Small business owners face countless challenges: hiring employees, managing different kinds of retail operations, resolving scheduling issues, and dealing with supply chain issues, just to name a few.
But some of those problems can be mitigated by complying with the legal and policy requirements vendors and retailers have to follow.
In this article, we’re going to talk about two types of compliance requirements: what they are and how they can support your retail operations. Here’s a quick overview:
- Retail compliance: Vendors and vendor partners have to adhere to a retailer’s distribution requirements. This can also be called vendor compliance.
- Regulatory compliance: Local and federal legislative bodies make rules to protect workers like setting minimum wage requirements, establishing workplace safety policies, and regulating employee hours.
All in all, being aware of the retail and regulatory compliance laws that apply to you will help you avoid issues as you scale and improve the way you do business, so let’s dig into them a little deeper.
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What is compliance?
Compliance means adhering to a certain set of rules. Retail businesses are subject to an array of retail and regulatory compliance laws depending on their location and the specifics of their business — so to be compliant, they have to find out what those rules are and make sure they abide by them.
What is retail compliance?
Retail compliance — or vendor compliance — encompasses the requirements a retailer sets for its distribution infrastructure. Different retailers have different sets of requirements depending on their specific needs and inventory cycle.
For example, a home goods retailer might need a larger shipment in December to prepare for the upcoming holiday rush, while an office supplies retailer would want their biggest shipment in August before the school year starts.
Creating a reliable distribution infrastructure is complex, which is why retail compliance can encompass requirements for:
- Shipping and packaging guidelines and best practices
- Requirements to manage the supply chain in other retail environments like ecommerce and dropshipping
- Rules for warehouses handling fulfillment
- Customer support procedures
What is regulatory compliance?
Both retailers and vendors are subject to legislation designed to protect workers and assure safe working conditions — this is called regulatory compliance. Specific retail compliance legislation varies depending on the country or state where a retailer is doing business.
Every company, no matter the size, must comply with regulatory compliance laws or face federal fines or even jail time in the most extreme cases. And adhering to these regulations not only helps retail businesses avoid compliance issues, but also protects workers from unsafe business practices and overwork.
Retail compliance vs. regulatory compliance
Let’s review and expand on some of the key differences between retail compliance and regulatory compliance.
Retailers establish requirements their distribution partners need to comply with.
Government puts regulations in place that retailers and their retail partners need to comply with.
Requirements for a retailer’s distribution infrastructure.
Regulations related to labor, wages, and safety.
Can differ between retailers.
Can differ between countries and regions in certain cases (think state laws).
Requirements are in place to support a retailer’s financial goals.
Rules in place to protect workers’ rights, including the right to fair pay.
Non-compliance can result in chargebacks or even legal action.
Failure to comply can result in closure, federal fines, or even jail time.
Examples of regulatory compliance
Regulatory compliance encompasses an organization’s adherence to rules around business processes and workers’ rights. These include work-safety training and implementation, insurance requirements, and labor laws to guarantee minimum pay, overtime, hours, and record keeping.
Certain roles and work environments are more dangerous than others, but hazards can pop up in any workplace. Safety compliance is mandated by OH&S to keep you, your employees, and your customers free from harm.
To maintain a safe work environment for team members, use an app like Homebase to schedule regular safety training sessions and make sure staff certifications and paperwork are up to date. It’s best to reiterate safety guidelines every once in a while to enforce best practices and improve emergency awareness.
No business is a stranger to risk. While entrepreneurs do their best to mitigate issues when they come up, insurance coverage can protect you from unexpected expenses and bankruptcy — and some states even require it. Here are some of the most common reasons retailers get insurance:
- Temporary closure: Due to a certain recent global pandemic, many small businesses faced weeks and sometimes months of downtime, and many even went out of business. Business Interruption Insurance policies are popular with retailers because they can cover costs while your doors are closed.
- Theft: Large chains and multi-store retailers know that a portion of their merchandise will be lost to theft. Many also have finance departments that factor theft into their annual budgets. As a small retailer, it’s likely you don’t have those kinds of margins, so insurance can be handy to cover you against theft-related losses.
- Damage to your property: Depending on where you operate, natural disasters like snow storms, fires, and floods may be commonplace. But property insurance is there to help you rebuild if you end up in any of those unfortunate situations.
Businesses have to abide by federal, state, and local regulations that lay out how workers should be paid. Payday is a happy day for everyone, which is why it’s also a great idea to incorporate tools to easily manage payroll and guarantee that employee wages always go out on time.
Handy tools like Homebase automatically convert your employee timesheets into wages for payroll. You can also use our payroll tool to process and file your taxes and issue 1099s and W2s where necessary. Getting payroll right not only prevents you from getting into trouble with your taxes — it also boosts employee satisfaction and morale.
Labor compliance aims to protect workers by setting fair standards for wages, working hours, personal time off (PTO), and pay. Complying with labor laws is more than just a legal requirement; it also makes sure you’re taking good care of your team and helps avoid potential lawsuits that could put you out of business.
Be sure your business is labor compliant by having a good system in place to record hours, breaks, late clock-ins, and schedules. Homebase can help you keep records of employee hours but also gives your employees tools to clock in right from their phones and see a complete overview of the hours they’ve worked.
What retailers should keep track of to stay compliant
Regulations are constantly being updated to meet the demands of the ever-evolving retail industry. So it’s critical for retailers to keep on top of current legislation so they can respond appropriately to retail operations issues as they come up.
Keeping thorough records of everything from employee certificates to recent holiday requests is essential as retail compliance officers can ask businesses to present evidence of compliance at any time. Luckily, there are tools like Homebase that let you consult with certified HR advisors to make sure your business stays compliant.
Breaks, overtime & time off
Thanks to case studies in the 1930s that proved the need for time off, employers have been required to pay overtime since Congress enacted the Fair Labor Standards Act in 1938. So keeping track of data like overtime, breaks, and time off is just as important for a retail business to remain compliant as keeping records of regular working hours.
Employee paperwork & documentation
Paperwork can now be done digitally, but keeping good records is as important as ever to pass retail audits and avoid fines or legal battles.
These days you can organize employee data like emergency contact information, applications, payroll details, and employee certification in one convenient place using a helpful tool like Homebase.
Proper training & certification
Employees need to have relevant, valid certificates for their work in certain industries. And as you scale your small retail business and hire new team members, keeping track of things like employee certificate expiry dates can be difficult. But digital retail management platforms like Homebase can help you out by sending automatic alerts when an employee certificate is about to expire.
In addition to employee certification, schedule regular group training sessions to keep your team informed about your country or state’s latest safety requirements and practices.
Compliance audits, payroll & tax
Unsure if your business is compliant? Homebase offers a variety of compliance tools to help you meet requirements. For example, you can see your team roster and information in one place and get notified when labor laws change. You can also consult a certified HR advisor to prepare for an audit or ask for feedback about your business practices.
With all your employee information in one place, you can easily review relevant data, keep track of payroll, and make sure you’ve paid all your taxes. Homebase’s platform helps by sending taxes to the state and the IRS automatically, leaving you free to focus on higher-priority areas of your business.
Rules that protect small companies and workers
Both retail and regulatory compliance can work to benefit retail business operations. Retail compliance is essential for any small business owner wanting to stay ahead of issues like supply chain interruptions and damaged goods, while regulatory compliance ensures workers’ rights — protecting team members and providing them with a safe, enjoyable work environment.
Homebase can also come in handy if you want to make sure your small business adheres to applicable regulatory compliance laws. Our platform makes it easy to record, organize, and store employee data, keep track of scheduling and employee hours, manage payroll, and talk to an expert HR advisor.
Give your team the tools they deserve.
Homebase helps you create a great place to work.
Retail compliance FAQs
What are examples of regulatory compliance requirements?
Regulatory compliance covers laws and regulations related to workers’ rights, payroll, taxes, and work conditions. Here are some specific examples of regulatory compliance requirements:
- Safety, for example, workplace safety procedures and proper training requirements
- Insurance, for example, when businesses are required to have insurance in case of theft, property damage, or natural disaster
- Payroll, for example, how often employees should be paid
- Labor, for example, minimum wage requirements and scheduling and PTO regulations
What are retail standards?
Retail standards are rules set by retailers to maintain quality, stock, and pricing across their product line. For example, retail standards might include instructions for pricing soon-to-be-out-of-stock items. Major retailers like Walmart and Amazon also have visual requirements for things like store layouts and shelving.
What are the different types of compliance?
Some of the different types of compliance in retail include:
- Retail compliance: Retailers set requirements for vendors and vendor partners.
- Regulatory compliance: Legislation that protects workers and customers.
- Supply chain compliance: Commercial chains set standards across retail stores.
How can Homebase help with regulatory compliance?
Homebase can help with regulatory compliance by providing HR services to small retail companies that might not have their own HR department. With expert HR advisors available for live chat and a library of resources full of guides and training materials, small business owners can keep up to date on the latest rules and regulations and easily stay compliant. Why not get to know our platform for yourself with a free account?
Source by joinhomebase.com