A conversation between Business and Government

Anyone who thinks businesses do not require sufficient regulation cuz they would self regulate is delusional IMHO. Most people on the right do not advocate for NO regulation, they only want LESS of it, and they want it to be needed, effective, and cost efficient. I do not think that is asking for too much.

 

Finally someone who wants to talk beyond the rhetoric. I applaud your effort here, but I suspect this line of reasoning will devolve quickly.

 

Good post, but its the govt thats at fault.




That is a picture from Sen. Mike Lee. This is what Lee said about the cabinet:

“Behold my display of the 2013 Federal Register,” Lee wrote along with the photograph. “It contains over 80,000 pages of new rules, regulations, and notices all written and passed by unelected bureaucrats. The small stack of papers on top of the display are the laws passed by elected members of Congress and signed into law by the president.”

So little legislation, so much regulation.

 

Do you realize how many regs we're talking about here? In 2012 the Federal Register was a little under 80,000 pages for a little over 3700 final rules. That's one year alone, who has the time around here to go through that?

 

Corporate Lawyers

 

And tax accountants. Got me on that one.

Kinda brings up the issue of the burden placed on small businesses that don't have the ability of paying for fancy pants lawyers and tax accountants. It's odd, the left wants higher taxes and higher wages and more regs on these guys which means higher costs. All of which translates into less profit for more work for small business employers. And then you wonder why the economy is barely keeping it's head above water.

 

1. I never claimed to be an economist; I am a financial and business attorney. 2. It doesn't take an economist to know a fallacious piece of tripe such as expressed in your OP, and that it doesn't come anywhere close to expressing an actual "conversation between business and government." 3. You compound fallacy upon fallacy in the above quoted post and other threads here.

If you don't like me calling that sort of thing out, too bad for you I guess.

Oh, yeah, as a corporate lawyer, since you mention that only lawyers have time to go through all the regs, I do have time to go through all the rules and regs because I get paid several hundred dollars an hour to do so. I speak out against the regulatory morass here, despite that it's against my personal financial interests to do so, because it is one of the most dire problems facing our country, and I hate to see how it harms my clients' business growth.

But do keep educating us all on the canned bean cocaine regulations with labels on the inside, don't let me slow you up there, you're doing such a bang-up job.

 

OK self-proclaimed business attorney, what are some of these regulatory issues that you've uncovered on the job? Give me an example.

Also, the cocaine-laced green beans story is over the top intentional transparent satire, the underlying point is that the # of pages of legislation is not a good barometer of how effective/ineffective government is.

 

As someone who owns a business, I can tell you that as far as I am concerned my cost of compliance with federal regulation, excluding things like FICA, OT, stuff is zero dollars; zero cents. I even got my "Know your rights" with the mandatory wage etc info poster for free.

 

We played this little unproductive game in the other thread. You didn't reply to anything I (or anyone else there) posted honestly, so why would I waste my time again? Asked and answered.

 

No idea what type of business you have, but either it's extremely small or you are a total anomaly.

 

Or I am honest. The cost of having a higher toilet is nominal, not the cost of a toilet. The cost of having wider doors is nominal, not the cost of the door. The cost of having the walkway come up flush to the door is nothing, not the cost of the sidewalk. The cost of using the new light bulbs is supposed to save more than it costs for the bulbs over their lifetime so reduces costs, not adds to them. The cost of fire suppression and alarm systems are not caused by federal mandate but because insurance companies won't insure without them. State and local laws cost me money--other than tax-related stuff, I cannot think of a single federal law that costs me money.

Perhaps you could be so generous to enlighten me as to what these oppressive regulations might be on any flavorless business, because anything not related to wage and benefits, really never gets specifically stated in any of the articles I read that just regurgitate polls, and number of pages added to the CFR as if they all apply to regulating business. Perhaps it is the CAN-SPAM Act that burdens me by preventing me from being able to flood your inbox with ads that you cannot opt out of. Is that it? Maybe it is all those safe handling and disposal of toxic substances laws that are punishing me even though I avoid purchasing and storing high concentration chemicals to begin with. Nope, never mind, I figured it out--it is having to paint twice as often because the stuff they use today just isn't as durable as those old lead based paints.

 

What other thread?

 

I stand by my prior post. Since you answered nothing in it, not even broadly and generally about the size and nature of your business, how many employees, etc., I'm not inclined to answer anything in your post. Yes, there are some kinds of business, pure retail stores, small service businesses and such, that have lower compliance costs. It sounds like you may be one of those if the ADA is all that applies to you. They pay the much higher regulatory costs of their suppliers, subcontractors and manufacturers indirectly though. My client's situation, where converting contractors to employees is going to cost 30-50k in repeating annual costs, maybe even requiring a fulltime HR person where none was required previously (and doubling the 30-50k), is much more prevalent.

 

You did not ask anything in your prior post to which an answer was needed. You made a declaration of your assumptions. Oh spare me the trickle down effect of businesses having to pay some great burden because our vehicles have an airbag in them and shatter-resistant windows. Unless you are the business that is complying with a regulation, then you are not the one burdened by the compliance costs. Beyond that, supply and demand still controls what others pay downstream.

Turning contractors into employees sounds like it means their "compliance costs" will be providing them health insurance to avoid the penalties i.e. the tax-related stuff I already spoke to, something for which they can likely outsource to a reputable payroll company to take care of most of for an added fee. .

 

You create more crime by making it illegal.

 

That's simply not the case. Regulations cost at every stage of distribution, are passed down the chain all the way to the consumer, fact not opinion.

No. Lawlz at "payroll company," sure, that's all there is to it! Not that it will do one bit of good in this thread, but here it is with my client's employee issue, a small facet of the regulated aspects of her business. I have dealt with similar many times, it is a very common issue for growing small businesses:

1. The IRS and DOL have entered into MOUs in many areas of the country to share information leading to harsh fines and penalties for misclassification of employees as independent contractors. This begain in 2011, and in bureau time is just now getting cranked up. It is one of their expressly stated top enforcement initiatives. Currently they are picking low hanging fruit (larger companies with lots of contractors), but all it takes is -one- disgruntled contractor or employee to whistleblow under relatively recently enacted whistleblower programs to bring attention to a smaller business. The employer will never know who the disgruntled employee was. More on this last part later. My client's contractors are all legit, not misclassified, but that doesn't mean she can just go reclassifying them without risk.

2. Any reclassification of employment status sends up a red flag which may or may not be picked and shared among agencies pursuant to the MOU. Upshot is you can't just "do the right thing" and turn contractors who have become more like employees over time into employees without a paper trail justifying why they weren't -always- employees. You would need to have someone like me draft individualized letter agreements, revoke certain contractor agreements and amend others (but all existing independent contractor agreements must have some attention from me). I would also need to draft a company policy that sets out who is being reclassified and why. To reduce the prospective effectiveness of whistleblowers, this would have to be acknowledged by -all employees-.

3. The following, at the bare minimum, must be drafted: employee manual, individual employee agreements, separate overtime policy and accompanying timesheets, privacy statement, COBRA forms, and more importantly, logistical policy statements describing hiring, periodic evaluation and termination policies. If there are more than 3-5 employees, it is near mandatory to have a dedicated HR person to insure that all the various policies are carried on in a uniform manner. It is extremely important to accurately account all employee time and classify exempt and nonexempt employees correctly. If we want to set up a 401k plan or some cafeteria plan while signing up for ACA with our new employees? Well the expense just doubled. At every turn government incents business to choose to avoid regulations by stiffing employees. They don't care about employees or the "middle class" or any other govt BS propaganda, only about themselves and their benefit. They are like many other cops today in this respect.

4. I'm likely forgetting stuff writing off the top of my head, these are the raw basics applying to all companies, there are -specific- other regs relating to this in other specific workplaces. Anyone who has employees and does not do the above is not only at the mercy of bureaucrats, but their own employees. If consistent standard policies are not in place and followed, all an employee has to do is file some kind of grievance, then it becomes almost impossible to terminate them due to the anonymity and protection of whistleblower programs and retaliation claims.

5. Other laws like the relatively recent "Lilly Ledbetter Act" that suspend the statute of limitations for equal wage claims by women make employees problematic and costly as well in other ways. Want to pay more to your productive, experienced, talented employees and less to underperformers? Think again. You -must- talk to me first. I then have to examine your records to make sure every "i" is dotted and "t" crossed. I have to draft performance standards justifying disparate pay for similar jobs that will withstand scrutiny. I have to do this annually, or you had better pay all your employees the same and risk losing the good ones and being left with the bad.

6. I'm not even talking about the crappy little things like lightbulbs, doorways or even hiring a payroll company you mention. Those are teeny tiny tater tots compared to what I'm talking. And remember, I'm only going into a -single- regulatory issue, contractors v employees and what is required to have both, change to employees, etc. I choose this because anyone should be able to see the connection between these costs and a chilling effect on hiring new people in the small business sector.

Now, you are welcome to conduct your business as haphazardly as you like, and may you never get that letter in the mail followed by a visit. If you do get that EEOC, IRS, DOL, OSHA letter (or any of the dozens of other agencies you may hear from depending on your business), you have employees and haven't done all the above at a bare minimum, you are going to get reamed and reamed hard to put it politely. There is very much a "guilty til proven innocent" zealous attitude in these folks. Appealing their edicts means... guess what? more time spent with me and I charge premium rates for any administrative court appearances which can drag on for WEEKS. They will start writing "tickets" then once they figure you are an easy mark who hasn't followed minimum procedure, they will cross-refer you to other agencies to get in on the pirhana feeding frenzy. They will threaten you with criminal penalties to get you to swallow down whatever fines and restitution they propose, and this could run into the hundreds of thousands or millions of dollars. Like a bookie or loan shark, their goal is to keep you working and providing jobs, just that they get all the proceeds.

As much as it costs to deal with someone like me and to institute all the costly compliance procedures, all that looks cheap compared to what could happen if you don't. But once again, feel free to drive around without a drivers license or car insurance, feel free not to carry insurance on your house, feel free to ignore the -true- nature of regulatory burden on business by not paying 50k now to avoid 5000000 down the road, and hey, hope you get lucky! I really do.

@ thread generally, particularly the lefties, I've given more detail than I should here, none of you will learn or listen I'm near sure of that. Maybe some nonlefty learned something from the above. There are hundreds of other regulatory cost issues, thousands maybe, as many as there are different businesses and owners. Don't tell me "that's not enough, list some more," or you confirm how dishonest and disingenuous you are.

 

Crime, yes because it becomes a crime to use or hold it. Addiction and/or Drug Use no, because making it illegal drives up the price which drives down consumption.

Perhaps legalizing it and tacking on a huge sin tax could attain both goals.

 

That's the same (*)(*)(*)(*) as the BS taxes we have on alcohol in Canada, where they actively try to disuade us from drinking by hiking up prices insanely using taxes. I don't see why the government has any business trying to persuade anyone.

 

This is true, and I think everyone is aware of it. People aren't saying we don't ultimately pay for these regulations as consumers, we're saying that we are willing to pay a premium for the benefits of the regulation. (i.e. I'm willing to pay an extra nickel for a can of green beans to know that they aren't contaminated with something else, and businesses did not self-regulate this kind of disclosure, we had to demand it)

If you are truly a lawyer you know good and well why a company might just suddenly want to reclassify an employee as an independent contractor. First and foremost would be to ensure some sort of limited liability of the employee when acting on behalf of the company. In this way if they do something fraudulent, or criminal (even if at the behest of the company) they can claim immunity, and the party they wronged will not be compensated. They can also use this to dodge the ACA or any number of regulations set up. It's all about shirking responsibility. Again, we're saying we don't mind paying a premium for a good to ensure that companies are held accountable (not that we don't think there is a premium). Also this attempted shirking proves the legislation is needed because OBVIOUSLY the companies would not do them of their own volition, else why would they be trying to reduce/dodge them.

Thank God this throws up a red flag, because if it didn't, companies would use this method EXCESSIVELY. This is a function that serves to promote companies to comply with regulations. You seem to be saying that the government makes it hard to dodge regulations, and that this is a bad thing. Why in the world would we pass regulations that we were going to make easily avoidable. Perhaps so businesses could show that they "cared" enough to support regulation publicly, while shirking it privately? Come on, this is a weak argument.

All those minimum forms you allude to at the beginning are of little cost. Once drafted they need only to be printed, which is costing the companies an extra 50 cents. I think you exaggerate the 3-5 employee threshold for a HR person, but I do agree eventually you will need one to ensure you are following the rules. AGAIN, this is necessary for the company to comply with the RULES. Yes, it is a cost that we ultimately pay. We think it an acceptable premium to pay to see that rules are followed, else why have them? The last point you bring up about 401ks and cafeteria plans, etc. is probably the strongest point in this paragraph, but it is a much greyer issue than you give it credit for. It basically it comes down to what the market will bear in the ultimate price for the good given the regulations that decides their "bonuses" as employees. Consumers do have a nasty tendency to have "price" trump "morals" because who has the time to look into the business practices of every company they purchase an item from. In essence I think most would support a premium to ensure others are treated fairly at their job place, but they need a tool to make this decision that doesn't involve them reading up an a business' private practices for an hour to buy a coffee-maker. This tool is regulation.

Again, GOOD. I'd like to protect people's rights, not leave their rights subject to what a private entity thinks the free market says they should be. I don't mind paying the premium.

I have to deal with this one first-hand. I agree it is annoying, but necessary. I think that I do a great job of rewarding based on performance rather than nepotism, but I can't run every company, and I don't believe everyone else does as well. The truth here is that there is no free lunch. Yes this model can lead you to paying people who are less productive more, but the opposing model would allow for you to pay productive people less, and less productive more as well, as there would be no regulation, you could make the decisions based upon whatever you wanted. Its grey though, and therefore one of your stronger points.

You've already alluded to the low-hanging fruit to be that which is being picked, and it is true. The government is not going after the small businesses, they are going after the big ones. They have more ability to pay to conform, and when they are hurt the smaller businesses have more of a chance to grow into big ones and face this same scrutiny. This promotes competition. Truly most small businesses would probably be allowed to be off the hook on much of this legislation if not for the large corporations wanting things to be "fair" and issued across the board. They don't want fairness, they want to crush competitors who can't afford to comply.

You keep alluding to how you point out these inadequacies and this is some selfless act because it hurts you to get rid of them and therefore be unneeded. This is "spin", lawyer "spin". You are PAID to see these inadequacies, and if you couldn't find any, you would either a.) not have such a job exist or b.) be replaced by a lawyer that could find more inadequacies. I don't trust you to stop when it is prudent. I think you would continue to find these "inadequacies" far beyond the point that was helpful to your fellow man. Nice "spin" though.

I'm not saying that's not enough, list more, I am saying you are trying to make something that is EXTREMELY grey EXTREMELY black and white. I don't trust anyone that sells me something as anything but grey (the opposing view also), ESPECIALLY if they are being PAID to tell me so.

 

And you assume that most people are so stupid and inept that they will eat green beans with cocaine in them? Or that putting cocaine in green beans would actually increase profits for a company in a competitive marketplace?

This highlights the underlying motivation of most "progressives" in their quest to control and manipulate other people. They are, at heart, misanthropic and paranoid, viewing everyone else through an extremist lens of mistrust and elitism. Only the smart, benevolent politicians can protect us from the cocaine green beans!

Tell me, have you ever been to a third-world country where they lack these kinds of regulations? Well, I have, and I don't recall seeing many cocaine-laced green beans or heroin-infused chickens being sold on the street or in grocery stores. Funny thing is that most consumers who buy green beans are HUNGRY and want to spend their money on FOOD. If they wanted cocaine-laced green beans, they would just buy them separately and mix them together. And Sanskrit? Really? You think advertising your product in a language that your customers don't read or speak is a distinct possibility? Do you have ANY idea how free markets work?

The length of the bills has nothing do with incompetence and everything to do with corruption, graft, and power.

 

And why would legalizing cocaine "dramatically increase the chance that he might want to rob you"? Where is your evidence that legalizing drugs will result in more addiction and abuse than would otherwise be the case?

 

Coca-Cola tried it before there were such laws. LOTS of companies put LOTS of crazy things into there products before we regulated it. The cocaine-laced green beans is mainly satirical though, if you want links to things that companies put into their food/products before we regulated it I'd be more than happy to, but I'm sure you are aware of said atrocities. Regulations don't spring up from nowhere, its supply and demand, we people (or businesses) demand regulations they are supplied.

2nd point, O.K., but that is more a symptom of business corruption being injected into it that an inherent one. Business MUST do things in the most cost-effective way within the boundaries of law regardless of moral or social implications, its inherent. Government CAN do things much the same way, but it is not inherent.

- - - Updated - - -

Simple supply and demand. The more regulations surrounding a drug (I.E. its legality) the higher its price and lower its consumption. Legalizing it would reduce its price and raise its consumption. People buy more of things that are cheaper.

 

You don't mind paying the premium? Well, good for you! You are wealthy enough to absorb the added costs of taxes, regulations, and inflation. You are also knowledgeable enough about the regulatory minutia to maintain compliance. You are an anomaly! Working class people and small business owners are typically living on the margins, and they don't have the means, time or the inclination to absorb these added costs and sift through the minutia of regulatory compliance. You talk about "protecting" people from cocaine in green beans and other ridiculous, non-problems while ignoring the protections inherent to competitive market places. Firms have a strong financial incentive not to misrepresent their product or harm their consumer because they risk losing market share to competitors. If you've ever watched Anthony Bourdain or Andrew Zimmer on the Travel Channel or Food Network, you have seen them eat in innumerable third world countries with virtually no government regulation or oversight of the food supply. How many times have they gotten sick or been fed something that was inedible? I can't remember a single example. This is consistent with my experiences in places like Mexico, Iraq, Thailand, and the Philippines. This is the power of the market in action. Certainly, it requires some measure of personal responsibility and common sense, but that is true no matter where you are eating. Even in the US, regulated sources of food can still be contaminated, and faith in regulations create a false sense of security and encourage complacency. Advances in our understanding of sanitation, and not overbearing government regulations, are why we are able to mitigate and prevent contamination of food and water in the western world. Simply COOKING your food is an incredibly effective way to ensure that it is free of pathogens, and the majority of infections are suffered by individuals with comprised immune systems, like children, the elderly, and pregnant women, so regulations, if any, should target them, and not the overwhelming majority of people with robust immune systems. The bottom line? A little common sense goes a long way, much further than overbearing regulations that are of dubious efficacy.