Compliance is a catch-all term for how well you mind the rules—the laws and regulations governing your business. The challenge is these range from federal to state to local and are often unique to business size, industry, etc. The sheer volume is enough to make your head spin whether you’re just starting out or are an established woman business owner.
In fact, a study by the National Small Business Association found that 44 percent of small business owners spend 40 hours or more per year on federal compliance. Moreover, 12 percent report not knowing the source of many of the regulations affecting their business.
The secret to successfully navigating and complying with laws and regulations that touch on everything from how we manage our businesses and employees to how we interact with our customers is understanding the most important rules, knowing where to turn for information and cultivating relationships with your attorney, accountant, etc. who can expertly guide you.
So what regulations are most important for you to understand as a business owner? Let’s break them down:
Tax Code: For most small business owners, taxes top their list of regulation questions. But there’s more to taxes than merely paying them—like knowing which business taxes to pay, when to pay them and how to set up your business to account for future payments. A good accountant can help. Also, check out the IRS Small Businesses and Self-Employed Tax Center.
Employment and Labor Law: Once your business has grown beyond just you, you’ll need to know about federal and state labor laws related to workers and independent contractors. Just starting out? The Department of Labor’s (DOL) FirstStep Employment Law Advisor is a great resource. Already established? Make your attorney your go-to.
Insurance: As soon as you hire your first employee, you’re legally obligated (with the exception of Texas) to purchase workers’ compensation insurance, which protects you and your employee in the case of an accident on the job. This DOL Workers’ Compensation page is worth a visit.
Advertising and Marketing: Advertising can propel your business. Just make sure you’re playing by the rules—for example, that the claims in your ads are not deceptive. Here are tips from the Federal Trade Commission. Similarly, if your business does email marketing, you’ll need to comply regulations under the CAN-SPAM Act.
Environmental Regulations: Depending on your industry or business, you might be subject to environmental protection laws. This is especially true if you’re marketing cleaning products, food or anything claiming to be natural, organic or eco-friendly. The EPA Small Business Gateway can help.
Privacy: As you continue to grow, you’ll amass a ton of personal information about employees and customers. There are rules and regulations about how you must save and secure this information. For instance, the Health Insurance Portability and Accountability Act (HIPAA) prohibits the release of employee health data without permission.
Licensing and Permits: Many state and local governments have their own requirements for businesses, and they’re just as important to understand. You might be wondering, for instance, “Do I need a business license?” In many states and localities, you do. This SBA page can get you started.
Pay Data: If you own a company with 100 or more people (or more than 50 if you’re a federal contractor), you’re required to annually report how much you pay them—broken down by race/ethnicity and gender—on an EEO-1 form to the Equal Employment Opportunity Commission. This ensures you’re complying with nondiscrimination laws.
Sales Tax: Most businesses that sell physical goods must collect sales tax from customers and submit it to their state’s revenue department. A few states do not collect sales tax. In general, the law requires that a business collects sales tax in any state with which it has a physical connection.
So how does NAWBO support you when it comes to minding the rules? We use our powerful bipartisan voice to shape them—advocating for laws and regulations that help to create both the avenue and environment to build sustainable women-owned businesses. For a look at our 2021 Advocacy Agenda, click here.
