The penal legacy of Ken Lay, paid family leave, and the case for sharing financials with employees.
The company owner's guide to laws, news, trends, and regulations.
The Law You Broke Today
Blame it on ken lay. If you misplace the wrong document, a law passed in the wake of the Enron scandal makes it more likely that the feds will threaten you with up to 20 years in prison. Here's what happened: This past summer, Congress quickly drafted the Sarbanes-Oxley Act, which President Bush signed in July. The law imposes criminal penalties on company owners and employees who impede federal investigations. The language of the law is pretty broad. Among other things, it seems you can be liable for employees' actions -- those taken not only during an investigation but also before a probe is even launched. In theory, you could get busted for shredding a document that you didn't know -- and couldn't have known -- was wanted.
Another concern: all federal investigations -- including, say, those conducted by the Occupational Safety & Health Administration -- are part of the mix. "Imagine that OSHA comes by and wants to do a wall-to-wall inspection of your plant," says Hal Coxson, a Washington, D.C., employment lawyer who defends companies. "If you, the owner, say, 'No, you should be limited to this area,' have you impeded an investigation? Can they threaten you with a fine or jail time?" Test cases will determine how far the law stretches. Until then Coxson, who calls the act "a sleeper," thinks that company owners have reason to be nervous. --Mike Hofman
Why Your Workers May Take More Time Off
When it comes to politics, a long-held belief is that as California goes, so goes the nation. Which is precisely why the creation of a paid family-leave benefit for employees in the Golden State has drawn scrutiny (and mostly disapproval) from business groups nationwide. Governor Gray Davis signed the unprecedented Kuehl Bill into law in September, over the objections of the California Chamber of Commerce, which dubbed it a "job killer."
Under the new measure, workers can take up to six weeks of leave at 55% of their salary. The entitlement will be funded entirely by employee payroll deductions, averaging about $26 per year per worker. Most of the support for the bill came from a coalition of labor unions and liberal activists who contended that the federal Family and Medical Leave Act, enacted in 1993, is useless for most people who can't afford to live without a paycheck for several weeks. Adversaries countered that likely side effects include a disruptive mix of manic temp hiring, skyrocketing retraining costs, and lower productivity. "This couldn't come at a worse time, given the economic uncertainty," says Martyn B. Hopper, director of the California chapter of the National Federation of Independent Business. "The last thing the small-business owner needs now is to have his hands tied or to be burdened with extra costs."
Not every business owner fears the bill. Elliot Hoffman, a bakery entrepreneur who instituted paid family leave 22 years ago, says any costs he incurs are offset by low employee turnover. But despite Hoffman's modest endorsement, the vast majority of his peers are still nervous about paid leave -- and, for that matter, California's increasingly pro-labor politics. A recent survey of corporate executives ranked the state as having by far the worst business climate in the na-tion. As for paid family leave, bills are pending in at least 28 states. --Tahl Raz
Open the Books, Now More Than Ever
Sharing financials with employees may seem risky in a downturn, but a recent Watson Wyatt survey suggests it should be every company's priority. That's because only 49% of workers surveyed said they understood the steps their companies were taking to reach new business goals or, perhaps more important, how those goals related to their job performance. By giving employees hard numbers, you can reinforce how their actions will affect the company. --T.R.