Federal laws bind all businesses, no matter their size. From corporation giants to start-up companies, they must follow the laws. And among the long list of these legal obligations is the strict observance of the government regulations for businesses.
However complex and tedious it may be, following these government regulations is necessary if you want to do business with the government—or do business at all.
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What are government regulations for businesses?
As defined in the Merriam-Webster dictionary, regulations are “executive rules or orders that are issued by an authority or a regulatory agency of a government.” It controls how people and entities behave and operate.
Simply put, the business regulations implemented by the federal government set the business climate. Every government regulation dictates the rules of the game to ensure a fair and accessible marketplace.
Why are government regulations for businesses important?
Government regulations are designed to protect the interests of both employers and employees, and also the nation. Since the first two entities are all living in the same country, it goes without saying that both employers and employees should do their part in upholding their civic duties.
However, there are federal regulations for businesses that are deemed counterproductive regarding their overall aim. The invisible costs, red tape, and the time-costly process of fulfilling the necessary paperwork impede businesses’ growth, especially small businesses that want to scale up.
With these factors laid out in the table, this begs the question: are government regulations really that important?
Funds the government’s public initiatives
Taxes are the primary source of funding for the federal budget. The previous years have not been easy for small businesses. Although there were businesses that were able to pivot and flourish despite the COVID-19 pandemic restrictions, some were not. Faced with thousands of businesses closing up shop for good, the federal government is busy providing relief and intensifying existing business assistance programs.
These assistance programs don’t come cheap, though. In fact, billions of dollars were doled out to small businesses in need last year. And these assistance dollars don’t exist in a vacuum. It comes from the taxes that everyone is required to pay. The income taxes paid by corporations ranked third in the top federal funding sources, with individual taxes landing on top of the rankings.
Protects workers against abuse
The workers are the backbone of the nation. Without them, there will be no catalysts of change to stimulate the economy. However, despite their crucial role in society, they are still prone to unfair commercial practices, workplace hazards, and unjust wages.
Given the state of American employees, there are employee and labor regulations in place to keep businesses in check.
Promote and protect the rights of the consumers
In their chase for bigger profits, some businesses resort to underhanded tactics to lure in the customers, such as untruthful advertising. From promising false benefits to spreading misinformation, lack of regulation in this sphere can cause catastrophic effects on all consumers.
The federal government is pushing for more effective advertising and privacy regulations across the board to prevent that from happening.
Prevents environmental exploitation
In the name of ludicrous profits, some businesses choose to commit environmental crimes. And given how the state of the environment keeps on worsening every year, the federal government is enforcing strict environmental policies and regulations.
What are the 5 areas of government regulations federal contractors should know?
Learning the federal law, especially if you are still in your early years in business can be quite confusing. In addition to the list of small business regulations that you can find in this website, here are the top federal business regulations that you should know!
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Labor and Employment Regulations
Both the labor and employment regulations fall within the same jurisdiction. So it is no surprise that spotting the differences between the two can prove challenging.
Labor regulations cover the rights and privileges of the whole labor force in general. On the other hand, the employment regulations are much more specific since it deals with the individual rights of the employees.
Labor regulations
The U.S. Department of Labor (DOL) enforces nearly 200 federal laws. To give you a gist, here are some of DOL’s principal statutes that govern that labor sphere:
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Wages and Hours
Under the Fair Labor Standards Act (FLSA), employers must pay their employees the standard minimum wage and overtime compensation.
The federal minimum wage is currently at $7.25 per hour, and this value can differ from state to state. If both the federal and state minimum wage laws apply to the employee, they will be compensated depending on which minimum wage rate is higher.
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Workplace Safety and Health
Employers must comply with the workplace safety and regulations mandated by the law. The Occupational Safety and Health (OSH) Act sets health and safety standards in workplaces to ensure the safety of the employees.
Additionally, workers are also entitled to compensation for personal injuries and illnesses that occurred during work situations.
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Employee Benefit Security
If your company offers retirement benefits, you have to ensure that you have a system in place to protect said benefits.
More often than not, retired workers solely rely on their retirement benefits to get by, so it is vital to guarantee the security of this benefit. And that is why The Employee Retirement Income Security Act (ERISA) regulates employers to ensure that the employees receive their promised retirement benefits.
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Unions and their Members
Unions are instrumental in promoting workers’ rights and freedom. These organizations help set the workplace’s standards in education, skill level, wages, and workers’ quality of life.
So in support of these employee organizations, the Labor-Management Reporting and Disclosure Act (LMRDA) requires the unions to submit financial reports and establish a set of standards for elected officials. This will help protect union funds and promote democracy in the organization.
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Employee Protection Against Workplace Retaliation
Exploiting resources, such as natural and human resources, to gain ludicrous profits is against the law. It is crucial to hold businesses accountable should they resort to using these kinds of malicious tactics, given their devastating effects on society and the environment.
And that is why whenever an employee comes forward to report any wrongdoings of their company, the employer cannot retaliate against the whistle blower in any way. Employers cannot fire, lay off, demote, deny overtime and compensation, nor reduce their pay and hours. The Occupational Safety and Health Administration of the DOL enforces more than 20 whistleblower laws that protect employees from such actions.
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Family and Medical Leave
The Family and Medical Leave Act (FMLA) mandates businesses with 50 or more employees to provide 12-workweek and 26-workweek leaves under these conditions:
12-workweek leaves within a 12-month period will be given to:
- Employees who have given birth to a child, one year from their birth
- Employees who have adopted or fostered a child, a year after its placement in the employee’s home
- Employees who have to care for their child, spouse, or parent who is seriously ill
- Employees who are suffering from a severe health condition that makes them incapable of performing their essential tasks for their job
- Active military members whose spouse, child, or parent are experiencing qualified exigency matters
26-workweek leaves within a 12-month period will be given to:
- Qualified family members of a service member suffering from severe illness and injury.
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Employees Under Government Contractors
These labor laws protect employees working for government contractors:
- Davis-Bacon Act
- Walsh-Healey Public Contracts Act (PCA)
- McNamara-O’Hara Service Contract Act (SCA)
Employment regulations
We may be living in modern times, but workplace and employment discrimination remain rampant. And that is why the U.S. Equal Employment Opportunity Commission (EEOC) is enforcing strict mandates to ensure a fairer playing field. Here is gist of the major federal employment laws that you should know.
According to Title VII of the Civil Rights Act, it is illegal to discriminate against a person based on their race, color, religion, national origin, or sex. Furthermore, this law also requires employers to reasonably accommodate their applicants’ and employees’ religious beliefs, unless it will pose an undue hardship to the company. Any employer retaliation against an employee who complained against discrimination is considered illegal by the law.
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Equal Pay Act of 1963 (EPA)
Regardless of their gender, workers are entitled to receive equal pay for equal work. As the law states, it is illegal to pay different wages to men and women performing the same job. Additionally, this law also protects workers from employer retaliation should they decide to air out their concerns against the discrimination.
This law prohibits businesses from discriminating against women’s pregnancy, childbirth, or any medical condition arising from pregnancy.
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The Age Discrimination in Employment Act of 1967 (ADEA)
ADEA protects people over the age of 40 from workplace discrimination due to their age.
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Americans with Disabilities Act of 1990 (ADA)
This law protects qualified individuals with disabilities from discrimination in the private sector, as well as the federal, state, and local governments. Additionally, this law also mandates that employers should reasonably accommodate the needs of their employees with disabilities.
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Tax Regulations
Taxes are the federal government’s primary source of revenue. Without it, there will be no resources left to fund initiatives for the public’s good. The Internal Revenue Service (IRS) administers and enforces tax laws to ensure that every individual and entity uphold their civic duty to pay their taxes.
As mentioned previously, businesses are legally responsible for paying their taxes. However, things can get a bit confusing since there are several business taxes that you should pay. There are different types of taxes depending on various factors, such as the structure of your business. But in general, here are the taxes you have to pay for your business:
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Income Tax
All businesses, except partnerships, are required to file their annual income tax return. If your business is structured as a partnership, you have to file an information return instead. Additionally, there are different forms to use depending on your business structure. Know which tax form suits your company here.
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Estimated Taxes
Individuals, sole proprietors, partners, and S corporations shareholders who expect to owe $1,000 in taxes after their return is filed should make payments throughout the year as your receive your income.
Corporations are expected to pay their estimated taxes if they are expected to owe $500 in taxes after filing their return.
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Self-Employment Tax
If you are an individual who works for yourself, you have to pay your SE Tax. Your SE Tax is considered as your social security and Medicare tax. Your payment for your SE Tax covers your contribution to the social security system.
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Employment Taxes
As a business leader managing employees, you are required to pay your people certain employment taxes such as Social Security and Medicare Taxes, Federal Income Tax Withholding, and Federal Unemployment Tax (FUTA).
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Excise Tax
This type of tax applies to businesses that manufacture and sell certain products, operate a particular type of business, receive payment for certain services, and use various kinds of equipment, products, or facilities.
Navigating your way can be quite confusing, especially if you are still starting out. Check out this taxes guide by the Small Business Administration to learn more.
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Advertising and Privacy Regulations
Truth-in-advertising
The Federal Trade Commission (FTC) is the primary governing body for truth-in-advertising laws. And in an era where misinformation is rampant, the FTC’s responsibility to hold businesses accountable for truthful advertising has never been this crucial.
Some businesses exaggerate and make false claims about their products and services to lure consumers. During the peak of COVID-19, several exploited the chaos and uncertainty of everybody to sell hokey-pokey health “solutions.” Since there are no guarantees regarding the safety and effectiveness of their advertised products and services, it puts the public’s health and safety in far greater danger.
Customer privacy
With the majority of American society migrating to the digital sphere, new kinds of threats arise. As a business, it is your responsibility to protect your customers’ sensitive information against cybercrimes.
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Environment Regulations
The issue of climate change has been around for more than a hundred years, yet it is still worsening. The devastating effects of this environmental crisis are felt across the globe, and it will continue to scale up in the coming years.
In an effort to curb the catastrophic effects of climate change, the federal government is mandating businesses to follow environmental protocols. Enforced and administered by the United States Environmental Protection Agency (EPA), the federal agency maintains a list of regulations per business sector.
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Antitrust Regulations
To encourage a fair marketplace for all industries, antitrust regulations are in place to secure this freedom. The Federal Trade Commission (FTC) enforces the federal antitrust laws to stop and prevent unfair business practices that are made in an attempt to control the market.
Antitrust laws prevent a company or groups of companies from conniving to attempt to drive up the market prices. To give you a beer understanding, here are the types of conduct that are prohibited by the law:
Horizontal Conduct
Horizontal Conduct refers to the connivance of businesses to limit competition. Banding together to fix prices, rig bids, and divide markets are all considered illegal.
Single Firm Conduct
Monopolizing or attempting to monopolize the market is unlawful under antitrust laws. However, there is a fine line between distinguishing which business practice is illegal or not.
If your business became such a hit that it monopolized the market, you are not considered unlawful. You can charge a premium for your products and services and market your products aggressively to drive your business further. However, what is deemed unlawful is doing unfair business practices to keep your position in the market.
