For the vast majority of organizations, HR functions are not a luxury— especially the benefits administration and compliance pieces. Your company depends on HR’s critical role to keep you in compliance and out of legal trouble.
When businesses think about cutting costs, it’s tempting to look at lowering fixed expenses such as rent, electricity, insurance, salaries and employee benefits. Some employers have even decided to trim their HR departments in an effort to save money. But when it comes to reducing expenses, investing in your Human Resources team can yield big returns.
HR handles a huge range of activities relating to employees. From hiring staff, to implementing organizational strategies, to maintaining administration systems for payroll, employee benefits, and compliance tracking, these folks do some pretty heavy lifting.
As a local insurance agency, we’ve seen more than our share of St. Louis area businesses who desperately need help with compliance.
The stakes are high when you’re dealing with a part of the business that is regulated with potential fines and lawsuits. If you’re not following the rules, punitive fines, fees and litigation can literally bring down your business.
Compliance penalties for not keeping up with new regulations can be severe, including fines and criminal penalties.
- SPD violations can be $110 per day, per instance and up to $500,000 and/or include imprisonment for willful violation.
- The IRS penalty for late filing of a 5500-series return is $25 per day, up to a maximum of $15,000.
- The DOL penalty for late filing can run up to $1,100 per day, with no maximum.
- COBRA penalties can be complex and mounting, starting at $100 per day for tax penalties + $110 per day through ERISA, + actual benefit missed and legal fees.
Keeping up with these responsibilities is daunting, but the “I didn’t know!” defense isn’t going to help if you end up on the wrong side of the rules.
It’s your job to know your organizational responsibilities and operate within that space. If you don’t have the team, resources, and processes in place to manage it all, things can go wrong. Sometimes very wrong.
- Fines for non-compliance
- Litigation and attorney fees
- Lack of confidence in leadership
- Damage to the organizational brand
- Exposure to increased Workers’ Comp fees
- Inefficiencies due to lack of training and procedures
Investing in your HR team and processes will help keep you in the safe zone. Start by breaking your efforts down to the basic level to uncover your most pressing needs. Then review your current HR and compliance administration practices as a leadership team.
Discussing the importance of these issues allows for strategic-level input to address issues that may arise. Once you have an understanding of your greatest concerns, you can seek out the right solutions.
Is your employee benefits broker also a compliance consultant? A good broker will bring you policy options. A great broker will be willing (and excited!) to help you work through any HR and compliance challenges you may be facing.
If your current agent isn’t focused on finding creative business solutions, do yourself a huge favor and find someone who is.
Struggling with benefits administration and compliance? At Sonus, we’ve got tools to make it easier. We help businesses all throughout the Midwest identify organizational challenges and put customized solutions in place. From tailored benefit programs to human resource management services, we’ve got you covered.