procedures and policies and update them on any changes.

Conduct regular internal audits to identify any problem areas. Also, try to automate everything you can by using compliance software.

Managing compliance regulations is the best way to handle compliance instead of compliance controlling you. Push a proactive approach to compliance instead of a reactive one.

You can use the checklists detailed in this article to help you. Finally, set up a compliance team with a dedicated compliance officer if you haven’t already. Your compliance team can create the best compliance program to protect your business.

Sally Leslie

Sally Leslie is the content editor for Planet Compliance. She also writes B2B content and case studies for entrepreneurs, SMEs, and startups worldwide. She is a lover of plants, freedom, and football. https://www.contentcatcreations.com/

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