Posted by Jeff Id on April 10, 2015
Kenneth Fritsch noted in the comments section of the Entrepreneur’s Experience post the following poignant reality:
I would suspect that besides taxes, a more hidden expense for small businesses and businesses in general is the cost of regulations.
He would need a federal license to be more correct — probably. In fact, I think the FDA or the ATF or perhaps the EPA has some regulation to say as much. Hard to tell which division holds responsibility. I do know that the FDA (food and drug administration) seems to regulate the import of plastic ultra-sonic welders. At least I know that on two occasions (at the FDA request) I’ve filled out an FDA form with a statement written on it that the form is not required as there is no regulation. Of course the “form” has no space for such statements so I just write it in the ‘address’ block. On two other occasions, no form was required. Basically it is paperwork with no readers, that regulators don’t even know whether it is needed, but sometimes must be used.
So today I received a new shock. It just crossed my mind that perhaps I should explain that I’m a middle class progeny. No big money in my history, the spoon in my mouth was stainless steel rather than silver. Not that I’m complaining, money is horribly unimportant in case you haven’t learned that lesson, until you have none of it of course. So the shock was not the 20 pages of new employee manual compliance law we received yesterday, it was a notification from our customer that we must now comply with affirmative action law.
xxxxx Company is a federal contractor or subcontractor subject to the Vietnam Era Veterans Readjustment Assistance Act (VEVRAA), as amended, Section 503 of the Rehabilitation Action of 1973, as amended (Section 503), and Executive Order 11246. As a federal contractor, xxxxx Company is obligated to take affirmative action to employee women, minorities, individuals with disabilities, and veterans. xxxxx Company is also required to inform everyone with whom it conducts business that they may have the same obligations.
This notification does not imply that your organization has the same affirmative action obligations under VEVRAA, Section 503, and Executive Order 11246, as referenced above. Your obligation under those regulations is based on a number of factors, including size of workforce and dollar amount of subcontracts. However, we are required to notify you of your potential obligations as a subcontractor.
We appreciate your cooperation in our effort to fully comply with these Federal requirements.
Just another day, another pile of regulations….
I called our HR manager and found out that he wasn’t aware that we subcontract to the government through our customers. I didn’t know he didn’t know and didn’t know that he needed to know. Whatever… On brief reading, if we sell X amount of goods, to the government as a subcontractor, SUB being the operative word, we must comply with affirmative action law. I have no actual idea what that means at this moment. I do know that we have NO idea how many of our products end up on government vehicles vs private. Our customers don’t tell us which goes where and to whom…. Why would they?
I have not one clue when we ACTUALLY crossed the dollar thresholds to be a fully regulated govt subcontractor, but from what I’ve read online, we crossed the threshold some time ago… I really don’t know how we would ever figure out when that actually happened. Hell, I don’t even know if we haven’t crossed the line for some obscure reason. We will ask lawyers, and they will tell us.
Anyway … reading this from Wiki:
The Executive Order also required contractors with 51 or more employees and contracts of $50,000 or more to implement affirmative action plans to increase the participation of minorities and women in the workplace if a workforce analysis demonstrates their under-representation, meaning that there are fewer minorities and women than would be expected given the numbers of minorities and women qualified to hold the positions available. Federal regulations require affirmative action plans to include an equal opportunity policy statement, an analysis of the current work force, identification of under-represented areas, the establishment of reasonable, flexible goals and timetables for increasing employment opportunities, specific action-oriented programs to address problem areas, support for community action programs, and the establishment of an internal audit and reporting system.
As a conservative SOB with no care what you have for your “personal engagement equipment”, our company hires the best people we can find. Naturally, being conservatives, we are over 70 percent women, who apparently are deemed minorities? Dunno really… Do we have to increase the number of men, perhaps we need some artificial tanner, or perhaps some whitener? Hard to really tell. I have no idea if we pay the ‘right’ ratio, no idea if we comply with whatever new regulation, but I do know that our lawyers will be telling us soon — for $450/hr. — plus our time — plus our managers time—- etc..
Maybe there is some exemption for us that I don’t know. I don’t know because I posted it at the moment learned about it to share the experience with tAV readers. Even not knowing is a cost to us, because we have to PAY $$ to find out.
It’s just another day too, nothing special— ever heard of California prop 65? We got this notice just recently:
Back in February we sent a letter by fax requesting that you review the items they provide to us and identify if any of them contain the chemicals listed by the California Prop 65 legislation. We have not received a response to date. Please take a moment to review the letter and listing of parts. If your parts do not contain any of the chemicals then you just need to list the part number and state none on the reply form. We need to finalize our listing so we can reduce our legal risk and update the packaging accordingly.
We are still trying to figure it out because we have 2800 part numbers with thousands of subcomponents and with 800 chemicals, it takes a huge amount of time to figure out. Here’s the link:
Over 800 chemicals listed, which do you carry, which are exempt, how do you reply. Lead has a dash though it but lead compounds don’t. If you solder with lead, dashes are apparently exempt, but do you have the compounds in your product?? For Lead, you are also exempt if exposure is below a certain level, but exposure is in units of human absorption per day, yet the product lead percentage is in weight. How can we actually know what absorption per day people would experience if the light is on the side of a truck? It doesn’t matter really because as a company we are guilty first anyway. Especially in California. Now we have replied to these requests many times, but the recent one above is pretty large terms of part qty and takes huge time. If we blow disclosure, there are teams of lawyers ready to sue to make money based on imagined problems rather than actual ones. What do you do? You comply as best as you reasonably can …. but you really can’t.
Not that this cost individually would even scratch the surface of the taxes we pay. Also not that that matters to most readers. What we are experiencing at the very rare size private company we are, is immoral from a government and tax standpoint. The system is designed to resist success for manufacturing in particular. The tax and regulation load is so dramatic that I cannot find the words to explain. All you need to do to see the truth is to look around at which country USED to be #1 in manufacturing, and now has so little manufacturing. Of course, most of us simply look to what happened today, rather than what happened over time to the macro-economy.
Of course, liberals never listen, and I mean never, but it is good to vent anyway. Better out than in, but as America’s economy continues to collapse, the sane voters ought to take note.