Criminalization of Earning a Living
by Mike Krause

Whether a sole proprietor or a large corporation with a human resources staff, it is highly likely that Colorado businesses routinely break the law. Not because of any bad intent, but rather because the massive body of law business people are expected to both understand and obey makes full compliance a pipe dream. Call it the criminalization of earning a living.

Colorado has some 30,000 laws filling over a dozen volumes of both criminal and regulatory statutes.

In addition, there are over 4,000 federal crimes filling some 27,000 pages of the U.S. Code. This includes violations of the regulations expressed in the tens of thousands of pages of the Code of Federal Regulations.

So even while trying to comply with Colorado law, a business owner may still unknowingly be violating federal law.

Preston Oade, a Denver attorney explains how this works: "[state] worker compensation laws have incentives for an employer to put injured workers on light duty jobs, but under the ADA (the federal Americans with Disabilities Act) this can be used as evidence that the employer perceives the employee as 'disabled,' or that the employer has changed the job requirements so the employee now can claim they are entitled to light duty as a full time job."

So it should seem reasonable for state lawmakers to help business owners out with fewer and clearer laws. Unfortunately, this is not the case.

A 2003 study by Stateside Associates found that over half of American states have recently enacted "significant" developments in corporate criminalization. (The report is available here)

For instance, in 2003, California replaced the mens rea standard (bad intent) with strict civil liability for "people who cause or permit a hazardous substance to be discharged into water of the state regardless of whether it caused a condition of pollution or nuisance." In other words, in California you are guilty of polluting even if you do not actually pollute anything, and even if you had no intent to pollute.

As of 2001, Ohio holds violators of its pesticide laws strictly liable, but also "that the employer is liable for and may be convicted of the violation, if the person was acting on behalf of the employer." Bad news for Ohio landscape contractors should a supervisor inadvertently violate a regulation while the owner is at another jobsite.

In the 2005 legislative session in Colorado, HB-1115 would have created civil fines for record keeping violations concerning personnel files, fines up to ten thousand dollars, and other fines for non-compliance up to $250 dollars per day. The law defined an employer as having even one employee. The bill was a huge threat to any small business owner who sees his top priority as working the business rather than working his personnel files. Fortunately, Governor Owens vetoed the bill.

SB-21, also vetoed, would have further complicated the 305 pages of employment security law in Colorado--an already incomprehensible regulatory pitfall--with both civil and criminal penalties for reporting and recordkeeping violations.

The National Conference of State Legislators claims that 195,000 bills are introduced biennially at the state level. Of these around 45,000 become law, or more than one new law per day, per state, every day of the year.

In 2005, Colorado lawmakers introduced 602 bills, of which 402 were passed. That is two thirds, or 67 percent of bills passed. The Governor's veto pen knocked the percentage of bills introduced to bills actually becoming law, down to 59 percent.

In other words, the trend in Colorado is toward more and more new laws, which means more new requirements for business people to comply with, or inadvertently violate.

Lawmakers should keep in mind that "business" includes not just the Enrons and the WorldComs (whose spectacular violations of existing laws have helped lead to the creation of even more corporate criminal laws) but also the sole proprietors, the independent contractors and just about every self-employed person trying to earn an honest living.

Originally published by The Independence Institute (www.independenceinstitute.org)

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