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When an organization is trying to position itself as a leader in any sector, the point of compliance becomes a very important factor in deciding whether the company’s reputation stays intact or even improves with time. And in this case, there is no difference between legal and compliance in terms of importance.
A lot of the policies by the government are for the benefit of those in jobs but they also care for the employer. Without the employer, how can there be an employee? But it is when we talk of actual requirements, there is a toss-up between legal and compliance and many want to know if they both are the same, and if there is a difference, then what that is?
In this blog, we inform that there is a difference and then explore the differences between legal and statutory compliance in more detail.
What Is Legal Compliance?
Legal compliance means abiding by the laws set by the government, in the sense that something is allowed by the government or not. Legal compliance involves preparing documentation and contesting the case in court to support the corporation and absolve it of any accusation.
What Is Statutory Compliance?
Statutory compliance is the adherence to the legal framework around the set of laws that are drafted by the government. In effect, both statutory and legal compliance are almost the same, barring some differences which we will explore in the next section.
What are the Key Differences Between Legal and Compliance?
1. Nature and Scope
Legal compliance involves the complete set of laws that govern a company and for which the company can expect legal action if they do not accept and comply with them. Statutory compliance, on the other hand, refers to only those laws and regulations that are set by the government.
It does not include regulatory requirements, compliance with union laws, or internal compliance, etc. Another key difference is that law is about what is allowed and not allowed, whereas statute is about how an individual law is regulated.
2. Job Difference
The job of a lawyer or an advocate (one who handles legal) is all about ensuring that the corporation is safe. Because the lawyer will always stand in the best interests of the corporation, it is not his/her job to unearth the truth.
The job of a compliance professional is to understand whether the company is operating within the legal framework. He/she strives to work in the best interest of the rules and regulations governing the company.
3. Responsibility
When there is a problem, it is the compliance professional, along with other stakeholders in the enterprise, who must shoulder the responsibility. They must reason why there is non-compliance and investigate not just the causes, but the people involved.
The lawyer or the advocate is hired by the company to defend the company against any such accusation that could affect the compliance professional and other stakeholders in the company, including the CEO.
Why Does this Distinction Matter?
Let us now understand the difference between legal and statutory compliance matters. This distinction matters because the nature and scope of legal and compliance are entirely different, and this difference brings about the different nature of job and responsibilities for those that work in each of these different roles.
This also brings about a better sense of understanding and a better way of handling a company in a crisis, by a better classification and distinction between the role and the responsibilities associated with each.
5 Proactive Compliance Tips
Here are 5 proactive compliance tips you can work with:
1. Win over executive support
Winning over the support of the C-Suite is more important than people imagine. The C-Suite is responsible for key decisions in any company, and there is nothing more important than ensuring the company is compliant with statutory and regulatory guidelines, because this is what sustains an organization in a legally bound ethical manner.
2. Have the right people in compliance
Have qualified and well-trained people managing your compliance for you. Make sure that they are loyal and sincere to the company and yet honest and truthful in all their findings. Make sure that they know when to ask for help and they are updated with the latest rules and regulations put forth by governing authorities.
3. Document compliance efforts
All the compliance efforts must be documented, and a document trail must be maintained too. This will help us understand how the company has dealt with risks and opportunities, within the fabric of the law and dealt with threats in a proactive manner and reached its objectives. You could use this for future direction.
4. Build a culture of compliance
You can build a culture of compliance in the company by hiring people who are sincere and honest, an HR team with a clear vision and direction. You must also ensure that your suppliers also believe in compliance because you would eventually be selling products directly or indirectly from them.
5. Run a compliance audit regularly
Running a compliance audit regularly will ensure that your business stays compliant and knows that it is and derives confidence from it. This can not only boost the reputation of the company, but it can also uncover any malpractices. This will prevent any money being lost in fines.
Looking for A Compliance Partner?
Your search ends with Alp Consulting. Alp Consulting is a recruitment and staffing leader, with more than a decade of experience in organizational and particularly payroll compliance. Our teams are led by the best in the business, and we have served several Fortune 500 companies in the past across industries and continue to do so. Give us a ring and let us help fix your compliance issues.
