Given the industry in which your business exists and operates and the product/se

Question

Given the industry in which your business exists and operates and the product/service it provides:

Define two (2) government laws or regulations, which your company must comply with. These can be at the federal, state, or local level.

Describe a policy/procedure/action your company could implement to ensure its compliance with the laws or regulations.

Describe one (1) legal or ethical issue for each of the government law or regulation you defined that your business could be confronted with if it fails to comply? What are the possible consequences to your small business?

Explanation / Answer

All businesses, regardless of type, must comply with statutes (laws passed by legislative bodies) and regulations (rules enacted by regulatory agencies to carry out the purposes of statutes). These statutes and regulations can come from all levels of government; federal, state, and local. Some of these statutes and regulations apply regardless of the nature of the business and, of course, a venture engaged in business in more than one state or local jurisdiction must comply with applicable laws and regulations from all applicable jurisdictions.

Here laws and regulations include licensing and registration of business name, workers compensation, unemployment compensation, and permission to do business in a form other than a sole proprietorship. The collection of sales taxes and the withholding of employees’ wages are further examples of obligations with which to comply.

Federal laws are rules that are passed by the federal government and enforced by the United States governmental agencies. These laws include constitutional issues, federal statutes and federal regulations. Our United States Congress makes and passes federal laws. These federal laws are known as statutes. Statutes are laws that are enacted by a legislative body. Federal laws are somewhat limited, though they may be civil or criminal. The U.S. government can only regulate certain areas, as specified in Article I of the United States Constitution. Other issues are left to state or local regulation.

Federal civil laws regulate national and international issues and issues between the states. These laws govern things like immigration, the armed forces and our federal courts. Federal criminal laws include issues like counterfeiting, bank robbery, tax evasion and trafficking controlled substances across state lines. Federal courts have the exclusive right to manage federal laws. For example, let's say John files for bankruptcy. Even though John is a resident of Kansas, his bankruptcy case will be heard in a federal bankruptcy court because bankruptcy is a federal issue.

Insurance

Business Insurance: law to have liability, property damage or other types of business insurance, but very few businesses can realistically operate without some form of optional coverage. Chief among these is general liability insurance and property insurance. In some situations, life insurance may also be important. The New York State Department of Insurance supervises all insurance business in New York State.

Land Use Regulation

Regardless of the type of business or its location—in a home, manufacturing plant, strip mall, or high rise office building—the uses to which land may be lawfully put are matters that should be of great concern to an entrepreneur. Virtually every incorporated city, town, village, and county have adopted zoning regulations that permit only certain business activities in certain zones.

The Zoning Office, Land Use Office, or other so-titled agency has zoning maps and regulations that must be examined to determine if your business is permitted at your desired location. The attitude, “It’s my land and what I do with it is my business,” is not only wrong but also dangerous. Do not assume that simply because you have been operating a business in a certain location you may continue to do so, especially if the size of the business increases. Violation of land use regulations can shut down your business with little or no recourse. At the very least, it will cause an expensive and protracted interruption of that business. Make certain your plans for the future are compatible with zoning.

Taxation

The IRS wants to know where a business is and what it does. Most entrepreneurs must file form SS-4 with the IRS to register the business. If a sole proprietor has no employees, an SS-4 form may not be required. Upon filing the form, the owner will receive an employer’s kit containing information about the types of taxes owed, when to pay them, where to pay them, and how to compute the amounts due.

Owners also receive an Employer’s Identification Number (sole proprietors use their Social Security number) to identify the business. All communications with all governmental agencies must include this EIN. The EIN is also needed to open business bank and brokerage accounts and to deal with others who must report the business’s actions to any governmental agency. The government identifies the venture by its EIN, not by name.

Company should be aware that:

Any intellectual property that employees create in the performance of their job responsibilities or that is related to Company business or activities belongs to the Company and should always be adequately protected. Also, where permitted by applicable law, intellectual property created by contractors or agents under a contract with us are also the property of the Company as a work-for-hire. You are expected to promptly disclose any inventions, discoveries and improvements conceived or made during your employment with the Company or that are related to Company businesses or activities,

Manage your information.

Regardless of whether your processes are paper-based or electronic, you must be able to both access and control your information. Management will ultimately be accountable for any documentation that is lost or misfiled. If auditors should request specific information, often it will have to be produced within a twenty-four hour timeframe. Can your current system fulfill that requirement?

Information should be transparent; outside auditors should be able to trace and account for any financial interactions. The challenge is to implement far-reaching controls that can fulfill these requirements and at the same time be applied to new processes. If your organization is still using paper files, a transition to an EDMS will significantly ease your compliance efforts.

Examine privacy measures.

Privacy is inexorably linked to security. A breach in one usually results in the compromise of the other. It is important to implement measures that eliminate the potential for protected information to be jeopardized. Using a paper-based system, it is almost impossible to guarantee the privacy of your customers’ information, or even that of your employees. EDMS is more secure, but again, it must have stringent encryption and protection capabilities—especially if your company is doing business over the Web.

Collaborate and coordinate.

In order to ensure continued success, it is essential that different departments work together and communicate about whether business processes fulfill compliance requirements. Involve IT in your compliance measures, but do not delegate it solely to your IT department. These days business processes transcend individual departments; it is critical to have involvement from all areas that are affected by regulations. As you implement new processes to facilitate efficiency, consider whether your existing compliance efforts will cover those processes.

Employment and Labor Laws and Policies
Our most important resource is our employees. It is our policy to comply with all applicable laws and regulations, including those concerning hours, compensation, opportunity, human rights and working conditions. Johnson & Johnson strictly prohibits discrimination or harassment against any employee because of the individual’s race, color, religion, gender, sexual orientation, national origin, age, disability, veteran’s status or any status protected by law.

There are good business reasons for a strong commitment to ethical values:

1. Ethical companies have been shown to be more profitable.

2. Making ethical choices results in lower stress for corporate managers and other employees.

3. Our reputation, good or bad, endures.

4. Ethical behaviour enhances leadership. 5. The alternative to voluntary ethical behaviour is demanding and costly regulation.

Wage Issues

Employers who neglect to pay workers appropriate wages may risk violating compliance with their states. Along with ensuring that employees receive a fair wage for every hour they work, many businesses are required to pay a higher price for overtime hours. Failure to adhere to all wage-compliance laws can result in audits and fees among other consequences for the business in question.

Workplace Safety

As a business owner, you have a responsibility to ensure the safety of everyone you employ. Not only does failing to meet safety guidelines expose you to lawsuits by employees who were injured on the job, but it may also result in crippling fines from the Occupational Safety and Health Administration.

Licensing

For many businesses, staying compliant requires holding various business licenses and permits. For example, a restaurant that sells alcohol must possess a license from the Alcohol and Tobacco Tax and Trade Bureau in addition to a current health permit.

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