Regulatory Compliance: Navigating the Complexities of State and Federal Regulations

Posted by: kevensteinberg
Category: Blog, Employment Law

The phrase regulatory compliance generally means adhering to applicable laws, regulations, and guidelines created by government entities or other regulatory bodies, and regulations can differ depending on the industry and jurisdiction a company operates in. Some of the regulatory agencies companies may have to deal with can include the Health Insurance Portability and Accountability Act (HIPAA), Occupational Safety and Health Administration (OSHA), United States Equal Employment Opportunity Commission (EEOC), Sarbanes-Oxley Act (SOX), California Consumer Privacy Act (CCPA), Payment Card Industry Data Security Standard (PCI DSS), and the Federal Information Security Management Act (FISMA).

Many companies have specifically hired officers or managers directly responsible for ensuring a company complies with all relevant regulations, and companies that fail to adhere to regulations can be forced to participate in remediation programs that involve audits and inspections by a regulatory agency. If your company is struggling to keep up with regulatory concerns, you will want to be sure you are working with an experienced Los Angeles small business attorney.

Navigating Regulations

Compliance will be important to maintaining a stable relationship between a company and its stakeholders such as clients, vendors, employees, and the government. Adhering to regulations will help companies protect their reputations, reduce legal fees, and avoid fines, penalties, and fees.

Regulations may relate to anti-bribery and corruption laws, environmental regulations, data privacy regulations, financial regulations, or health and safety regulations. The main problem with regulations is that they are changing frequently, so it can be difficult for a company to stay aware of the most recent changes.

This often means that a company can believe that it is in full compliance with all applicable regulations only to learn that standards have changed and now the company must adjust appropriately. Companies have to find a way to be able to adapt at a moment’s notice in many cases.

Regarding the aforementioned data privacy concerns, multiple companies have been hit hard by failures. Hilton Worldwide Holdings Inc. agreed to pay $700,000 in 2017 and bolster security as the result of data breaches that exposed over 363,000 credit card numbers.

Nationwide Mutual Insurance company agreed to pay a $5.5 million settlement for a 2012 data breach that exposed the personal information of an estimated 1.27 million consumers. Target Corp. agreed to pay $18.5 million to settle claims by 47 states and the District of Columbia and resolve a multi-state investigation into its massive data breach in 2013.

Complying with Regulations

Regulations exist for a reason, which is usually to help companies protect their businesses, employees, and customers. Compliance regulations are not in place just to make life difficult for companies, but are intended to benefit a company and many other people.

A company must take a comprehensive and intentional approach to creating an effective regulatory compliance program. Proper training will be important to implementing any program so employees can understand the importance of complying with regulations and how the regulations will impact their everyday jobs.

The first step to regulatory compliance begins with a comprehensive audit to determine a compliance baseline and identify where problems exist. A company should look at its security policies and risk management procedures.

Assessing risks will allow a company to identify risks and the likelihood of risks occurring as well as the potential impact on a business. After a company identifies its weaknesses, compliance gaps, or problem areas, it can put the best practices into action.

A company should be reviewing and tracking how much compliance violations have cost the business. 

A corporate compliance officer (CCO) is becoming a common role in many companies. A CCO will serve as the person who works for integrity, accountability, and ethics.

A CCO’s sole focus will be to stay aware of the constantly changing regulatory landscape and make appropriate compliance decisions.

Policies and procedures must address specific compliance areas identified in any audit. They also need to be reviewed regularly so a company can stay current with the frequently-changing regulations. 

It is also important for a company to note when employees read and sign applicable policies. This will be important for liability because a company can prove an employee knew a policy, read and acknowledged it, but violated it anyway.

Proper training will also be important for regulatory compliance. When a policy addresses specific compliance issues, training should reinforce proper behavior and ensure employees know what they are supposed to do.

When the entire workforce understands the importance of complying with regulations, it will ensure that important aspects are well understood. Compliance will not be about only a few people knowing what the latest regulations are and what they mean for operations, as everybody should be aware of the latest changes and be trained on how changes will impact them.

A company must develop regular review periods and audits, and seek input from subject-matter experts who can track regulatory changes and understand their possible impact on a business. This will allow a company to continually assess the effectiveness of a program and be proactive in its actions.

Contact Our Los Angeles Small Business Attorney

If you are feeling lost in understanding how federal or state regulations impact your business and what you can do to comply with them, make sure that you retain legal counsel. Steinberg Law is aware of how challenging regulatory issues can be for most companies, but we work closely with business owners to help them find the best possible solutions for their issues. 

Our firm offers a completely free initial consultation for you to discuss your case with us. You can call (818) 855-1103 or contact our Los Angeles small business attorney online to arrange a free consultation.

Author: kevensteinberg