Running a business is no small feat. Most business leaders understand that “the government regulates labor,” but many don’t realize just how many regulations are involved or the risks that come with noncompliance.
The Department of Labor (DOL) enforces a wide range of labor laws designed to protect employees and promote fair labor practices. However, for many small and medium-sized businesses (SMBs), navigating these rules can feel overwhelming, especially without a dedicated compliance team.
This article breaks down what the DOL regulates, what’s at stake if you fall out of compliance and how PrestigePEO helps you manage risk without hiring more staff.
In this article, you’ll learn:
- What the DOL regulates and why it matters for SMBs
- The real costs of noncompliance: fines, audits, legal risk and reputational harm
- How compliance supports long-term business growth
- Why partnering with PrestigePEO simplifies compliance without adding headcount
What the DOL Regulates
The DOL oversees a wide array of labor laws that affect businesses of all sizes, but SMBs often don’t realize the full breadth of these regulations. The main areas include:
Wage and Hour Laws
Wage and hour laws are designed to ensure that employees receive fair compensation for their work. The Fair Labor Standards Act (FLSA):
- Sets the federal minimum wage
- Mandates overtime pay for eligible employees
- Establishes guidelines for child labor
SMBs must comply with these regulations by tracking employee hours, paying the appropriate wages and maintaining proper records. Lack of employer compliance with wage and hour laws can result in significant financial penalties and damage to the business’s reputation.
Recordkeeping Requirements
The DOL requires businesses to maintain detailed records of employee hours worked, wages paid and other employment-related information. These records must be kept for three years and readily available for inspection by the DOL and other regulatory agencies. SMBs must have effective recordkeeping systems to ensure that they can provide the necessary documentation in the event of an audit or investigation.
Occupational Safety and Health Standards (OSHA)
OSHA sets standards to keep workplaces safe for employees. All businesses are required to comply with OSHA regulations by:
- Identifying and mitigating workplace hazards
- Providing appropriate safety training
- Maintaining records of workplace injuries and illnesses.
Noncompliance with OSHA standards can result in costly fines, increased workers’ compensation premiums and potential legal liability.
Family and Medical Leave Act (FMLA)
The FMLA provides eligible employees with unpaid, job-protected leave for qualifying family and medical reasons. Employers must understand their obligations under the FMLA, including employee eligibility requirements, leave entitlements and notice and documentation requirements.
Understanding and adhering to these DOL regulations is crucial for growing businesses to maintain legal compliance and foster a positive workplace culture.
The Risks of Noncompliance
Some SMBs view compliance as a burdensome cost. But the truth is, noncompliance is much more expensive, in terms of time, money and trust.
Financial Penalties
Violations of wage laws can lead to back pay, damages, and civil penalties. OSHA fines can be especially steep for repeat or willful violations.
For businesses with limited budgets, even a single violation can divert resources away from growth and innovation.
PrestigePEO helps SMBs stay ahead of wage and hour rules, OSHA regulations and other compliance areas by providing built-in systems, automated tracking, and proactive oversight. This reduces your risk of costly penalties and helps you stay focused on running your business.
Recruitment challenges
In today’s job market, offering competitive employee benefits is essential for attracting top talent. Companies that rely solely on MEC plans may struggle to compete with organizations that provide more robust health insurance options. Prospective employees often prioritize benefits packages when evaluating job offers and a lack of comprehensive healthcare coverage can be a significant deterrent.
Audits and investigations
DOL audits are time-consuming and disruptive. Gathering records, responding to inquiries, and making corrections takes time your team may not have.
Maintaining compliance from the start helps you avoid audits, and the stress that comes with them.
The Prestige team assists with documentation, handles audit readiness and provides expert guidance during investigations. You won’t have to face the DOL alone; we’re right there with you.
Legal liability and lawsuits
Employees or regulators can take legal action if your business fails to comply with labor laws. The result? Costly settlements and possible damage to your workplace culture.
Proactive compliance reduces the risk of lawsuits and helps build a stronger, more supportive environment for your employees.
PrestigePEO helps reduce legal exposure by keeping your HR policies aligned with current laws, training your team and offering support before issues escalate. That means fewer surprises and fewer legal headaches.
Reputational damage
Compliance issues don’t just affect your internal operations—they can also impact your brand.
Employees who feel their rights aren’t protected may disengage or leave. Negative press can harm customer relationships and make it harder to attract top talent.
A reputation for compliance and fairness supports long-term success.
With consistent support from PrestigePEO, your business builds a reputation for treating employees fairly and operating with integrity. That reputation helps attract top talent and strengthens relationships with clients and partners.
How PrestigePEO Ensures DOL Compliance for Small Businesses
PrestigePEO goes beyond simple compliance; we help SMBs build proactive systems that prevent risks before they occur. Our integrated HR and compliance solutions give you visibility, confidence and ongoing support from experts who monitor every update and guide you through every audit.
Here’s what you get when you partner with PrestigePEO:
Built-In Systems and Smart Policy Frameworks
We provide tailored Human Resource solutions that automate recordkeeping, track employee data and simplify documentation, so you’re always prepared for audits or reviews.
Ongoing Audits and Practical Training
We regularly review your Human Resource processes to identify any compliance gaps before they become liabilities. Our training programs and Human Resources Consulting service keep your team informed and confident.
Real-Time Monitoring of Regulatory Changes
From wage laws to OSHA updates, labor regulations change frequently. PrestigePEO tracks these changes and provides actionable updates so you’re never caught off guard.
Support When It Matters Most
Should the DOL come knocking, you’ll have experienced professionals by your side. We help with documentation, communication, and next steps, ensuring you’re ready to respond.
Navigate Compliance with Confidence and Strategic Insight With PrestigePEO
Ready to protect your business and move forward with confidence? The Department of Labor oversees many aspects of employee protection, and noncompliance can pose significant risks for SMBs. However, by partnering with PrestigePEO, SMBs can effectively manage these risks and focus on their core business objectives.
Compliance shouldn’t slow you down; it should give you confidence.
Partner with PrestigePEO to simplify DOL compliance, protect your business, and focus on what matters most: growth.
Contact us today to learn how PrestigePEO helps SMBs navigate labor laws with confidence and peace of mind.
