Rick Johnson, a bright and witty consultant to the distribution industry (www.ceostrategist.com), recently published what he called “A Regulatory Compliance Inventory.” It lists the various federal laws governing employment issues and is worth reviewing. You surely know about most of these laws, but I bet after reading this list, many of you will be scratching your heads saying, “I didn’t know about that one!”
Without further ado, here is your government’s attempt to help people in need of assistance, which includes just about everyone except small-business owners who provide the bulk of American jobs.
1. Title VII of the Civil Rights Act of 1964. This law prohibits discrimination by employers on the basis of race, color, religion, sex or national origin. Employers are not permitted to discriminate against any persons in these so-called “protected classes” when making employment decisions such as hiring, firing, promotion and compensation. Title VII applies to any business with 15 or more employees.
2. Section 1981, Civil Rights Act of 1866. This piece of legislation prohibits discrimination on the basis of race in contracts, which includes the implicit or explicit employment contract you make with any and all employees. Courts have broadly interpreted this law to include racial or ethnic discrimination.
3. Civil Rights Act of 1991. This act expanded the rights of plaintiffs in employment discrimination cases and extended the coverage of the major civil rights statutes to the staffs of the president and the U.S. Senate.
4. Equal Pay Act. This law prohibits discrimination in compensation based on gender. An employer must compensate men and women with equal rates of pay for equal work.
5. Age Discrimination in Employment Act (ADEA). This covers any business with 20 or more employees and prohibits discrimination against employees or potential employees 40 years of age or older. Any employer decision made solely on the basis of this age category violates the law.
6. Americans With Disabilities Act (ADA). This legislation prohibits discrimination against qualified employees who have mental or physical disabilities. Disability is broadly defined to include any impairment that substantially limits a major life activity (e.g., walking, breathing, hearing, seeing, working, etc.). Employers must provide reasonable accommodation to a disabled person who is qualified to perform the job. A business with 15 or more employees is covered by this act.
7. Vocational Rehabilitation Act of 1973. This law prohibits discrimination against the physically and mentally disabled and requires an employer to take affirmative action to employ these persons. This law applies to employers holding federal contracts of $10,000.
8. Family and Medical Leave Act of 1993. This is designed to allow employees to take time off from work to handle domestic responsibilities such as the birth or adoption of a child, the care of an elderly parent or their own serious illness. This law covers private employers with 50 or more employees at work sites within a 75-mile radius.
9. National Labor Relations Act (NLRA). This act permits employees to organize a labor union, collectively bargain and engage in economic strikes. Employees have the right to elect a union to represent them and bargain with an employer over compensation and other contract terms and, if the bargaining is unsuccessful, to conduct a strike. An employer cannot discriminate against an employee because of his or her membership in a union.
10. Uniformed Services Employment and Reemployment Act of 1994 (USERA). This law covers all employers, regardless of size, and prohibits employment discrimination against veterans and requires employers to grant time off to employees who perform their military duty.
11. Veteran’s Re-Employment Act of 1974. This legislation gives employees who served in the military at any time the right to be re-instated in employment without loss of seniority benefits and the right not to be discharged without cause for one year following reinstatement. The law applies to all public and private employers, regardless of size.
12. Vietnam Era Veteran’s Readjustment Assistance Acts of 1972 and 1974. These two pieces of legislation prohibit discrimination and require affirmative action to employ disabled Vietnam-era and other war veterans. The law applies to employers holding federal contracts of $25,000.
13. Immigration Reform and Control Act. This act makes it illegal for employers to hire undocumented workers. Each employee is required to complete an INS Form I-9 to ensure that the employee can legally work in the United States. It prohibits discrimination for national origin or for citizenship when the latter is an alien lawfully admitted for permanent residence.
14. State and local civil rights laws. Almost every state has laws that parallel the federal anti-discrimination laws. Some states and local governments may also have more inclusive categories, such as marital and sexual orientation discrimination.
15. Consolidated Omnibus Budget Reconciliation Act (COBRA). This law provides continuation of group health coverage that otherwise would be terminated.
16. Occupational Health and Safety Administration (OSHA). The agency’s mission is to assure the safety and health of America’s workers by setting and enforcing standards; providing training, outreach and education; establishing partnerships; and encouraging continual improvement in workplace safety and health.
17. The Health Insurance Portability and Accountability Act (HIPAA). This legislation helps people buy and keep health insurance, even when they have serious health conditions. The law sets basic requirements that health plans must meet. Since states can and have modified and expanded upon these provisions, consumers’ protections vary from state to state. HIPAA also increases privacy and security issues, giving consumer’s enhanced protection.
18. Fair Labor Standards Act (FLSA). This piece of legislation provides for minimum standards for both wages and overtime entitlement, and spells out administrative procedures by which covered work-time must be compensated. Included are provisions related to child labor, equal pay and portal-to-portal activities. In addition, the law exempts specified employees or groups of employees from the application of certain of its provisions (e.g., white collar jobs like executive, administrative, professional, outside sales and computer employees).
Just Try Slam Dunking!Depending on your political views, you may, like me, support many of these fairness provisions or at least the good intentions behind them. But we all know where the good intentions pavement leads.
This is not about liberal versus conservative, Democrat versus Republican, or even fairness versus discrimination. This list is testimony to the heavy burden of government regulations on small business, which ultimately diminishes its ability to invest and create new jobs for people of all political, racial, ethnic, gender, sexual and species orientations.
Running a small business is hard enough just struggling with marketplace issues. Keeping track of and abiding by all these regulations on top of it is like trying to play basketball with 20-lb. weights tied around your ankles.
Fortune 500 companies have to obey the same rules, but they have the wherewithal to hire small armies of HR staff whose main duties are to assure compliance with such regulations. Even then, almost all of them get tripped up from time to time and have to shell out big bucks to employment law attorneys to defend against employment lawsuits.
You folks whose total business assets are worth less than the office furnishings of Fortune 500 CEOs have an incomparably harder time complying. Frankly, the best thing you have going for you is being small enough to flit under the radar of the enforcement police. Some of the regulations don’t apply to tiny businesses so most of you are pretty well-insulated against trouble, unless some disgruntled employee or job seeker files a complaint. Better get in the habit of treating people nice.
Keep in mind that the list cited here consists only of employment-related regulations. If my heart was into it I could construct a list probably 10 times as long encompassing all the other statutes weighing on your business pertaining to antitrust, transportation, environmental issues, accounting, taxes and on and on.
Washington’s Alien World: During my 30-year career as a trade journalist, I’ve spent a fair amount of time in Washington examining the bowels of government in the performance of my duties. I’ve accompanied lobbyists on their rounds, covered congressional hearings, even given testimony. I’ve had lunches with key congressional staffers, and I’ve personally met about a half-dozen U.S. senators and congressmen. Plus, I’ve rubbed elbows with hundreds of Washington insiders at some of the stuffiest cocktail parties imaginable.
What stands out in my mind from all of those encounters with federal movers and shakers is that I can’t remember a single occasion in which any of them asked what opinion I or my readers might have about anything. Virtually, to a person, they inhabit an insular world of presumptive knowledge, authority and ideological calculation. They can’t be bothered with the everyday concerns of people whose livelihoods get hammered by their policies.
One episode in particular stands out as testimony to the wondrous ways of the bureaucratic mentality. I attended a mid-1980s dinner meeting of the Mechanical Contractors Association of Washington, D.C., which had as a guest speaker some mid-level staffer from the Equal Employment Opportunity Commission. His topic was how to comply with EEOC regulations.
The guy kept telling the audience how simple it was. All they needed to do was organize 16 different file folders (the number sticks in my mind after all these years) for various categories and keep filling them with things like classified ad clippings and other evidence of outreach to minorities in their hiring practices. The contractors in the audience kept giving stupefied looks to one another and laughter broke out at least once as I recall. The puzzled bureaucrat didn’t have a clue how his “simple 16-file folder” plan was being perceived by people whose business lives were otherwise consumed with trying to build things of value.