The regulatory landscape is complex and always changing, often leaving companies in a perpetual game of catch-up. Despite so many moving pieces, the vast majority of midsized business owners express confidence in being compliant with payroll tax laws and other workforce regulations, according to the latest ADP Midsized Business Owners Study.

However, the study also revealed a substantial compliance gap. While midsized employers are confident they’ll be compliant, more than one-third experienced unintended expenses due to non-compliance. Further, nearly half of business owners do not know how many fines they incurred in the past 12 months or how much they cost their organizations. The number of fines experienced also continued to increase over the past four years, doubling to 13 on average.

“When it comes to compliance, it’s clear that business owners’ perception doesn’t reflect reality,” said Tom Perrotti, president of ADP’s Major Account Services. “If employers are overconfident in their ability to remain compliant and don’t know the impact these fines have on their bottom line, they’re losing money due to non-compliance and don’t even realize it. Companies need to recognize that compliance is not a one-time investment, but an ongoing journey. Trying to solve compliance challenges with only internal resources can sometimes end up costing more than paying a third-party expert to help.”

As for compliance with the Affordable Care Act (ACA), three-quarters of respondents expressed some degree of confidence they’ll be compliant with ACA regulations, but only slightly more than one-third are completely confident their organizations will be compliant.

To read more about the study’s findings click here.