A Practical Guide To Compliance In the Workplace [2024]

Compliance is an essential aspect of a well-run business. However, managing compliance in the workplace can be tricky as you have to account for multiple factors and increasing regulations. Also, not being compliant puts your business at risk for fines and reputational damage.

Workplace compliance becomes even more challenging in a hybrid environment. There are more cybersecurity considerations to keep in mind when working with a team that needs to access data across multiple devices in different locations. It’s also not as easy to ensure a safe workplace when people work outside of the office.

Understanding what compliance in the workplace is and how to manage it is the first step to ensuring your organization stays compliant.

Quick Answer:

Workplace compliance happens when businesses follow the legal and ethical standards set by government agencies, industry associations, and professional organizations.

How Does Compliance in the Workplace Work?

Compliance in the workplace is all about adhering to laws and regulations that govern different aspects of business operations. These guidelines cover everything from financial reporting processes and data protection to employee safety.

The Types of Workplace Compliance Frameworks

Workplace laws and regulations set standards across many business areas, from finances and data security to employee well-being and environmental responsibility. Some types of compliance — like data security — apply universally while others (e.g. anti-money laundering) target specific industries.

Here are some of the most common types of compliance regulations businesses need to follow:

• Medicare & Medicaid Act (Social Security Amendments of 1965): Health insurance offerings provided to employees must comply with federal programs.
• Clean Water Act (CWA) & Clean Air Act (CAA): Businesses whose work may impact water and air quality, like manufacturers or construction companies, must manage their facilities in a way that ensures they don’t create water or air pollution.
• Anti-Money Laundering Act (AML): Financial institutions like banks and investment companies must monitor the flow of money through the business and report any suspicious activity.
• Federal Information Security Modernization Act: Federal contractors must implement robust cybersecurity measures to protect government data.
• General Data Protection Regulation (GDPR): Businesses collecting personal information of EU citizens must obtain consent for and ensure the security of that data.
• Health Insurance Portability and Accountability Act (HIPAA): Healthcare businesses like medical billing companies and private practices must protect patient data across systems.
• Employment laws and regulations: All employees must receive fair pay, benefits, and operate in safe working conditions.
• Taxation laws: All businesses must file taxes correctly based on the tax laws that apply to each employee.
• ISO/IEC 27001: Company information must be protected with strong data security processes.
• Occupational Safety and Health Act (OSHA): Employees must have access to safe and ergonomic workspaces.
• Payment Card Industry Data Security Standard (PCI DSS): Businesses handling online transactions must have measures in place to protect customer payment data.
• Service Organization Controls (SOC) 1 & 2: All entities must implement and maintain strong financial reporting controls and data privacy practices.
• Sarbanes-Oxley Act: Publicly traded companies, think Apple or Warner Brothers, must make timely and accurate financial disclosures.

Why Is Workplace Compliance Important?

Compliance in the workplace helps to protect your business’s reputation and build trust. It’s also important if you want to avoid legal action, fines, and penalties.

Protecting Your Reputation

Showing that you’re committed to legal and ethical business practices can help you to build a positive reputation in your industry.

On the other hand, failing to comply with laws and regulations can lead to damaged relationships, legal battles, and negative publicity — all of which can harm your brand’s image and earning capacity in the long term.

Building Trust

Adhering to the legal standards set by regulatory bodies demonstrates integrity around your business practices. This helps employees, customers, and other stakeholders feel secure when interacting with your business.

Cookie notices are a great example here. Placing a clear cookie notice on your company website helps you comply with data privacy regulations. It also creates transparency, by giving visitors the confidence that you’re handling their data responsibly.

Avoid Legal Action, Fines, and Penalties

Non-compliance with regulations can result in expensive legal battles, fines, and penalties. Over the course of 2023, courts in the EU handed out 511 fines to the value of €2,080,156,542 to businesses that failed to comply with the GDPR.

On top of the immediate financial difficulties this can cause, the bad press that comes from these actions can seriously damage your business’s reputation and potential future earnings.

Minimize Costs

Complying with all of the rules and regulations that apply to your business will help you avoid a variety of costs that can result from noncompliance.

For example, according to IBM’s Cost of Data Breach Report, data breaches are common across businesses, but they cost organizations with low levels of regulatory compliance 12.6% ($560,000) more, on average, to remedy than those that comply.

Compliance Challenges in Hybrid Environments

As we’ve mentioned, hybrid businesses face some unique compliance challenges.

Being aware of these challenges can help you address them. By understanding the potential risks, you can put strategies in place that enable you to achieve and maintain compliance to safeguard your operations.

Data Security

According to the IBM Cost of Data Breach Report, 5% of data breaches involve remote employees. One reason for this is that these employees connect their devices to multiple networks — some of which likely aren’t secured — when they’re working outside of the office.

This complicates the implementation of security protocols and can leave sensitive company information vulnerable to hackers.

Another factor here is desk sharing. Having multiple people use the same space increases the possibility that confidential files or other information might be left out in the open, which increases the risk of accidental exposure or unauthorized access.

Working Conditions

Businesses must ensure that their teams are working reasonable hours and that they have the right equipment to do their job without excessive physical stress, both to achieve compliance and improve the employee experience.

Tracking working hours and overtime accurately is more difficult when employees aren’t working in the office. Ergonomics is another concern here, because employees may not have fit-for-purpose workstations at home, which could lead to health issues.

Monitoring, Reporting, and Maintaining Standards

Oversight is inherently more difficult in a hybrid environment. With data coming in from multiple sources, reporting can be fragmented and it can be tougher to identify potential compliance breaches.

Plus, because remote work often blurs the line between personal and professional, it can lead to inconsistencies in the application of organizational values.

How to Achieve Compliance in the Workplace

Compliance is a key feature of any effective workplace strategy. By being proactive in taking the steps outlined in this section, you can create a compliant hybrid environment where your employees thrive.

Conduct Compliance Assessments

To achieve and maintain compliance in the long term, you need to understand which regulations apply to your organization. You also need to keep an eye on changes implemented by the regulator in your industry to ensure you stay up to date with the latest requirements.

For example, if your business is in the healthcare sector, you need to safeguard patient data to stay compliant with HIPAA. On top of that, if any of your customers are EU citizens, you’ll also have to adhere to the GDPR’s guidelines.

Identifying relevant regulations and conducting risk assessments allows you to proactively address potential issues and implement safeguards that can help you achieve compliance and avoid legal penalties.

Create a Compliance Crew

Having a team dedicated to compliance is one of the best ways to ensure that your business stays on the right side of the law. It’s a good idea to nominate a:

• Compliance manager: Oversees the development and implementation of internal compliance policies and ensures they align with regulations.
• Data protection officer: Manages data privacy and security to ensure compliance with data protection laws (e.g. GDPR).
• Risk management officer: Identifies potential compliance risks and implements strategies to mitigate them.

It’s good to note that you don’t necessarily have to hire for these roles specifically. Compliance duties can be added to existing employees’ roles, so be sure to explore this possibility before adding more members to your team.

Develop Policies

Clear, detailed compliance policies are essential for addressing the risks of non-compliance in the hybrid work environment. These documents should outline the procedures that must be followed and how to meet requirements.

Robust compliance policies will help you prevent regulatory violations, protecting you from potential legal and financial penalties. Make sure your policies are clear and accessible to your workforce.

Take Advantage of Technology

Investing in the right software can help you stay on top of compliance. Plus, it can enhance the employee experience and help you better manage your workforce.

The right software enables you to create a more organized and efficient work environment. For example, OfficeRnD Workplace enables you to monitor workplace collaboration and space utilization, which will give you a better idea of how your employees are performing.

Plus, it has all the security certifications and it completed its annual SOC2 audit.

Train Your Team

Having a team that’s well-versed in compliance is essential for avoiding costly mistakes. According to 2023 research from the Ponemon Institute, 4,019 incidents where employees exposed sensitive business data to external parties were due to negligence or mistakes.

This accounted for 55% of all insider incidents and cost businesses more than $2 billion.

Regular training helps employees stay informed about evolving compliance rules and reduces the likelihood that they’ll inadvertently break the rules. Aside from mitigating risks, it will also create a culture of accountability within your business.

Embed Compliance into Your Operations

There are a lot of compliance tasks to be taken care of, especially in a hybrid environment, from conducting risk assessments to developing policies and evaluating your efforts. But with the right tools and strategies in place, achieving workplace compliance doesn’t have to be an uphill battle.

OfficeRnD Workplace is a hybrid work management solution that simplifies workplace management for hybrid businesses. Our platform can help you create and implement workplace policies that meet the requirements of compliance regulations and keep your employees engaged.

FAQ

What does workplace compliance mean?

Workplace compliance is all about adhering to the laws that apply to your business. These regulations help to ensure that businesses operate ethically and responsibly. They govern everything from health and safety to taxation.

What is an example of compliance?

An example of compliance is designing an office to ensure that there is enough space for each hybrid employee. This would help your business comply with the various requirements for office health and safety set by the Occupational Safety and Health Act.

How do you demonstrate compliance at work?

It’s important to keep records of your efforts to demonstrate workplace compliance. Ensure that you have a centralized repository of your company policies, training sessions (including employee attendance records), and compliance-related paperwork. This will make it easier to demonstrate compliance if you’re audited.

What are the five key areas of compliance?

The five key areas of compliance are data protection, employee health and safety, financial reporting, environmental protection, and fair labor practices. The rules and regulations in these areas ensure businesses operate in a fair and sustainable way.

What are the Three Types of Compliance?

The three types of compliance are:

1. Regulatory Compliance: Adhering to laws and regulations set by government bodies, such as data protection or workplace safety laws.
2. Corporate Compliance: Following internal company policies and procedures to maintain ethical standards, prevent misconduct, and ensure operational efficiency.
3. Industry Compliance: Meeting standards specific to an industry, like financial reporting standards for finance or HIPAA regulations for healthcare.

These types of compliance ensure legal, ethical, and industry-specific practices are upheld, helping organizations operate responsibly and effectively.

How does your Workplace Manage Compliance?

Workplaces manage compliance by establishing clear policies and procedures that align with relevant laws and industry standards. They often implement regular training programs to ensure employees understand and adhere to these guidelines, covering areas like data security, workplace safety, and ethical conduct. Many organizations use compliance management software to monitor, document, and report compliance activities, making it easier to identify and address any issues proactively. Regular audits and risk assessments further support compliance efforts, helping to maintain accountability and mitigate potential legal risks.

What are Bad Compliance Examples?

Bad compliance examples include ignoring regulatory requirements, such as failing to adhere to workplace safety standards, which can endanger employees and lead to legal penalties. Another example is inadequate data protection practices, like storing sensitive customer information without encryption, risking data breaches, and violations of privacy laws. Allowing untrained employees to handle tasks that require regulatory knowledge can lead to mistakes, non-compliance, and damage to the organization’s reputation.