Compliance is the state of conformity with established policies or specifications, or the process of achieving it.
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What is compliance?
Compliance means adhering to a set of rules, such as a policy, standard, specification, or law. In some cases, compliance is voluntary. Organizations opt for SOC (Service Organization Control) and ISO (International Standards Organization) certifications to improve their business operations and increase their competitive advantage.
In other cases, compliance is mandatory. Companies must comply with certain legal requirements, such as minimum wage laws or environmental, health and safety regulations. They must also comply with laws governing the handling of personal data and other sensitive information.
Failure to comply with laws and government regulations can lead to significant litigation, fines and even criminal charges, as well as reputational risks that can deter customers, employees and business partners.
Why is compliance important?
As a business grows, compliance in the areas of hiring, termination, discrimination, harassment, safety, wages, payroll and benefits becomes increasingly important. Ultimately, corporate compliance promotes sound business standards, which leads to a positive work environment and healthy company culture.
Compliance is important because:
- It reduces the risk of potential fines, penalties, labor strikes, lawsuits or company closures.
- Compliance with legal requirements and optional certifications builds trust with customers and strengthens competitive advantage.
- Employee retention increases when workers know they are in a safe, professional and fair environment.
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