Avoiding Compliance Pitfalls: A Summer Checklist for Employers
Don’t let summer silence your compliance strategy. 94% of employers say they’ve faced at least one unintentional compliance issue in the last 12 months.
For most companies, summer brings a welcome shift in pace. But while business may slow, compliance obligations don’t take time off. Mid-year is the perfect time to revisit responsibilities, assess risks, and prevent costly oversights. From ACA filings to evolving leave laws, this is your chance to catch red flags before Q4 hits.
1. Confirm ACA Reporting Is Complete and Accurate
→ Avoid IRS penalties by double-checking filings and addressing any unresolved notices.
If you're an Applicable Large Employer (ALE), you're required to file Forms 1094-C and 1095-C forms and distribute 1095-C forms to employees. Missed a deadline or received IRS Letter 226-J? Failing to act could result in significant financial penalties and ongoing audits.
Risk of inaction: Ignoring or delaying response to IRS notices can lead to automatic assessments and loss of appeal opportunities.
2. Review COBRA Administration
→ Gaps in COBRA processes can lead to lawsuits and retroactive coverage liabilities.
COBRA remains a high-risk area, especially with workforce fluctuations. Make sure:
Notices are sent on time
Terminated employees receive complete election materials
Premiums align with your current plans
If a third-party administrator handles this, request a mid-year audit of their processes.
Risk of inaction: Improper notice of delivery or premium errors can trigger Department of Labor complaints and legal action.
3. Conduct a Mid-Year Benefits Plan Audit
→ Fix eligibility and documentation issues now, before audits or renewal deadlines expose them.
Since January, how well has your benefits package been administered?
Audit eligibility tracking
Ensure plan documents are up to date
Validate FSA/HSA limits and substantiation
Risk of inaction: Inaccurate records may lead to over-enrollment, compliance gaps, and reporting failures during 5500 filings.
4. Revisit Employee Classification
→ Misclassification is one of the most common (and expensive) compliance mistakes.
Summer hires, interns, and remote workers all introduce a classification of risk.
Confirm FLSA exempt vs. non-exempt status
Review contractor vs. employee distinctions
Evaluate tax implications for out-of-state workers
Risk of inaction: DOL audits, wage claims, and backpay penalties are common consequences of misclassification.
5. Evaluate State-Level Leave Law Compliance
→ State leave laws change often; noncompliance can cost you BIG.
New hires in different states? Policy changes this year? Recheck:
PFML and state sick leave rules
Required employee notices
Posting and accrual requirements
Risk of inaction: Fines, employee grievances, and brand reputation damage.
6. Confirm ERISA and SPD Requirements Are Met
→ An outdated SPD is a compliance risk that’s easy to fix now, but costly if overlooked.
If your group health plan is subject to ERISA:
Make sure SPDs are current
Ensure employees can access them easily
Update wrap documents if vendors or plans changed
Risk of inaction: Failure to distribute SPDs can result in per-day penalties and liability during audits or claims.
7. Prepare for Open Enrollment Early
→ Avoid Q4 crunch, early planning gives you more leverage and fewer surprises.
Now’s the time to:
Align with brokers
Review plan design and pricing
Build your communication strategy
Risk of inaction: Delayed decisions can create coverage gaps, missed savings, and last-minute tech issues.
A Proactive Summer Sets the Tone for Q4
Compliance doesn’t pause for vacation, and neither should your oversight. Use this window to identify risks, clean up your processes, and empower your team for a smooth second half of the year.
Need help before Q3 begins? Book a free 15-minute compliance check with our team today.
Let’s make sure you’re set up for success, before it’s too late .