It is a reality of business that actions, records and activity is monitored and regulated by federal, State and local governments and regulatory authorities. This monitoring role means that sooner or later all businesses will come into contact with inspectors and regulators who will interrogate the levels of compliance within the business. The businesses interaction with these monitors is often a stressor within the business, but it needn’t be. This weeks HR Highlight will explore the best practice for interactions with inspectors and regulators, as well as the very real traps and penalties that await those businesses that do not faithfully and fully engage with compliance monitors.
It is important for all businesses to understand that achieving and demonstrating compliance is a key element to operation of a successful business. A failure to prioritise compliance can result in penalties to the business, directors and even the closure of the business itself.
Compliance however, is a moving target, with laws and regulations changing regularly, operators need to inform themselves of the changes and what impact they will have in their business.
It is incumbent on business operators to understand the requirements for compliance in their business. The compliance agencies themselves, as well as industry associations and legal and compliance professionals are an excellent source of information and resources in this area, allowing businesses to understand the requirements and build systems that embody and demonstrate compliance in what is a dynamic and ever changing compliance environment.
This dynamic nature of the compliance environment is not unknown to the individuals and agencies that are tasked with inspecting and monitoring businesses for compliance. These agencies, at all levels, federal, State and local government, as well as regulatory bodies, are all tasked with the facilitation of compliant outcomes at the business level.
What is often the most visible of the activities these agencies undertake, the enforcement of penalties, is most often the last resort and the smallest part of the agencies overall compliance activity. Most compliance agencies undertake a raft of positive and pro-active actions to facilitate compliant outcomes at the business level. From extensive communication and education programs aimed at assisting operators in understanding the requirements and how to demonstrate them, to deeper engagement and advice on specific businesses unique situations, compliance agencies offer businesses more than simply fines for getting it wrong.
It is not the primary goal of compliance agencies to find breaches and ruthlessly punish the business, rather their primary goal is to identify issues, educate and then to “check in” to ensure compliance moving forward. Penalties, while often very public, are a last resort and are generally an indication of a lack of engagement on the part of the business.
Engaging with compliance agencies
When an inspector arrives at the business it is imperative that they are met with calm, professional and above all, honest communication from the business and its representatives. Where the business is aware of a deficiency it should be promptly communicated. Where the business has an oral process or approach it should be properly communicated. Where an inspector identifies a breach the businesses response should be “please tell me what I need to do to fix this and I will do it”, full and faithful engagement is what is required.
Given the nature of compliance as a moving target, inspectors understand that oftentimes breaches are not malicious or deliberate, rather a function of changing requirements. As such the inspectors will identify the issues with the business and make suggestions or directions to rectify the issue and to ensure compliance moving forward. In most cases the inspectors will provide detailed information on the requirements and in many cases will direct the business to detailed resources to assist them with archiving and demonstrating compliance. Most inspectors will require proof of rectification and will “check in” in the future to ensure that the systems implemented to ensure future compliance are operating properly.
Inspectors are not out to “get the business” or “slap fines” on businesses for breaches. Not in the first instance, not where there is no malicious intent and not where the business is engaged in addressing the issues.
That being said, there is a series of behaviours that will not be countenanced by the inspectors, or the community at large. Businesses that lie to inspectors, produce false or misleading documents, construct systems to obscure or deceive inspectors and regulators, or those that refuse to undertake the steps outlined by the inspectors to address and rectify breaches, will face the full and unflinching extent of penalties that the compliance agencies can bring.
No excuse for lack of engagement
There is no capacity for a business to argue that it “had” to breach compliance, or that it “couldn’t” meet the rectification steps outlined by the compliance agencies.
Recent cases through the courts have highlighted that, in instances where breaches were identified and the business did not take the required steps to correct the errors, even the fact that to undertake such correction would cause the business to report for bankruptcy was not accepted as an excuse for the failure to comply with the rectification. In this particular case the business operators unwillingness to correct their errors and comply with the instructions of the inspectors, together with evidence of providing false documents, resulted in extensive fines to not only the business, but to the director personally.
Partner or Penalties
Inspectors and regulators from compliance agencies at all levels are focused on ensuring compliant outcomes at the business level, not on penalising businesses for innocent mistakes or oversights. Where a business engages faithfully with the inspectors and complies with instructions and rectifications compliance outcomes are achieved, the business is better informed and placed to ensure compliance moving forward and the community interest is protected. In the end compliance agencies are a great resource, tool and can be a great partner for responsible businesses. There is nothing to fear from a visit from your local inspector.
However, “dodgy” operators of all stripes are on notice, where the business fails to engage, or engages in malicious, duplicitous and fraudulent behaviours in their interactions with compliance agencies, it is the community expectation that those operators will be pursued to the full extent of the law, facing penalties at a business and a personal level, and compliance agencies are working tirelessly to meet the community expectation in these cases.
Here to Help
ACAPMA members are reminded that the ACAPMA Employment Department has a series of resources from Quick Reference Guides to template documents and even proactive compliance auditing that can assist with ensuring compliance across employment, safety, environmental and other areas.
HR Highlights are things to consider, implement and watch out for in your business. They are provided as general advice and you should seek further advice on your situation by emailing firstname.lastname@example.org it’s free for members.
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