HR compliance was an issue that many business owners and their employees had a problem with this past year – to the point of being fined, in some instances.
Capital management firm ADP found that nearly one-third of midsize business owners incurred fines, penalties, lawsuits or expenses that they hadn't planned for in the past 12 months. These resulted from not adhering to regulations mandated by the government as they relate to maintaining a workforce or payroll.
Some of this may have to do with entrepreneurs' preternatural confidence in their ability to be compliant. More than 80 percent of midsize business owners said that they were all but convinced that their company adequately conformed to regulations and tax laws, with roughly the same percentage saying the same about rules that govern the workforce, like retirement plan management and workers' compensation.
"Our research reveals a 'compliance overconfidence' in the midmarket that's creating costs these firms can ill afford," said Regina Lee, president of major account services for ADP's Canada division.
One of the biggest compliance issues that's set to go into effect in 2015 is the one concerning employee benefits, as the employer mandate requires all large business owners to provide coverage for workers who are full-time, or on the job at least 30 hours per week. The government decided to postpone the requirement, however, which would have gone into effect at the same time as the individual mandate.
Penalties may result for those companies who fail to adhere to this rule. The annual fee is $2,000 for each employee that is not given the option of employer-provided coverage. Additionally, the plans that are offered have to provide for 60 percent of health care costs.
