If it seems like there are a lot of new regulations lately, you’re right. Last year alone, the U.S. Federal Register logged 3,378 final rules and regulations, from the IRS, FLSA and DOL. And many of these regulations impact businesses – and specifically touch at least one aspect of the “hire-to-retire” spectrum.
In other words, if your job description includes payroll tax, employment verification services, wage garnishments or benefits administration, your job description should also include compliance.
Despite the increasing volume of regulations and potential impact on businesses, there is still a lack of action, and in some cases, understanding, on what needs to be done to comply. Consider these stats:
- According to ADP research, only 25 percent of small businesses and 50 percent of midsized business are aware of new federal overtime requirements, which are currently set to go into effect on December 1, 2016 via FLSA.
- For ACA, the ADP Employer Confidence Report found that more than half of midsized companies (52%) and nearly half of large employers (45%) are not sure if they’re at risk of violating ACA compliance requirements this year. Some 16% specifically think they are at risk of violating the Forms 1094-C and 1095-C requirement.
As compliance becomes a larger part of how businesses operate, it’s also becoming a larger part of what ADP does every day – both for its clients and for itself. Recently, ADP’s CFO, Jan Siegmund, was interviewed by Compliance Week magazine about what it was like to take on the CFO role at a time with so many new regulations, and his views on how businesses need to focus their compliance efforts accordingly.
According to a quote from Jan in the article, “I get to deal with the compliance requirements for ADP as an enterprise, but I also have the opportunity to impact how these solutions are developed for our clients. I can be my own client for these products and solutions.” ACA is a prime example of this. “In his role as CFO, he has to oversee ACA-related client compliance solutions for some 10 million people within ADP’s client base, while also making sure ADP is itself compliance with the law,” according to Compliance Week. The article advises that the companies that need to comply (those with 50 or more employees) should watch out for things like employee subsidy eligibility, and whether or not the company knows if it has to pay fines as a result.
But even more than ACA, the FLSA overtime rules are putting a new burden on companies – because they affect virtually every employer in the United States. Many of the companies affected don’t have compliance experts on staff. In the article, Jan says “the FLSA overtime requirements are interesting because they are so easy to get wrong.”
Jan also has advice on things like working with the IRS, how to create a compliance program and making compliance strategic to the business. To read more on these insights, check out the full article from Compliance Week – The Unconventional CFO.