Consequences That Organizations Face for Breaking the Law

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There are many ways that organizations and business owners break the law, sometimes through the mistreatment of individuals and sometimes through the violation of laws regarding issues like copyright and trademark, among other things. There are consequences to breaking the law, so all businesses should be aware of any legislation regarding their operations so that they can adhere to those laws.

Among the most common violations are those relating to safety, which occur when a business fails to adequately protect its employees. Businesses also often fail to properly compensate employees with adequate wages, which can lead to violations.

Besides these common ways of breaking the law, organizations sometimes produce works or products that violate the rights of other individuals. When a company makes an artistic work, inappropriately uses another brand’s name or produces a product that violates another person’s patent, it can lead to serious financial violations.

Regardless of the type of violation an organization commits, there can be serious financial consequences for not following the law.

Applying Workers' Compensation Coverage

Workers' compensation includes all of the medical or wage benefits that are owed to an employee after getting injured or becoming sick while on the job. Each state mandates its own workers' compensation, which also includes death benefits, or aid to the family of an employee who dies on the job.

There are some situations where extremely small organizations are exempted from having to pay out compensation to a worker or their family.

In some cases, a company may try to ignore its obligations to pay out workers' compensation. This can lead to complaints to the Department of Labor, which may result in an investigation by the state. Consistent with the fact that workers' compensation varies between states, the penalties placed upon a business for not issuing worker’s compensation also vary by state.

Usually, these penalties occur in the form of fines, the amount of which vary depending on whether the violation was intentional or unintentional.

OSHA Safety Violations

Of course, the threat of having to pay worker’s compensation is minimized when companies adhere to the standards set by the Occupational Safety and Health Administration, or OSHA. Safety standards are set by OSHA to protect the safety of the employees.

All organizations are expected to adhere to a general set of rules regarding safety standards, and there are specific regulations placed on particularly high-risk industries like construction and shipping.

When a violation of OSHA standards occurs, there may be several penalties depending on the type of violation. Less serious violations may lead to penalties of up to $7,000, while a major violation comes with a minimum $7,000 fine per violation documented, which can quickly lead to major costs for an organization.

Willful violations of safety standards can lead to up to $250,000 in criminal fines for individuals responsible for the violation and even imprisonment. A corporation can be fined up to $500,000 for willful violations.

In addition, there may also be fines of up to $70,000 for repeat violations. When an organization fails to correct documented violations, it carries a penalty of up to $7,000. The cost of repeated violations can therefore be high, particularly for smaller businesses that cannot afford to absorb the cost of multiple violations.

Minimum Wage and Overtime Pay

Businesses sometimes do not pay the mandated federal minimum wage. The employees most likely to be impacted by this crime include wait staff, service workers and cleaning staff. Employees that rely on tips for their wages typically expect that their wages will reach the minimum wage.

If a person doesn’t get tipped enough to make that amount hourly, their employer is supposed to pay out enough that the employee ends up with the federally mandated minimum.

Another case where employers sometimes do not pay out appropriately is in the area of overtime pay. Overtime is based on a 40-hour work week, with overtime paid to any employee who works more than 40 hours within seven days.

Although there are employees who are exempt from overtime pay, most employees fall into the nonexempt category and are owed appropriate overtime for their work. Employers sometimes don’t pay overtime because of the way the organization’s pay scheduling is structured, which leads to confusion about when an employee should receive overtime.

If an employee feels they haven’t been paid appropriately, violations can be reported to the Department of Labor’s Wage and Hour Division. After an investigation of the circumstances, the Wage and Hour Division can pass down several punishments, usually in the form of back pay and back wages.

Repeat offenders of wage laws may also receive an additional $1,100 per violation. Employees typically have a two-year statute of limitations within which to report the violation.

Copyrights, Trademarks and Patents

Copyright refers to a an originally authored work in the arts, such as literature or music, and is meant to protect the individual from others profiting on their work without authorization. When a copyright is infringed, various monetary penalties are imposed, with a fine of up to $150,000 for each violation.

The court will issue an injunction to stop production of the infringing work and impound the illegal work, while in some cases the infringer, if the severity of their crime is extensive enough, may be sentenced to jail.

In 2013, a Baltimore man was sentenced to seven years in prison for infringing the copyrights of more than 1,000 software programs.

Trademark and patent infringement are related concepts that aren’t quite the same as copyright. Trademark refers to a legal claim on the image or name of a type of good using a brand, such as Coca-Cola’s trademark on its line of soda or Nike’s trademark on its line of shoes.

Patents, on the other hand, are legal claims to an invention issued for a limited time by the United States Patent and Trademark Office. As with copyright, there are violations for both trademark and patent infringement.

The most common response to both trademark and patent violations is an injunction to cease the violation of either the trademark or the patent. In both cases, monetary damages are also often issued if the court finds that violations have occurred. Jail time is rare in these cases, and the goal of stopping copyright, trademark or patent infringement is to recoup losses that occurred due to the violation and repay the original producer of the work.

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