Along with state and local laws to follow, there are numerous federal laws that small businesses must be in compliance with.
Thanks to the Small Business Paperwork Relief Act of 2002, each federal agency must establish a point of contact to act as a liaison between the agency and small businesses. The U.S. Small Business Administration lists 42 federal compliance contacts and resources, from the U.S. Army Corps of Engineers to the U.S. Agency for International Development.
For each federal agency, the contact information includes names of its small business ombudsman, their email address and phone number, and small business guides in English and sometimes in Spanish for the agency’s compliance requirements, among other information.
Federal Labor Laws
Probably one of the areas where compliance questions are most common from a small business is from the U.S. Department of Labor, or DOL.
Its Employment Law Guide describes 24 major laws enforced by DOL in easy-to-understand language. These include laws on wages, safety and health standards, benefits, work authorization for non-U.S. citizens, working conditions for federal contracts, employment nondiscrimination, and whistleblower protections.
There’s a long list of workplace poster requirements for small businesses. The DOL provides electronic copies of the required posters, and some are available in languages other than English.
Not all employers are covered by the DOL statutes, and may not have to post certain posters. For example, some small businesses may not be covered by the Family and Medical Leave Act and don’t have to post such notices.
Worker Safety and Health
Compliance information from the Occupational Safety & Health Administration, or OSHA, is also provided to small businesses. OSHA is part of the DOL but has its own compliance requirements.
OSHA has a free on-site consultation program to offer free and confidential safety and occupational health advice to business, with priority given to high-hazard worksites. In fiscal year 2013, about 30,000 program visits to small business worksites covering 1.5 million workers were conducted.
Internal Compliance
While the above compliance regulations are external — imposed and enforced by state or federal authority — other forms of compliance are done by companies.
Internal compliance measures are usually required by state governments for certain business entities, such as corporations and LLCs. They’re formed and enforced internally by a company’s upper staff.
Corporations have strict internal requirements. These include having a board of directors, annual director meetings, updating bylaws, providing stock to shareholders, and transcribing all stock transfers.
Other small businesses, such as LLCs, don’t have the same compliance requirements but are advised to keep updated records of business transactions and changes in operations or standards.
Internal requirements are largely meant to ensure a corporation is being run with integrity and free of corruption. Some parts, such as stock sales, will also be governed by external requirements.
More External Requirements
Corporations sanctioned by the state where they’re incorporated and where they do business also face external government requirements. These include an annual statement or report and a franchise tax that must be paid to operate in a state.
Penalties for noncompliance with regulations can be imposed by state and federal authorities, ranging from small fines to suspending a business. Whatever the possible penalty, it can make researching the laws governing your business worthwhile.
