The Cost of Non-Compliance in HR

What Your Business Can’t Afford to Ignore

 Every year, businesses lose millions due to HR-related compliance violations. From incorrect I-9 forms to mishandled harassment claims, the costs of non-compliance extend far beyond fines—they can lead to lawsuits, reputational damage, and loss of top talent.

Below, we break down the most common HR compliance pitfalls and what they could cost your company.

  • All U.S. employers must complete and retain Form I-9 for every employee. Even minor errors can result in hefty fines.

    The Cost of I-9 Mistakes:

    • $272 - $2,701 per form for first-time paperwork violations (per employee)

    • Up to $27,018 per violation for knowingly hiring unauthorized workers

    • Repeat offenders face criminal penalties

    Common Mistakes That Lead to Fines:

    • Incomplete or incorrect forms

    • Missing signatures or dates

    • Failure to re-verify work authorization

    How We Help: Our compliance audits and HR services ensure your I-9s are correctly completed, reducing your risk of fines.

  • A poorly handled harassment claim can turn into a lawsuit, leading to costly settlements, reputational damage, and loss of employee trust.

    The Cost of Mishandled Investigations:

    • The average harassment lawsuit settlement: $160,000

    • Legal fees can exceed $250,000+ if a case goes to trial

    • Failure to investigate properly can result in punitive damages

    Common Compliance Risks:

    • Failing to conduct a prompt and impartial investigation

    • Retaliating against employees who report harassment

    • Not documenting findings properly

    How We Help: We conduct thorough, compliant workplace investigations and train your leaders on handling complaints the right way.

  • The Department of Labor (DOL) is aggressive in enforcing wage and hour laws, and companies often face lawsuits for unpaid wages.

    The Cost of Wage & Hour Non-Compliance:

    • Unpaid wages + liquidated damages (double the owed wages)

    • Civil penalties of up to $2,374 per violation

    • Class-action lawsuits that cost companies millions

    Common Compliance Risks:

    • Misclassifying employees as exempt when they should be non-exempt

    • Failing to pay overtime correctly

    • Not tracking hours worked properly

    How We Help: We conduct wage audits to ensure your company follows FLSA guidelines, keeping you out of legal trouble.

  • The Equal Employment Opportunity Commission (EEOC) investigates discrimination claims based on race, gender, age, disability, and more.

    The Cost of EEO Violations:

    • The average EEOC settlement is $40,000+

    • Punitive damages can reach $300,000 per employee

    • Investigations can last months or years, damaging morale and reputation

    Common Compliance Risks:

    • Discriminatory hiring, promotion, or termination practices

    • Failing to provide reasonable accommodations

    • Retaliating against employees who file complaints

    How We Help: We provide training, policy development, and HR compliance support to prevent EEO claims before they happen.

  • FMLA and the Americans with Disabilities Act (ADA) require employers to provide protected leave and reasonable accommodations.

    The Cost of FMLA & ADA Violations:

    • Up to $204,000 in penalties for failing to provide FMLA leave

    • Additional costs from lawsuits, back pay, and legal fees

    Common Compliance Risks:

    • Denying leave or accommodations improperly

    • Retaliating against employees for requesting leave

    • Failing to maintain proper documentation

    How We Help: We ensure your leave policies comply with federal and state laws, reducing your risk of violations.

  • Workplace safety is critical, and OSHA fines can be devastating for businesses that fail to comply.

    The Cost of OSHA Violations:

    • $16,131 per violation (serious)

    • $161,323 per violation (willful or repeated)

    • Additional costs from lawsuits and workers’ compensation claims

    Common Compliance Risks:

    • Lack of required safety training

    • Failure to report workplace injuries

    • Unsafe working conditions

    How We Help: We guide you in creating compliant workplace safety policies and training programs.

How AZ HR Hub Protects Your Business

The cost of non-compliance isn’t just about fines—it’s about protecting your business from costly mistakes that can lead to lawsuits, turnover, and reputational damage.

With AZ HR Hub, you get expert HR guidance, compliance audits, and risk management support to keep your company compliant and thriving.

✅ HR compliance audits
✅ Employee handbook updates
✅ Workplace training & investigations
✅ Payroll & wage compliance reviews

Don’t risk non-compliance.