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Regulatory compliance is a cornerstone of responsible business. The trouble is, compared to actual cornerstones – which are stable and solid – regulatory compliance is more like molding putty.
There is a myriad of workplace compliance regulations, including some you might not realize apply to your business. Many of the regulations overlap. Others contradict.
In this complex landscape, a regulatory compliance policy is crucial for any business handling sensitive information. Which is just about every business in this data-driven world. Yours included.
Along with protecting your business from financial and legal risks, a compliance policy provides guidelines for how your employees should operate and make decisions.
This guide will explore data regulations in detail, outline the key requirements for regulatory compliance, and provide a guide for creating an effective regulatory compliance policy.
Table of Contents
What is regulatory compliance?
Regulatory compliance involves following the laws, regulations and specifications relevant to your industry and business activities.
It’s a subset of compliance management dealing specifically with regulations.
These regulations can come from federal and state governments and international bodies, including bodies outside of your main market. They impact everything from employee pay rates to maternity leave allowance, hiring policies, data handling processes, consumer protection, advertising and marketing, and workplace safety.
Time Doctor provides real-time analytics, detailed reports and automated alerts to help modern organizations monitor compliance.
What types of regulations might apply to your business?
In practice, there are dozens of regulations affecting most businesses, if not hundreds. We’re referring to labor laws, anti-discrimination legislation, workplace health and safety, and data privacy regulations.
However, we’re particularly interested in data privacy regulations and their role in workforce compliance. Those include GDPR, HIPAA, SOC 2 and ISO 27001.
GDPR: Protecting EU Data
The General Data Protection Regulation (GDPR) is a landmark European Union regulation that governs the processing of personal data. It applies to any organization that collects, stores, or processes data of EU residents, regardless of their location.
Key requirements of GDPR compliance include:
- Consent: Individuals must provide explicit consent before you can process their personal data.
- DPO: Appoint a Data Protection Officer (DPO) to oversee compliance.
- Breach notification: Notify authorities and affected individuals within 72 hours of a data breach.
- Data subject rights: Individuals have specific and wide-ranging rights, such as accessing, rectifying and erasing their data, restricting processing, and objecting to processing.
HIPAA: Protecting health information
The Health Insurance Portability and Accountability Act (HIPAA) is a U.S. federal law that protects the privacy and security of individually identifiable patient health information (PHI). It applies to healthcare providers, health plans, insurers and their business associates.
Key requirements of HIPAA compliance include:
- Security Rule: Establish safeguards to protect PHI from unauthorized access, disclosure, use, or modification.
- Privacy Rule: Protect the privacy of PHI by providing individuals with certain rights, such as the right to access, amend, and request a copy of their medical records.
- Breach Notification Rule: Notify individuals and the Department of Health and Human Services (HHS) of a data breach that compromises PHI.
SOC 2: Ensuring security, availability, and confidentiality
Service Organization Control 2 (SOC 2) is a framework developed by the American Institute of Certified Public Accountants (AICPA).
SOC 2 provides a common-sense framework for managing security, availability, processing integrity, confidentiality and privacy risks.
While not a legal requirement, SOC 2 compliance is often a prerequisite for doing business, especially in the technology and financial services industries.
Key requirements of SOC 2 compliance include:
- Data controls: Documented and evaluated across five “trust services criteria”; security, availability, integrity, confidentiality and privacy.
- Audits: Independent and accredited CPAs audit the effectiveness of these controls over time and provide a detailed report.
- Continuous improvement: SOC 2 compliance requires you to adapt the controls over time as security threats and data protection evolve.
ISO 27001: A Global Standard for Information Security
ISO 27001 is an international standard that provides a framework for information security management systems (ISMS). It outlines a set of controls and best practices that organizations can implement to protect their information assets.
If SOC 2 is the US-centric framework for data privacy controls, then ISO 27001 is the international playbook for best practices. It’s broader and more strategic.
Like SOC 2 compliance, ISO 27001 isn’t a legal requirement. However, certification demonstrates a high level of commitment to information security. That’s a competitive advantage.
Key requirements of ISO 27001 include:
- Information security policy: Establish a clear information security policy that defines the organization’s commitment to protecting its information assets.
- Risk assessment: Conduct a thorough risk assessment to identify potential threats and vulnerabilities.
- Controls implementation: Implement appropriate security controls to mitigate identified risks.
- Monitoring and review: Continuously monitor and review the information security management system to ensure its effectiveness.
The impact of all these regulations on your business
The regulations you need to follow depend on your industry, location, operating model, back-end systems, customer-facing activities and workforce profile.
Note the and there. Regulatory compliance is never a case of “or.” It’s always “and.”
To add to the confusion, it’s not always clear which regulations apply. For example, more than one international company has accidentally violated European data handling regulations by storing individual data on non-EU servers.
This is how firms find themselves in hot water with regulators. They design a process or operation to meet one standard, not realizing it violates another. Or they meet local laws but overlook the fact they’re doing business in a borderless online market.
Regulatory compliance is critical to avoid legal penalties, protect your brand, and ensure your stakeholders’ safety and well-being.
Looking inward, workforce compliance is just as important. It safeguards your operational integrity, protects employees’ rights, and reduces risk for employers and employees.
But compliance isn’t easy, as you can see from the long list above.
This is where a regulatory compliance policy becomes essential.
The role of a regulatory compliance policy in workforce compliance
A regulatory compliance policy establishes your organization’s commitment to compliance and provides the structure, systems and processes to ensure consistency.
A regulatory compliance policy provides a framework for understanding, implementing, and maintaining adherence to relevant laws, regulations and industry standards.
It’s the foundation of your overall compliance management system (CMS). It’s also an integral part of maintaining a healthy and productive workforce.
A well-crafted policy ensures that your organization:
- Identifies and addresses relevant risks
- Establishes roles, responsibilities and accountability
- Provides guidance for employees’ actions and decision-making
- Facilitates audits and assessments
- Supports a culture of compliance
- Keeps up with regulatory changes
- Continuously improves regulatory compliance
A regulatory compliance policy is an ongoing commitment. It’s an investment. One that ensures compliance is ingrained in your organization’s operations.
Creating a regulatory compliance policy
Define the scope
First, figure out which laws, regulations and industry standards apply to your business. Consider factors like location (including where your employees work and where customers come from), industry, size, and the activities you engage in.
It’s worth getting advice from a regulatory compliance specialist to ensure you don’t miss a step.
Assess the risks
Identify and assess potential risks to data privacy and security.
Start with your policies, processes and data handling controls. Next, look at how data is stored, transferred and used across your organization.
Ensure you consider third-party data handling. This tends to be a requirement for regulatory compliance. Assess how your business tools and applications contribute to – or threaten – regulatory compliance goals.
Assign responsibilities
Determine who will oversee compliance efforts, conduct risk assessments, implement procedures and monitor adherence.
Consider forming a committee or hiring compliance officers. Designating compliance champions ensures that responsibility is clearly defined across the organization.
Develop compliance procedures
Outline the procedures for ensuring compliance with each regulation. This includes how your organization monitors compliance, handles violations and reports to regulatory bodies.
Creating separate policies for each area of business is a good idea. However, you may not need to craft individual policies for each regulation. For example, a call center servicing Europe and North America might create an overarching policy that meets both GDPR and SOC 2 compliance requirements.
Implement training programs
Develop compliance training programs to educate employees on their responsibilities and best practices.
Make sure that these programs are relevant to specific teams or departments. Tailoring the training increases the likelihood of success and promotes a culture of compliance.
Follow our in-depth guide to compliance training to ensure your team has the skills and knowledge to meet their responsibilities.
Set up monitoring and reporting systems
Implement systems to track regulatory compliance risks and identify potential issues.
To do this, refer back to the goals you established earlier. Monitoring KPIs related to compliance – even if you can’t monitor compliance directly – helps to proactively address risks.
Conduct internal audits or engage independent auditors to assess compliance efforts and identify areas for improvement. Document the results (as well as policies, procedures and training records) to ensure you have a track record of compliance.
Time Doctor provides real-time analytics, detailed reports and automated alerts to help modern organizations monitor compliance.
Review and update regularly
Regulatory compliance is not a one-time effort. Regularly review and update your compliance policy to reflect changes in regulations, business operations and industry standards.
Establish mechanisms for employees to provide feedback on the policy and report compliance issues. Use this feedback to improve. Hopefully, this helps compliance become part of your organization’s cultural fabric over time.
Technology’s role in maintaining compliance
Technology plays a pivotal role in maintaining regulatory compliance with GDPR, HIPAA, SOC 2 and ISO 27001. With the right tech, you can streamline processes, reduce risks, protect data and ensure adherence to complex regulations.
We take workforce compliance seriously at Time Doctor. In addition to protecting personal data, Time Doctor actively supports regulatory compliance in several ways.
- Data minimization: You can customize the level of detail collected and erase data on request, ensuring compliance with GDPR data minimization and erasure principles. By default, you only collect data that’s absolutely necessary.
- Detailed reporting: Time Doctor provides comprehensive employee activity reports to help you identify compliance risks and investigate incidents. If your systems are compromised, Time Doctor’s detailed reports help you assess the scale and respond quickly.
- Built for borderless teams: Remote work adds even more complexity to regulatory compliance. Our platform is built on a best-practice model that makes it easier for you to meet the relevant requirements of doing business wherever you are.
- Secure data handling: Stringent data security protocols ensure employee information is protected to a standard that meets regulatory requirements. We employ encryption and other security measures to protect personal data, including employee work hours and productivity data, in transit and at rest.
- Access control: Time Doctor provides granular access control. Only the people you authorize can access sensitive employee data. This aligns with regulatory compliance requirements for managing access to information while reducing the risk of data breaches.
- Audit trails: Time Doctor’s logging capabilities help you create detailed audit trails that can be essential during regulatory compliance audits. These logs, enabled by employee monitoring, track who accessed which data, when, and what actions were taken.
- Supporting SOC 2 audits: Our platform helps you achieve SOC 2 compliance by ensuring data is processed and stored securely, available when you need it, protected from the wrong people, and handled with high integrity.
- Risk management: Time Doctor offers detailed insights into how data is collected, stored and accessed. Integrations with 60+ leading business apps give you visibility across every project and process so you can better identify potential risks and implement appropriate controls.
- Monitoring compliance training: You can easily track the time employees spend in compliance training, as well as any other task. This is critical for proving your organization’s commitment to compliance during inspections or audits.
- Documentation and reporting: Time Doctor generates detailed reports on website and app usage, suspicious unusual activity, employee performance and project management KPIs. These can all be used for regulatory compliance audits and continuous improvement initiatives.
Remove the stress from regulatory compliance
Time Doctor is more than just a time-tracking tool. It’s a critical component of your workforce compliance strategy, particularly when dealing with GDPR, HIPAA, SOC 2 and ISO 27001 regulations.
With robust security features, customizable data collection, detailed audit trails and transparent reporting, Time Doctor helps you meet and maintain regulatory compliance requirements.
Plus, Time Doctor is fully compliant with GDPR, HIPAA, ISO 27001 and soon SOC 2. This gives you confidence that mission-critical workday analytics data is contributing to your regulatory compliance efforts, not risking them.
Learn more about security and compliance at Time Doctor. View a free demo below.
Liam Martin is a serial entrepreneur, co-founder of Time Doctor, Staff.com, and the Running Remote Conference, and author of the Wall Street Journal bestseller, “Running Remote.” He advocates for remote work and helps businesses optimize their remote teams.
