Companies struggle enough with their day-to-day and long-term business challenges. But for many industries, compliance with laws and regulations creates yet another layer of complication.
Some industries are obviously more heavily regulated than others. Financial institutions and industries with a potential to impact the environment like petroleum and mining industries are prime examples. And it’s been argued that on a macroeconomic level, regulations can cost the U.S. economy as much as 2% in growth annually.
With the average gross domestic product (GDP) growth of the United States hovering between 1.5% and 2.6% since the Great Recession, that’s a significant impact.
Advantages of Effective Compliance
Companies that can effectively manage their compliance obligations have a double advantage: For one, they can be as efficient as possible in the labor and other costs that come with compliance efforts. In addition, they can avoid costly fines and regulatory penalties that might spring from noncompliance.
New Office of Compliance Emerges
Some of the broadest and most impactful regulations are at the federal level. And in a sign that the federal government recognizes both the burden of regulatory compliance and its macroeconomic impact on the U.S. economy, the U.S. Department of Labor (DOL) recently announced the creation of a new Office of Compliance Initiatives (OCI) aimed at expanding compliance outreach.
“OCI will promote greater understanding of federal labor laws and regulations, allowing job creators to prevent violations and protect Americans’ wages, workplace safety and health, retirement security, and other rights and benefits,” according to the announcement. “As part of its work, OCI will work with the enforcement agencies to refine their metrics to ensure the efficacy of the Department’s compliance assistance activities.”
Compliance efforts can be a major cost for companies in any industry. Additionally, the stress caused by being uncertain about whether they are in compliance with a wide range of regulatory and legal requirements can cause a lot of anxiety for organizations.
Even the most well-informed compliance department can benefit from outreach efforts like the DOL’s OCI, where the guidance comes from the very agency that is enacting the regulations.