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How to Respond to a Notice of Violation from a Governmental Agency

October 20, 2022

Businesses must comply with countless federal, state, and local laws and regulations, which is why it’s easy to accidentally miss something and end up in trouble. When the government catches the problem, the agency tasked with enforcing the rule will send a notification informing the company of the nature of the violation and potentially assessing a penalty. The typical reaction of business owners is to either ignore the notice or panic and pay the fine as quickly as possible. Neither of these are good options. Instead, the best way to respond to a notice of violation is to consult an attorney about what to do.

What Are Common Reasons Businesses Receive a Notice of Violation?

A significant number of violations are tax related. The business may have failed to file a timely tax return or pay what was owed. This often happens because companies must keep track of filings with multiple taxing authorities that collect income, sales, and employment taxes.

Labor and employment law notices are also common. The business may not have complied with wage and hour, worker’s compensation, discrimination, workplace safety, or other laws. If an employee or other party lodges a complaint with the governing agency, a notice will be issued to the company.

Businesses also frequently receive real estate-related violations, including those involving zoning and environmental laws, construction permits, and building codes.

What Steps Should Businesses Take When Receiving a Notice of Violation?

A notice should be reviewed as soon as possible. Ignoring it won’t make the agency go away and may result in additional liability because penalties and interest may already be accruing or may begin after a certain deadline. However, it shouldn’t just be paid without further consideration.

The next step should be to consult an attorney to assess the situation and determine how to respond. In some cases, there may be opportunities to reduce or eliminate liability. For example:

  • The notice may be defective. It may have erroneous information or was automatically generated prematurely.

  • The facts may be wrong, and the business can submit evidence to challenge the liability.
  • Remedies may be negotiable. Even if there has been a violation, a different sanction may be negotiated such as agreeing to make changes in company policies or procedures, providing employees with training, refunding money, or other options. Agencies are generally more interested in correcting behavior than collecting fines, which provides opportunities to find an appropriate resolution to the problem.

Once the violation is resolved, it is also important to ensure that it doesn’t happen again. Whatever caused the liability must be rectified. That may mean changing internal procedures, hiring experienced people to monitor compliance, or otherwise fixing the problem.

Should You Get a Legal Risk Assessment?

Receiving a notice of violation may indicate that proper controls have not been put in place for the business. A good way to proactively identify other potential areas of concern is to consult an attorney about a legal risk assessment. In a legal risk assessment, the attorney conducts a thorough review of the business’s operations and governing documents to identify possible problems and recommend ways to mitigate those risks. This process may also uncover opportunities for the business to save money or increase revenue.

If you have received a notice of violation or would be interested in a legal risk assessment, contact our firm. We help businesses address discrete legal problems as well as provide comprehensive assessments and business planning services. Our firm also offers Fractional General Counsel services for businesses that don’t need full-time general counsel but recognize the benefits of having experienced legal advice available on an as-needed basis.

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