Cecily Zamora
Businesses and entrepreneurs can break the law in a number of ways, sometimes without even realising it. While it's rare that business owners intentionally break the law, it's important to educate yourself to avoid prosecution. For example, companies can fail to make federal payroll tax deposits, sell recalled products, or improperly bill for government services. In other cases, companies may break the law for social change or to delay a case.
| Characteristics | Values |
|---|---|
| Unknowingly | Failure to make federal payroll tax deposits |
| Mistakenly selling a recalled product | |
| Improperly billing for government services | |
| Not paying overtime wages | |
| Intentionally | Delaying a case to aggravate the plaintiff |
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What You'll Learn
Failure to make federal payroll tax deposits
Businesses and entrepreneurs may break the law without realising it, especially when they are just starting out. For example, a company may believe that a salaried employee is not entitled to overtime wages, when in reality, the employee is considered non-exempt under the law.
One way in which companies may break the law is by failing to make federal payroll tax deposits. This is often done by startup companies or companies with insufficient working capital, as it leaves them with more cash flow. However, this can result in a failure to deposit penalty (FTD). The Internal Revenue Code provides for the FTD penalty if a taxpayer does not deposit tax in the correct amount, within the prescribed time period, and/or in the required manner. The FTD penalty increases the longer the delay in making the payment. The penalty rates are: 2% for 1-5 days late; 5% for 6-15 days late; 10% for deposits made more than 15 days late. Failure to make the deposit electronically is 10% and the penalty is 15% if the amount remains unpaid more than 10 days after the first notice requesting payment. To avoid the FTD Penalty, companies need to know their federal deposit schedule, correctly calculate employment taxes, and make timely deposits using EFTPS.
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Selling recalled products
It is rare that companies set out to intentionally break the law, but it does happen. Businesses may inadvertently break the law without realising they have crossed the line into criminal conduct. For example, startup companies or those with insufficient working capital may not pay their federal payroll tax deposits, leaving them with more cash flow.
One way that companies can unknowingly break the law is by selling recalled products. To avoid this high-liability scenario, companies should check the Consumer Product Safety Commission's website, which frequently updates its recall list. The frequency of checking depends on the type of product being sold. For instance, companies selling items for babies are advised to check more often.
Other ways that companies can unknowingly break the law include improperly billing for government services like Medicare and not paying employees overtime wages when they are entitled to them.
In some cases, companies may break the law for social change or to correct social injustice. However, it is important to ensure that the means are justified by the ends and founded on good moral footing. Educating yourself early on can help insulate you from being prosecuted in the long run.
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Improperly billing for government services
Companies may break the law for a variety of reasons, and sometimes this is done unknowingly. For example, a company may not realise that they are committing criminal conduct, or they may not think that they have done anything egregious enough to be prosecuted.
One way in which companies may break the law is by improperly billing for government services. This could include services like Medicare. Companies may do this to increase their cash flow, or they may mistakenly believe that they are entitled to certain government funds.
To avoid this, companies should educate themselves on the laws surrounding government services and billing practices. They should also be aware of any changes or updates to these laws, as they may unknowingly break the law by not staying up-to-date.
While it is rare for business owners to intentionally break the law, it is important to note that breaking the law can have serious consequences, including prosecution. Companies should therefore take steps to ensure they are complying with all relevant laws and regulations.
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Lack of education on the law
It is rare that business owners set out to intentionally break the law. However, many businesses and entrepreneurs unknowingly break the law, especially when they are just starting out. This may be due to a lack of education on the law.
Businesses may not realise that they have crossed the line into criminal conduct. Executives may suspect they could be sued, but most never think they have committed something egregious enough that they would be prosecuted under the full extent of the law. For example, an employer may believe that a salaried employee is not entitled to overtime wages, when in reality, the employee is considered non-exempt under the law.
To avoid unknowingly breaking the law, business owners can educate themselves early on. This can help insulate them from being prosecuted in the long run. For example, companies selling items for babies should frequently check the Consumer Product Safety Commission's website, which updates its recall list.
Additionally, companies may break the law for social change. For instance, a company's lawyers may delay a case and aggravate the plaintiff, knowing that it will only cost the company a small amount of money. However, it is important to ensure that the means are justified by the end and founded on good moral footing.
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Breaking the law for social change
Businesses and entrepreneurs can sometimes break the law without realising it, for example, by failing to make federal payroll tax deposits or selling recalled products. However, it is rare that business owners intentionally break the law.
In some cases, breaking the law can be justified for social change. Social norms and laws are closely related and influence each other. Laws that are in strong conflict with existing norms can backfire and cause significant lawlessness. Gradual imposition of laws that are more in accord with prevailing norms can successfully change behaviour and future norms.
Therefore, breaking the law for social change can be effective when the means are justified by a good moral footing. However, it is important to note that breaking the law can have consequences, and educating oneself early on can help insulate from being prosecuted.
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Frequently asked questions
Companies may break the law without realising they've crossed the line into criminal conduct.
Examples include not paying federal payroll tax deposits, selling recalled products, and improperly billing for government services.
Yes, companies may break the law to delay cases and aggravate the plaintiff, which can be financially beneficial.
Yes, companies may break the law for social change or to correct social injustice.
