Why Your Business Might Be One Audit Away from Trouble

When you first start running a business, you will certainly have a lot on your plate. You’ll think about how to make sales, how to improve customer experience, and what strategies to employ to support and enhance growth. And yet, there are some things that you may overlook and ignore – things that could then lead to trouble. Compliance, for example, and HR risks, if left on the back burner, can lead you towards some serious problems that you would rather avoid. Read more about compliance in general.
Anyway, if you ignore those things for far too long, you could actually be in great trouble. In fact, you
may not even know it, but your business could be one audit away from trouble right now, due to, say
payroll non-compliance. This is why it is of utmost importance for you to always keep compliance in
mind and to, while definitely still thinking about growth and success, ensure that you are doing things the right way, and thus avoiding any kinds of expensive penalties that could really damage your budget, and possibly put a stop to your overall operations.
What is it that we are specifically talking about here, though? Or, better yet, what are the dangers of
this type of non-compliance, and how can it lead you to trouble? Well, it is time for you to find out, so
keep on reading to get your answers to those questions, and to learn how to make a plan on what to do next in order to avoid trouble.

The Dangers of HR Non-Compliance

You may think that non-compliance is basically just a paperwork issue. Or, you may think that, since
you’re not exactly a large business, you won’t be audited, and you’ll be able to fly under the radar.
These, however, are all some wrong assumptions. Apart from being a paperwork issue, non-compliance is both a legal and a financial issue. And then, small companies are actually more likely to be targeted, given that they don’t have a robust HR infrastructure in place that ensures compliance along the way.

Understand HR compliance better: https://www.geeksforgeeks.org/hr/hr-compliance-meaning-role-examples-importance-and-challenges/

So, what happens if you’re not staying in compliance with all of those regulations and rules? Well, for one thing, if you are violating some of the rules regarding wages and working hours, that is sure to lead to some penalties, back pay, as well as legal fees. Furthermore, improper employee classification can trigger tax audits, benefits compliance errors can result in legal exposure as well as IRS penalties, and then the lack of proper documentation in, say, harassment claims, could lead to wrongful termination suits. Not to mention that HIPAA violations can also cost quite a lot of money.

What Could Trigger the Audits

Now, I am sure that you would much rather avoid all of those risks and potential penalties that I have
mentioned above. Yet, the truth is that, if you’re not doing things right, you could be one audit away
from trouble. Before we get to talking about how you can avoid the trouble, though, let us quickly help you understand what it is that could actually trigger the audit that could be harmful for you in the end.

For one thing, an audit can be random, meaning that you could just be chosen for an audit without
having triggered it yourself. But then, some audits can also be triggered by certain actions or by
employee complaints. So, there are certainly a few things that you should keep in mind here, and a few warning signs that you should consider, as those could definitely lead to an audit.
For starters, sudden terminations or layoffs without proper documentation could be the trigger. Then, employee classification mismatches, discrepancies in payroll and benefits, as well as a lack of written HR policies could also lead to an audit. Of course, a high turnover rate could be a signal that something is wrong as well, and then there are also safety complaints and OSHA reportable incidents, all of which could lead to you getting in trouble.

How to Avoid Trouble

The reason why most businesses are vulnerable when it comes to this is because they treat HR as an
afterthought. In other words, they don’t really take it that seriously, which is definitely a mistake. So,
what you have to do to avoid trouble is get more info on HR outsourcing, and the costs of doing it, so
that you can ultimately get the right partners on your side, to ensure your compliance. The key is, thus, in hiring the right people for the job.
Of course, to hire the right company to be your HR partner, you’ll have to carefully research different
ones. Check their experience, their reputation, and don’t forget to compare the costs of the fees. Then, make your choice and partner up with great professionals to ensure compliance and avoid the audits
and the trouble.