Table of Contents
- Types of Regulatory Compliance
- Regulatory Compliance by Law Examples
- 1. Financial industry
- 2. Technology/Data Security
- 3. Healthcare
- 4. Civil Rights
- 5. Employment/Workplace
- How to Improve Regulatory Compliance
- 1. Assess Your Organization’s Exposure to Regulations
- 2. Write SOP Checklists in Clear Language
- 3. Digitize Standard Operating Procedures (SOPs)
- 4. Adopt a “Single Source of Truth”
- 5. Make Compliance Documents Accessible
- 6. Centralize Employee Communication
- 7. Update Compliance Policies Annually
- 8. Perform Compliance-Training Needs Assessment
- 9. Hire Experienced Attorneys
- 10. Choose User-Friendly Software to Improve Regulatory Compliance
- Improve Regulatory Compliance & Standard Operating Procedures
The average cost for organizations facing non-compliance issues is $14.8 million, according to a 2017 Ponemon Institute and Globalscape study.
Surprisingly, the biggest financial expense of non-compliance isn’t the penalties—it’s disruption to business. Regulatory agencies can force companies found in violation to completely shut down operations to make necessary changes.
Which begs the question: why do many organizations fail to meet compliance standards? The simplest reason for non-compliance is disorganization. Large organizations with a presence in several locations, each with its own unique mandates, may struggle to organize binders full of regulatory requirements.
Lack of leadership, accountability, and operational systems are other common stumbling blocks to compliance. In this article, we’ll share nine steps on how to improve regulatory compliance programs. Let’s begin with a quick rundown of compliance types.
Types of Regulatory Compliance
Regulatory compliance, also known as business compliance, refers to adhering to dictated requirements, regulations, and laws.
Government entities are the most commonly recognized regulators of compliance, both at state and federal levels. Their mandates dictate how organizations should conduct business, interact with customers, and treat employees.
However, individual regulatory agencies also guide specific industries regarding permits, licensing, certifications, accreditation, industry standards and codes of practice, and client contracts. Before you begin seeking to improve regulatory compliance, it’s helpful to review its many types.
Regulatory Compliance by Law Examples
Below are U.S. industry-specific compliance regulation examples:
1. Financial industry
- The Dodd-Frank Act legislating transparency and accountability
- Payment Card Industry Data Security Standard (PCI DSS) increasing the security of credit and debit card transactions
- Sarbanes-Oxley Act (SOX) providing auditing and financial regulations for publicly traded companies
- Gramm–Leach–Bliley Act (GLBA) governing the consolidation of commercial banks, investment banks, securities firms, and insurance companies
- Fair Credit Reporting Act of 1970 regulating the access and collection of personal credit reports and credit information
- Sherman Act of 1890 prohibiting anti-competitive agreements between companies that may create monopolies
- Securities Exchange Act of 1934 establishing the Securities and Exchange Commission (SEC) to govern securities’ transactions in the U.S.
- Securities Act of 1933 increasing transparency in financial statements to minimize fraud
- Bank Secrecy Act (BSA) assisting the government in detecting and preventing money laundering
2. Technology/Data Security
- Federal Information Security Modernization Act (FISMA) keeping federal information-technology systems secure from data breaches and other outside intrusions
- EU General Data Protection Regulation of 2016 regulating how organizations process an individual’s personal data
- California Senate Bill 1386 requiring organizations operating in California to notify residents of data breaches that are likely to expose personal information
- Health Insurance Portability and Accountability Act (HIPAA) regulating how organizations disclose and use individual’s health information and protects workers’ health insurance coverage
- The Health Information Technology for Economic and Clinical Health (HITECH) Act promoting the adoption and meaningful use of health information technology
- The Medicare Access & CHIP (Children’s Health Insurance Program) Reauthorization Act (MACRA) of 2015 addressing payment for doctors and Medicare Part B cost controls
4. Civil Rights
- Civil Rights Act of 1964 banning racial, gender, and religious discrimination, among others
- Americans with Disabilities Act baning discrimination based on an individual’s disability
- Fair Labor Standards Act (FLSA) determining the minimum wage, overtime pay, and other standards for U.S. workers
- Family and Medical Leave Act (FMLA) establishing the grounds for which employees are entitled to unpaid leave for medical and family reasons
- Worker Adjustment and Retraining Notification (WARN) Act of 2003 requiring employers to give advance notice in case of plant closures and mass layoffs
- Equal Pay Act of 1963 addressing wage discrimination based on gender
- Federal Workers’ Compensation Act (FECA) establishing compensation for federal workers who get injured on the job
- Uniformed Services Employment and Reemployment Rights Act (USERRA) protecting military officers’ civilian job rights while on military duty
Other common types of compliances regulations include Hazard Analysis and Critical Control Points (HACCP) for food safety, the Employee Retirement Income Security Act (ERISA) for employee benefit plans, and the Social Security Act of 1935 that establishes disabled and retired citizens’ social security systems.
How to Improve Regulatory Compliance
Several factors determine compliance requirements, including business type, industry sector, location, and risk management. Regardless of the type of regulations your organization must follow, the following organizational tips can help improve regulatory compliance:
1. Assess Your Organization’s Exposure to Regulations
Determine if your industry is highly regulated and document all mandatory regulations. The requirements set forth by Occupational Safety and Health Administration, Equal Employment Opportunity Commission (EEOC), and Environmental Protection Agency (EPA) are baseline priorities for every U.S. business.
For example, OSHA’s General Duty Clause enforces worker health and safety. OSHA compliance inspectors look for anything that can cause danger or bodily harm. As global interaction increases, laws and regulations call for increased regulatory compliance and quality management through effective standard operating procedures (SOPs).
2. Write SOP Checklists in Clear Language
Creating SOPs establishes consistency in operations and compliance. SOPs are documented step-by-step instructions for completing task workflows. They also document employee accountability and prevent noncompliance. SOPs should be written in clear language that can be easily understood by everyone across the organization. Avoid communicating legal and technical jargon to improve regulatory compliance.
3. Digitize Standard Operating Procedures (SOPs)
Today’s technology leaders are ditching paper stacks for digitized standard operating procedures. Software solutions like MaintainX allow businesses to automate digital checklist assignments. :
Managers can monitor the progress of compliance tasks completed in real time.
Digital SOPs provide noteworthy advantages over their paper counterparts, including
- Improving the quality and availability of compliance data
- Documenting worker accountability with audit trails
- Preventing noncompliance
- Avoiding SOP errors and variations
- Reducing downtime when staff leave or are out sick
- Reducing new employee learning curves
OSHA, in fact, requires businesses to submit reports digitally. And the U.S. Food and Drug Administration (FDA) promotes Good Manufacturing Practices (GMPs) requiring companies to distribute new or revised SOPs promptly. Additionally, each employee must validate the receipt and understanding of said procedures. A digitized SOP system supports each of these goals.
4. Adopt a “Single Source of Truth”
A “single source of truth” for organizational regulatory teams helps keep everyone on the same page. The phrase refers to having only one source of organizational data points that employees can reference easily. This strategy enables organizations to manage high volumes of information with minimal compliance errors. Siloed teams increase the risk of misinformation and noncompliance.
5. Make Compliance Documents Accessible
Another simple way to improve regulatory compliance? Make your documented processes and policies accessible. Your employees should have easy access to regulatory requirements at all times to remind themselves of their responsibilities as needed. Scroll to the bottom of this article to learn more about how digitized SOPs and software can help.
6. Centralize Employee Communication
Organizations should adopt centralized employee communication policies to minimize the risk of information getting in the wrong hands. It also makes it easier for information to flow between management and task-based workers. Many offices use the connected workforce software Slack for their internal communication needs. Other common workplace messaging platforms include Microsoft Teams and Chanty. If you’re looking to combine work order compliance software with instant messaging, check out MaintainX:
Our CMMS app allows team members to instant message one another from both desktop and mobile devices. The platform also features work order commenting that further ensures important communications stay organized within digital audit trails. The best part? MaintainX’s basic plan, which includes unlimited team messaging, is always free.
7. Update Compliance Policies Annually
The secret to regulatory compliance is continuous improvement as the organization grows, expands, or merges. New risks are always present with changes to business structures and should be mitigated. Updating compliance policies annually helps reduce any associated vulnerabilities and risks.
8. Perform Compliance-Training Needs Assessment
Providing training to guard against every potential compliance issue can get expensive. For this reason, companies should perform training needs assessments to avoid wasting time teaching employees what they already know. These assessments can identify current levels of competency, skill, and knowledge of required standards.
9. Hire Experienced Attorneys
As they say in law, ignorance is no defense. Overlooking the smallest details ends up crippling some organizations. Consult a legal advisor to ensure you’re compliance with all local and federal requirements. When sourcing advisors, choose a professional experienced with your industry regulations.
10. Choose User-Friendly Software to Improve Regulatory Compliance
Document management is, perhaps, the largest hurdle in regulatory compliance. Several different technology systems are available to streamline data collection. Popular options include Compliance Management Software, Computerized Maintenance Management Systems (CMMS), and Enterprise Asset Management (EAM) software.
Compliance management software tracks, monitors, and audits whether business processes are aligned with applicable laws, organizational policies, and consumer standards.
Alternatively, both CMMS and EAM data management tools help ensure compliance tasks are completed. These types of software provide a centralized database to track asset information, perform safety inspections, and audit compliance with regulations. Factors to consider when evaluating software include user-friendliness, scalability, customer support, and online reviews.
Improve Regulatory Compliance & Standard Operating Procedures
The bottom line: regulatory compliance requirements exist to keep stakeholders safe, businesses profitable, and environments protected. The key to improving regulatory compliance is getting organized with standard operating procedures. However, implementing efficient compliance processes without the right software can be time-consuming.
One of the best general compliance software platforms to help achieve compliance automation is MaintainX..Our CMMS allows managers to create standard operating procedures, pull historical records, and generate compliance reports within seconds.
Real-time insights make teams more agile, productive, and accountable. And the software makes it easy to update existing documents with continuous improvement requirements. Whether you’re a small business or a large enterprise, we’re confident your team will love our user-friendly platform.