It is hard to run a business, especially a small family business, with hundreds of possible code violations and fines in every city and state. It seems that there is a law about every single possible thing, from being required to post pricing, print receipts, what you can and cannot put on the sidewalks in front of your store, etc. With so many laws and regulations to sift through, how can any company thrive? Below are the top reasons that companies are fined, so make sure that you are complying with the rules and regulations nationally and locally.
HIPAA stands for the Health Information Privacy and Accountability Act. It was passed in 1996, requiring companies to uphold a certain standard of patient-doctor confidentiality. Fines can cost anywhere from $100 to $50,000, depending on the severity and the intention. There are three types of violations: unintentional, reasonable cause, and willful neglect. Unintentional violations are things that occur on accident, like failure to train employees properly so they make mistakes in data transfer.
Reasonable cause violations are violations that occurred intentionally. Willful neglect penalties are infringements that occur due to negligence on behalf of the health care provider. The fine can be less severe if the violation is corrected. It is important to keep healthcare information private, as if you make HIPAA violations, you are not only required to pay a fine, but you can also be sentenced to serve time in prison. Repeat violations can result in a $1.5 million fine, regardless of the severity. For more information on the types of fines (willful neglect, reasonable cause, and unintentional violations), check out this blog.
OSHA violations are becoming more frequent. OSHA is the the Occupational Safety and Health Administration, a federal organization whose purpose is to ensure that workers have safe and healthy work environments. Many small companies do not think about the possible repercussions of not having a safety plan, and find themselves slapped with hundreds of dollars of fines. The most common violations are:
Hazard Communications – If you do not include Material Safety Data Sheets (MSDS) on site, or not posting them in a place that all employees have access to. The average fine is $280.
Training – Failing to properly train your employees in regards to equipment and tools can lead to citations and fines down the road. The average fine for lack of training is $450.
Head Protection – Even if you have trained your employees properly, if they do not wear safety equipment like helmets, you can be cited and fined. The average Fine is $510.
Wiring Design and Protection – Improper circuiting is not only dangerous, but it can lead to citation. If you do not properly ground equipment, or incorrectly use electrical equipment, you run the risk of fines. The average fine for unsafe electrical equipment is $542.
Ladders – Unsafe, broken or bent ladders produce a serious hazard. Another less-known rule is that you are not allowed to do any work while on a ladder, just get from one point to another. The average fine for improper ladder use is $700.
Improper Evacuation Practices – Having an improper evacuation plan, not having proper permits, and not performing regular inspections all fall under evacuation citations. The average fine is $2,100.
Something you always have to watch out for is the IRS. There are many reasons why the IRS might fine your business, each with their own requirements for payment.
Underpayment of Taxes – If you underpay your taxes, the IRS will give you a penalty, and that may be more than you would have had to pay to begin with.
Late Filing Penalties – If you file your taxes late, you may be required to pay 5% extra per month.
Failure to Pay – If you fail to pay your taxes, you can be required to pay an additional .5% per month. That can increase up to 25% over time.
Inaccuracies – If you have errors on your tax return the IRS charges a 20% penalty. This can be from intentional or unintentional mistakes, or if you cannot prove tax deductions.
Tax Fraud – If the IRS can prove that you filed your taxes to commit fraud, they will charge a 75% penalty. File your taxes as honestly as possible.
There are many miscellaneous rules that every city and state have, and it is important to uphold them or else you may face fines. Those rules can be anything from inspecting fire extinguishers, showing prices, sweeping your sidewalks, printing receipts, renewing certificates, keeping a clean work environment (especially if you serve food or drinks), properly disposing of waste, etc. The fines can be as small as $50, or as large as a few thousand dollars. For example, in New York, if you do not have clean floors, walls, and ceilings, you can be fined $200. Another New York regulation requires you to properly show your payment and refund policies, or you could be fined up to $500. check out this blog.