Chapter 5

Businesses, Workers, and the Law

Government Regulation of Business

Regulations are rules that government agencies issue to implement laws.

Businesses spend a lot of time and money making sure they comply with laws and regulations and do not face unwanted liability.

Six Important Areas of Law

1. Corporate law2. Tax aw3. Intellectual property law4. Consumer law5. Commercial law6. Licensing and zoning law

Corporate Law

How is the business organized?Sole proprietorshipsPartnerships

Uniform Partnership Act – governs general partners requires them to by owned by two or more parties and share in the profits.

Corporations

Tax Law

Taxes are monies paid by corporations and individuals used to fund government programs and services.

Income tax Taxes axed levied against a business’s profits.

Property tax Taxes levied against the property, buildings, or land

owned by a business.Withholding Federal Taxes

Businesses collect taxes from workers

Intellectual Property Laws

Businesses are protected by intellectual property laws

Patents Document issued by the federal government to

inventors and companies that gives them the exclusive rights to make, use, and sell their inventions for 17 years.

Intellectual Property Laws

Trademarks Word, name, symbol or slogan a business uses to

identify its own goods and set them apart from others.

Good for ten years.Copyrights

Protection provided for a creative work, such as literary works, musical compositions, plays, dances, paintings, movies, maps, and computer programs.

Good for the holder’s life plus 70 years.

Consumer Law

Consumers are individuals who buy goods and services for their own use.

Federal Trade Commission (FTC) Takes action against a company if it receives enough

consumer complaints to establish a “pattern of wrongdoing.”

Sales rules created by FTC Used Car Rule – requires dealers to tell customers

important information about a used car.

Commercial Law

Contracts Agreement between two parties to carry out a

transaction (ex: Sale of goods from seller to buyer) Anyone entering into a contract must know what is

in the contract and ensure it is properly prepare. Often difficult to break and can be taken to court if

broken. Uniform Commercial Code – specified

requirements for a contract.

Licensing and Zoning Law

Regulates who can operate a businesses and where owners can set up shop

Licensing Way to limit and control people who plan to enter certain

types of businesses (i.e. restaurants)Building codes

Regulate business through physical features or structures of building

Zoning Regulates where a building can be built through

ordinances (commercially zoned areas versus residential)

Employment Law

Regulate the relationship between companies and their workers and gives workers significant rights and benefits. Equal Employment Opportunity (EEO) laws Occupational safety and health laws Wage-hour laws Benefits laws Labor relations laws

Equal Employment Opportunity

Title VII of the Civil Rights Act of 1964 Companies cannot discriminate against an employee

because of race, color, religion, sex, or national origin. EEOC can sue a company that discriminates against an

employee.Age Discrimination in Employment Act

Protects workers 40-70 years of age.Americans with Disabilities Act

Cannot discriminate based on disabilities and illnesses (blindness or diabetes) and must provide reasonable accommodations

Occupational Safety and Health Laws

Sets standards for keeping workers clean and free of hazards, such as unsafe machinery and dangerous chemicals.

Businesses must keep records of employee illness, injuries, and deaths, and report them.

Occupational Safety and Health Administration (OSHA) inspectors visit workplaces every year to make sure they comply with regulations.

Wage-Hour Laws

Fair Labor Standards Act (FLSA) (Wage-Hour Law) protects workers: Sets the. number of hours employees can work in a

week without receiving overtime pay Prohibits companies from employing children under

14 Sets the minimum wage companies can pay their

workers

Benefits Laws

Social Security ActEmployee Retirement Income Security ActUnemployment Insurance LawsWorkers’ Compensation LawsFamily and Medical Leave Act (FMLA)

Labor Relations Laws

National Labor Relations Act Companies must at least listen to what their unions

say they want for their members in terms of wages, hours, and conditions of employment (such as safety in the workplace)

Unions Groups of workers who collectively bargain for rights

such as higher wages and better working conditions.

Organized Labor

Why Organized Labor?

Collective Bargaining Unions bargain for contracts on behalf of its

members Strength in numbers…they can’t fire us all!

Except Air Traffic Controllers (1980’s) and Baseball Umpires (1990’s)• Many were fired for going on strike!!

Protect Workers Rights Wages Working hours Working conditions Benefits

Why Organized Labor?

If Collective Bargaining doesn’t work Strike—Union members refuse to work until a fair

contract is agreed upon

Lockout—Management refuses to allow union members into work until certain conditions are met

History of Organized Labor

Labor unions of many kinds date back to the early 1800’s Very scattered, not influential, dissolved quickly

I880’s…a few major labor unions began to grow in numbers and power Fighting between them increased

1886…major unions joined together to create the AFL (American Federation of Labor) Considered to be the first real Labor Union in the U.S. Consisted of only “skilled” members from various

areas of the trades (steel workers, iron workers, etc)

History of Organized Labor

Wagner Act of 1935 A.K.A. - The National Labor Relations Act Protected rights of workers to form unions Established the National Labor Relations Board (NLRB)…

created to investigate unfair business practicesOther unions form

Several unions form during the 1930’s Auto Workers, Electrical Workers, Rubber Workers

The Congress of Industrial Organizations (CIO) Created in 1938 Large union consisting of smaller unions mentioned above Main rival of the AFL

Organized Labor Today

AFL and CIO Merged in 1955 Consists of 54 smaller unions Several million members

Teamsters Union Started as a small part of the AFL-CIO Was kicked out in 1957, rejoined in 1985, broke away again

in 2005 Strong ties to organized crime (Jimmy Hoffa)

Declining in numbers today Fewer manufacturing jobs

Some unions still very strong Teachers Auto Workers Carpenters Electrical Workers