At its most basic definition, compliance means conforming to a rule, such as a specification, policy, standard or law. For most companies in the U.S., this equates to complying with a set of laws and regulations at the Federal, state, and local levels. At a high level, this can be broken down as follows:
- Meet federal tax obligations (income, employment)
- Comply with the Affordable Care Act
- Comply with marketing and advertising laws, copyright laws, workplace poster laws, workplace health & safety laws, and Americans with Disabilities Act (ADA) laws
- Annual report or biennial statement
- Statement filing fees
- Meet state income or franchise tax obligations (income, employment)
- Articles of Amendment
Here comes the more complex part. Local governments also impose their own regulations on companies and there is no consistency from one jurisdiction to another. In fact, most jurisdictions require a business license at a minimum in order for a company to operate legally. According to the last Census count, the U.S. includes a total of 38,779 general-purpose governments, along with another 51,296 special districts. General purpose governments include all counties, cities, towns, townships, villages and other jurisdictions serving as the primary government in an area. Special districts consist of school districts, water authorities, parks districts and other public entities serving a more specific function.
Lastly, compliance varies significantly by industry. There are numerous regulatory bodies who oversee various regulations that companies must adhere to. If you manufacture goods, your company may be subject to environmental permits and other restrictions. Likewise, restaurants are subject to labor laws like FLSA minimum wage requirements and OSHA standards for general employee safety. Regardless of what type of compliance your company is responsible for managing, there are monetary considerations for all of them – whether those are annual fees or potential fines for compliance violations.
Fast forward to 2020 and the COVID-19 pandemic. How has the pandemic changed operational compliance for small to midsized companies (SMBs)? For starters, companies have been forced to shift to a more remote workforce where possible – think office workers. Some SMBs like startups have been embracing a remote workforce for a long time so it’s not such a big change. But that doesn’t mean it’s any easier for these companies to remain in compliance with the laws and regulations where they operate. Operationally speaking, when companies hire employees or create nexus in new jurisdictions they are faced with new compliance requirements. As they say, the devil is in the details. It’s these new requirements that leave many executives scratching their heads about what types of compliance they’re responsible for filing. So most turn to their high-priced CPAs and attorneys who themselves are typically not experts across the over 38,000 U.S. jurisdictions.
It’s become abundantly clear that a remote workforce is defining the Future of Work. According to an extensive 12,000 employee survey conducted by the Boston Consulting Group, “the future of work will be increasingly hybrid” and significantly more remote than pre-pandemic times. Even larger tech companies like Twitter and Facebook announced that they will allow employees to request a permanent remote work arrangement. So where does that leave the SMBs? As it related to compliance, it leaves them with a lot more complexity than they had just over a year ago.
Most SMBs use a patchwork of overpriced professional services and incompatible software like spreadsheets and email calendars. The problem with this approach is that the compliance data is stored in disparate systems or no system at all – like your filing cabinet. And how do figure out exactly which laws apply to your business? Thankfully, we built BIGcontrols to solve those problems. As a company’s single source of truth for all things compliance, our technology makes it easy to identify, manage and track your business compliance needs in a lightweight, secure platform. You have better things to do than worry about missing your regulatory obligations and paying fines. Welcome to managing compliance for the Future of Work!