The Consequences Of Liability For Small Businesses

Regulatory fines. Doesn’t that seem like something you only hear about in the news? Some organization was found liable for not complying with a regulation, and now they have to pay thousands of dollars in fines.

While something like that may seem like it won’t or can’t ever happen to you, statistics tell a different story. According to research from the 2017 NSBA Small Business Regulations Survey one in 10 small businesses will be fined for regulatory noncompliance at some point. So, even though it may seem highly unlikely that you’ll ever be issued a citation, it’s actually quite possible.

More Statistics on Regulatory Fines

The 10 percent of businesses that were fined definitely felt the consequences of liability. The NSBA reported:

  • 72 percent of those that were fined were only fined once in the past five years, and 23 percent were fined two to five times.
  • Only five percent were fined more than five times.
  • For the 10 percent of small businesses that had been fined, 57 percent of them said the citations were for the same rule.

It’s interesting that the out of the one in 10 businesses that were fined, over half of them said the citations were for the same rule, meaning that they had been fined once, implemented no changes, and then were punished a second time.  

If you’re not already concerned about staying compliant, the average cost of each citation was $30,651.14. That’s a significant amount of money to have to pay for noncompliance. And if you were fined that more than once, your organization could be in financial trouble in a hurry.

How to Avoid the Fines

It’s most likely that these small businesses weren’t trying to rebel against regulations, and they definitely didn’t want to be fined. However, because regulations are so complex and overwhelming, it can be easy to overlook details or make a mistake, which can lead to heavy fines.

In order to avoid that mess, it’s important to have an action plan in place about how you deal with regulations and stay complaint. Maybe it’s having a lawyer look everything over and help you out. It could be using a reliable online resource, like, Or it could be as simple as paying an outside organization to handle all of the regulations for you, that way you don’t have to spend time dealing with it. Whatever you choose, the important part is that you ensure that you’re compliant and not at risk of being liable for any fines.

Does your organization need take any action steps in order to not be liable?

James Campbell

James Campbell is a District Sales Manager for Oasis, a Paychex® Company. By removing administrative obstacles, he allows growing companies to focus on what they do best. With the use of tailored technology and HR solutions, his clients operate their businesses more efficiently and cost effectively.


May 3, 2017

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James Campbell