BUSINESSES, WORKERS, BUSINESSES, WORKERS, AND THE LAWAND THE LAW

CHAPTER 5.1CHAPTER 5.1

LAWS THAT REGULATE LAWS THAT REGULATE BUSINESSESBUSINESSES

Government Regulation of BusinessGovernment Regulation of Business RegulationsRegulations are rules that government are rules that government

agencies issue to implement laws.agencies issue to implement laws. 6 areas of law that affect businesses:6 areas of law that affect businesses:

Corporate LawCorporate Law Tax LawTax Law Intellectual Property LawIntellectual Property Law Consumer LawConsumer Law Commercial LawCommercial Law Licensing and Zoning LawLicensing and Zoning Law

CORPORATE LAWCORPORATE LAW

Corporate LawCorporate Law

Corporate law regulates how Corporate law regulates how businesses can set themselves up to businesses can set themselves up to operate as companies.operate as companies.

There are laws regulating 3 kinds of There are laws regulating 3 kinds of business ownership:business ownership: Sole proprietorshipSole proprietorship PartnershipPartnership CorporationsCorporations

Sole ProprietorshipSole Proprietorship

Sole ProprietorshipSole Proprietorship is a business is a business owned by a single individual, or owned by a single individual, or proprietor. proprietor. Easy to startEasy to start Check with state and local officials about Check with state and local officials about

licenses, zoning regulations, etc.licenses, zoning regulations, etc. Advantages?Advantages? Disadvantages?Disadvantages?

PartnershipsPartnerships

PartnershipsPartnerships are associations of two are associations of two or more persons who jointly own a for-or more persons who jointly own a for-profit businessprofit business Governed by the Uniform Partnership ActGoverned by the Uniform Partnership Act

Must be two or more personsMust be two or more persons Partners must share the profits from their Partners must share the profits from their

businessbusiness Advantages?Advantages? Disadvantages?Disadvantages?

CorporationsCorporations

CorporationsCorporations are businesses are businesses formed under state or federal formed under state or federal statutes that are authorized to act as statutes that are authorized to act as a legal persona legal person Advantages?Advantages? Disadvantages?Disadvantages?

Tax LawTax Law

Tax LawTax Law

Tax law regulates how much money Tax law regulates how much money businesses must pay the government businesses must pay the government to help provide services for the publicto help provide services for the public

The type of ownership managers The type of ownership managers choose for their businesses often choose for their businesses often depends on the types of taxes depends on the types of taxes involvedinvolved

Taxes are monies paid by corporations Taxes are monies paid by corporations and individuals and used to fund and individuals and used to fund government programs and services, government programs and services, such as highways and schoolssuch as highways and schools

Income TaxIncome Tax

Income TaxIncome Tax is a tax levied against a is a tax levied against a business’s profitsbusiness’s profits A percentage of what a business has A percentage of what a business has

earnedearned

Property TaxProperty Tax

Property TaxesProperty Taxes are taxes levied are taxes levied against the property, buildings, or against the property, buildings, or land owned by a businessland owned by a business Based on an assessed valuation (worth)Based on an assessed valuation (worth)

Withholding Federal TaxesWithholding Federal Taxes

Businesses also collect taxes from Businesses also collect taxes from workersworkers

Businesses withhold income taxes Businesses withhold income taxes from employees’ earnings and send from employees’ earnings and send them to the federal governmentthem to the federal government

Intellectual Property Intellectual Property LawsLaws

Intellectual Property LawsIntellectual Property Laws

Intellectual property laws protect the Intellectual property laws protect the inventions and new ideas of inventions and new ideas of businessesbusinesses

3 kinds of intellectual property 3 kinds of intellectual property protections:protections: PatentsPatents TrademarksTrademarks CopyrightsCopyrights

PatentsPatents

PatentsPatents are documents the federal are documents the federal government issues to inventors and government issues to inventors and companies that gives them the companies that gives them the exclusive right to exclusive right to makemake, , useuse, and , and sellsell their inventions for their inventions for 1717 years years

TrademarksTrademarks

TrademarkTrademark a word, name, symbol, or a word, name, symbol, or slogan a business uses to identify its slogan a business uses to identify its own goods and set them apart from own goods and set them apart from othersothers

Companies apply to the federal Companies apply to the federal government’s patents and trademark government’s patents and trademark office to establish a new trademarkoffice to establish a new trademark

Registered trademarks are good for Registered trademarks are good for 10 10 years and can be renewed every years and can be renewed every additional 10 yearsadditional 10 years

CopyrightsCopyrights CopyrightCopyright is the protection provided is the protection provided

to a creative workto a creative work Literary works, musical compositions, Literary works, musical compositions,

plays, dances, paintings, movies, maps, plays, dances, paintings, movies, maps, computer programscomputer programs

The owner is the only one allowed to The owner is the only one allowed to reproduce, sell, or allow others to use reproduce, sell, or allow others to use itit

US Copyright Office grants copyrights US Copyright Office grants copyrights which last for the holder’s which last for the holder’s life plus life plus 7070 years. After that, it becomes part years. After that, it becomes part of the “public domain.”of the “public domain.”

Consumer LawConsumer Law

Consumer LawConsumer Law

Consumer law protects individuals Consumer law protects individuals against business activities that might against business activities that might be harmful to thembe harmful to them

It is important for consumers to It is important for consumers to understand consumer laws so they understand consumer laws so they know their rights when dealing with know their rights when dealing with businessesbusinesses

Federal Trade CommissionFederal Trade Commission

FTC is an agency of the federal FTC is an agency of the federal government that will take action government that will take action against a company if it receives against a company if it receives enough consumer complaints to enough consumer complaints to establish a “pattern of wrongdoing.”establish a “pattern of wrongdoing.” Used Car RuleUsed Car Rule Telemarketing Sales RuleTelemarketing Sales Rule

Food & Drug AdministrationFood & Drug Administration

FDA protects consumers against FDA protects consumers against problems with mislabeled and impure problems with mislabeled and impure foods, drugs, cosmetics, and medical foods, drugs, cosmetics, and medical devices.devices.

FDA approves all new drugs before FDA approves all new drugs before they are sold.they are sold.

Commercial LawCommercial Law

Commercial LawCommercial Law

Commercial law regulates how Commercial law regulates how businesses enter into contracts with businesses enter into contracts with other businesses and with consumersother businesses and with consumers

Uniform Commercial Code is the Uniform Commercial Code is the basic commercial law documentbasic commercial law document

ContractsContracts

ContractsContracts are agreements between are agreements between two parties to carry out a two parties to carry out a transaction, such as the sale of transaction, such as the sale of goods from a seller to buyergoods from a seller to buyer

Create obligations between the Create obligations between the parties that can be enforced in a parties that can be enforced in a court of lawcourt of law

Must follow very specific rules to Must follow very specific rules to stand up in courtstand up in court

Business Sales ContractsBusiness Sales Contracts

Business sales contracts are often Business sales contracts are often short, simple documents that meet short, simple documents that meet the requirements of the Uniform the requirements of the Uniform Commercial CodeCommercial Code

Licensing and Zoning Licensing and Zoning LawLaw

Licensing and Zoning LawLicensing and Zoning Law

State and local governments use State and local governments use licensing as a way to limit and control licensing as a way to limit and control people who plan to enter certain types people who plan to enter certain types of businessesof businesses

Government may deny your application, Government may deny your application, take away a license, issue warnings, take away a license, issue warnings, suspend, or completely revoke a licensesuspend, or completely revoke a license

Local governments regulate businesses Local governments regulate businesses through building codes and through through building codes and through zoning ordinances and regulationszoning ordinances and regulations

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Case Analysis

Chapter 5.2Chapter 5.2

Workers and The LawWorkers and The Law

The Importance of Employment LawsThe Importance of Employment Laws

Employment lawsEmployment laws regulate the regulate the relationship between companies and relationship between companies and their workers and give workers their workers and give workers significant rights and benefits, significant rights and benefits, including the right to work in a safe including the right to work in a safe environmentenvironment

There are strict penalties for There are strict penalties for companies who violate these lawscompanies who violate these laws

5 Employment Laws5 Employment Laws

Equal Employment Opportunity (EEO) Equal Employment Opportunity (EEO) lawslaws

Occupational safety and health lawsOccupational safety and health laws Wage-hour lawsWage-hour laws Benefit lawsBenefit laws Labor relations lawsLabor relations laws

Equal Employment Equal Employment Opportunity LawsOpportunity Laws

Title VII of the Civil Rights Act of 1964Title VII of the Civil Rights Act of 1964

Companies cannot discriminate against Companies cannot discriminate against an employee because of race, color, an employee because of race, color, religion, sex, or national originreligion, sex, or national origin

EEOC (Equal Employment Opportunity EEOC (Equal Employment Opportunity Commission) can sue a company that Commission) can sue a company that discriminates against an employeediscriminates against an employee

The employee can also take the The employee can also take the company to courtcompany to court

Age Discrimination in Employment ActAge Discrimination in Employment Act

Companies cannot discriminate Companies cannot discriminate against employees because of their against employees because of their age in hiring, promotions, or age in hiring, promotions, or retirementretirement

Workers between the ages of Workers between the ages of 4040 and and 7070 can sue employers for can sue employers for discriminationdiscrimination

Americans with Disabilities ActAmericans with Disabilities Act

Companies cannot discriminate Companies cannot discriminate against persons with disabilitiesagainst persons with disabilities

Companies cannot fire or refuse to Companies cannot fire or refuse to hire people because of certain hire people because of certain disabilities and illnesses, such as disabilities and illnesses, such as blindness or diabetesblindness or diabetes

Companies must also accommodate Companies must also accommodate a worker’s disabilitiesa worker’s disabilities

Occupational Safety and Occupational Safety and Health LawsHealth Laws

Occupational Safety and Health Occupational Safety and Health LawsLaws

Occupational Safety and Health Act sets Occupational Safety and Health Act sets standards for keeping workplaces clean standards for keeping workplaces clean and free of hazards, such as unsafe and free of hazards, such as unsafe machinery and dangerous chemicalsmachinery and dangerous chemicals

Businesses must keep records of Businesses must keep records of employee illnesses, injuries, and deaths employee illnesses, injuries, and deaths and submit them to the US Dept of Laborand submit them to the US Dept of Labor

OSHA inspectors visit workplaces to make OSHA inspectors visit workplaces to make sure they comply with regulationssure they comply with regulations

Wage-Hour LawsWage-Hour Laws

Wage-Hour LawsWage-Hour Laws

Wage-Hour laws establish minimum wage, Wage-Hour laws establish minimum wage, overtime, and child labor standards for overtime, and child labor standards for employeesemployees

Fair Labor Standards Act (FLSA) protects Fair Labor Standards Act (FLSA) protects workers in three ways:workers in three ways: Sets minimum wage companies can paySets minimum wage companies can pay Sets number of hours employees can work in a Sets number of hours employees can work in a

week without receiving overtime payweek without receiving overtime pay Prohibits companies from employing children Prohibits companies from employing children

under the age of 14under the age of 14

Benefits LawsBenefits Laws

Benefit laws guarantee that workers Benefit laws guarantee that workers will receive certain benefits regardless will receive certain benefits regardless of what happens to them on the jobof what happens to them on the job

Companies must comply with five Companies must comply with five different benefits laws:different benefits laws: Social Security ActSocial Security Act Employee Retirement Income Security ActEmployee Retirement Income Security Act Unemployment Insurance LawsUnemployment Insurance Laws Workers’ Compensation LawsWorkers’ Compensation Laws Family Medical Leave Act (FMLA)Family Medical Leave Act (FMLA)

Social Security ActSocial Security Act

Provide workers and their families with Provide workers and their families with income after retirement.income after retirement.

Supports disabled workers and the federal Supports disabled workers and the federal Medicare program, which provides health Medicare program, which provides health insurance for senior citizensinsurance for senior citizens

Employers and employees share the cost Employers and employees share the cost of SS taxes while the worker is employedof SS taxes while the worker is employed

When workers retire, they receive a When workers retire, they receive a pension based on their lifetime earningspension based on their lifetime earnings

Employee Retirement Income Security ActEmployee Retirement Income Security Act

ERISA protects the money put into an ERISA protects the money put into an employee’s retirement fund by employee’s retirement fund by companies and workerscompanies and workers

Not every company establishes this Not every company establishes this programprogram

Unemployment Insurance LawsUnemployment Insurance Laws

Provides workers with financial Provides workers with financial assistance during period of assistance during period of unemploymentunemployment

To be eligible for unemployment To be eligible for unemployment insurance, workers must meet two insurance, workers must meet two requirements:requirements: Must have lost their jobs through no fault Must have lost their jobs through no fault

of their ownof their own Must have worked a certain length of timeMust have worked a certain length of time

Employers must pay a certain amount Employers must pay a certain amount into unemployment for each workerinto unemployment for each worker

Workers’ Compensation LawsWorkers’ Compensation Laws

All states have laws that insure All states have laws that insure workers against injury, illness, or workers against injury, illness, or death because of job conditionsdeath because of job conditions

Employers are liable for an Employers are liable for an employee’s on-the-job injury no employee’s on-the-job injury no matter how the illness or injury matter how the illness or injury occursoccurs

Covers accidents even if they are the Covers accidents even if they are the fault of the worker!fault of the worker!

Family Medical Leave ActFamily Medical Leave Act

FMLA requires companies to give FMLA requires companies to give employees up to 12 weeks of leave employees up to 12 weeks of leave to care for a child, spouse, or parentto care for a child, spouse, or parent

Law only affects companies of 50 or Law only affects companies of 50 or more employeesmore employees

Companies don’t have to pay their Companies don’t have to pay their employees while they are on leave, employees while they are on leave, but must give them their jobs back but must give them their jobs back with no penaltieswith no penalties

Labor Relations LawsLabor Relations Laws

Labor Relations LawsLabor Relations Laws

Protect the right of employees to organize Protect the right of employees to organize into unions to bargain collectively for better into unions to bargain collectively for better wages and working conditionswages and working conditions

UnionsUnions are groups of workers who are groups of workers who collectively bargain for rights such as higher collectively bargain for rights such as higher wages and better working conditionswages and better working conditions

Companies must at least Companies must at least listenlisten to what to what unions say they want for their membersunions say they want for their members OrganizingOrganizing Collective BargainingCollective Bargaining StrikingStriking

Strikes are a union’s ultimate weaponStrikes are a union’s ultimate weapon

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Chapter 5 Fact and Idea Review