Business Regulation: California Manufacturers Use Multiple Strategies to
Comply with Laws (Letter Report, 09/30/98, GAO/HEHS-98-208).

Pursuant to a congressional request, GAO compiled a list of the federal
and state laws that apply to California businesses of different sizes,
and selected two industries within that state to illustrate compliance
with selected laws, focusing on the: (1) requirements of federal and
state laws affecting the workplace, tax-related, and environmental
practices of California manufacturing firms of different sizes; (2)
assistance available to firms to help identify applicable laws and
understand their implications on operations; and (3) impact workplace
and tax laws have had on the human resource operations at firms in the
high-tech electronics and aerospace industries.

GAO noted that: (1) both federal and state laws impose a number of
requirements affecting the workplace, tax-related, and environmental
practices of California manufacturing firms; (2) as employers, firms
must comply with federal and state laws; (3) firms also must report
income resulting from their operations and pay taxes to the federal and
California state governments; (4) in addition, as firms manufacture
goods and dispose of their waste, they must comply with state and
federal environmental laws regulating use, storage, and disposal of
hazardous substances and releases into the air; (5) although a number of
laws take effect as firms hire more employees, particularly those laws
that are workplace-related, most laws have at least some requirements
for all firms, regardless of the number of employees; (6) the
interrelationships between federal and state laws in the different areas
of regulation vary; (7) in many cases, California law sets more
comprehensive standards with which businesses must comply than federal
law does; (8) many sources of information are available to help firms
identify and meet the legal requirements imposed on them; (9) although
no one public agency--either federal or state--coordinates or produces a
complete resource guide identifying all legal requirements that apply to
California manufacturers, many California and federal agencies have
individually sponsored activities to assist firms in complying with
legal requirements; (10) however, company managers GAO spoke with seemed
unwilling to rely on information provided by state or federal agency
staff or to invest the time required to access, research, and understand
the available information; (11) instead, these managers rely on trade or
business organizations and outside experts to help them understand and
remain abreast of new developments in federal and state laws and
regulations; (12) managers overseeing human resource operations at the
seven California manufacturing firms GAO visited have implemented a
variety of approaches to meet their regulatory obligations; (13) while
each of the firms had developed strategies to comply with the laws, each
was concerned that certain requirements involved excessive complexity,
paperwork, or cost, although there was little pattern in the firms'
areas of complaint; (14) in general, managers expressed frustration with
never being sure they were in complete compliance with all applicable
requirements; and (15) notwithstanding these concerns, managers also
cited areas in which they believed regulations helped to improve the
workplace.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-98-208
     TITLE:  Business Regulation: California Manufacturers Use Multiple 
             Strategies to Comply with Laws
      DATE:  09/30/98
   SUBJECT:  Federal regulations
             Occupational safety
             Working conditions
             Reporting requirements
             Labor administrative law
             Statutory law
             Corporations
             State law
IDENTIFIER:  California
             
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on Oversight and Investigations,
Committee on Education and the Workforce, House of Representatives

September 1998

BUSINESS REGULATION - CALIFORNIA
MANUFACTURERS USE MULTIPLE
STRATEGIES TO COMPLY WITH LAWS

GAO/HEHS-98-208

Business Regulation

(205355)


Abbreviations
=============================================================== ABBREV

  ADA - Americans With Disabilities Act
  ADEA - Age Discrimination in Employment Act
  Cal/EPA - California Environmental Protection Agency
  Cal/OSHA - California Occupational Safety and Health Administration
  CERCLA - Comprehensive Environmental Response, Compensation, and
     Liability Act
  CFRA - California Family Rights Act
  COBRA - Consolidated Omnibus Budget Reconciliation Act of 1985
  EEO - equal employment opportunity
  EEOC - Equal Employment Opportunity Commission
  EPA - Environmental Protection Agency
  ERISA - Employee Retirement Income Security Act
  FEHA - Fair Employment and Housing Act
  FICA - Federal Insurance Contributions Act
  FLSA - Fair Labor Standards Act
  FMLA - Family Medical Leave Act
  FUTA - Federal Unemployment Tax Act
  FWPCA - Federal Water Pollution Control Act
  HIPAA - Health Insurance Portability and Accountability Act
  IRS - Internal Revenue Service
  MHPA - Mental Health Parity Act
  NLRA - National Labor Relations Act
  NMHPA - Newborns' and Mothers' Health Protection Act
  OMB - Office of Management and Budget
  OSHA - Occupational Safety and Health Administration
  RCRA - Resource Conservation and Recovery Act
  SBA - Small Business Administration
  SBREFA - Small Business Regulatory Enforcement Fairness Act
  SDWA - Safe Drinking Water Act
  SIC - standard industrial classification
  TSCA - Toxic Substances Control Act
  USERRA - Uniformed Services' Employment and Reemployment Rights Act
  VEVRAA - Vietnam-Era Veterans' Readjustment Assistance Act
  WARN - Workers' Adjustment and Retraining Notification Act

Letter
=============================================================== LETTER


B-278100

September 30, 1998

The Honorable Pete Hoekstra
Chairman, Subcommittee on Oversight
 and Investigations
Committee on Education and the Workforce
House of Representatives

Dear Mr.  Chairman: 

During the 20th century, the Congress has passed many laws to meet
the expanding and increasingly complicated conditions of commerce. 
These laws cover a wide variety of activities ranging from ensuring
workers' rights to bargain collectively, to paying income taxes, to
maintaining clean air.  Many of these federal laws are implemented
through regulations; in addition, many states have enacted laws
either supplementing federal statutes or regulating business
activities in areas not preempted by federal law.  While this legal
framework has been developed to achieve certain societal goals, some
critics have suggested that this set of federal and state laws and
associated regulations makes compliance difficult and complex for
employers. 

Because of your concerns about the nature and scope of these laws,
you asked us to compile a list of the federal and state laws that
apply to California businesses of different sizes.  We agreed to
select two industries within that state to illustrate compliance with
selected laws.  Specifically, we agreed to provide information on (1)
the requirements of federal and state laws affecting the workplace,
tax-related, and environmental practices of California manufacturing
firms of different sizes; (2) the assistance available to firms to
help identify applicable laws and understand their implications on
operations; and (3) the impact workplace and tax laws have had on the
human resource operations at firms in two industries:  high-tech
electronics and aerospace. 

To address these objectives, we discussed with federal and California
state agency officials the legal requirements with which
manufacturing businesses must comply and reviewed the federal and
state laws to identify the legal provisions that are significant to a
California manufacturing firm's operations.  We also spoke to federal
and state agency officials about their efforts to inform businesses
of their legal responsibilities and reviewed agency publications and
electronic information sources, such as Web sites.  In addition, we
visited seven aerospace and electronics firms to determine the
implications these laws have on the firms' human resource operations. 
This step provided us insight on strategies that firms of various
sizes use to comply with the laws.  Appendix I provides more detail
on our scope and methodology.  We conducted our review from November
1997 to July 1998 in accordance with generally accepted government
auditing standards. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Both federal and state laws impose a number of requirements affecting
the workplace, tax-related, and environmental practices of California
manufacturing firms, including requirements governing firms' hiring,
firing, and payment practices, as well as pension management and
employee working conditions.  As employers, firms must comply with
federal and state laws requiring, for example, a safe and healthful
workplace; the payment of minimum wages; fair treatment in hiring,
promotions, and terminations; and the withholding of employees'
taxes.  Firms also must report income resulting from their operations
and pay taxes to the federal and California state governments.  In
addition, as firms manufacture goods and dispose of their waste, they
must comply with state and federal environmental laws regulating use,
storage, and disposal of hazardous substances and releases into the
air.  Although a number of laws take effect as firms hire more
employees, particularly those laws that are workplace-related, most
laws have at least some requirements for all firms, regardless of the
number of employees.  These laws, generally supplemented by
accompanying regulations, are imposed by federal and state
governments.  The interrelationships between federal and state laws
in the different areas of regulation vary.  In many cases, California
law sets more comprehensive standards with which businesses must
comply than federal law does. 

Many sources of information are available to help firms identify and
meet the legal requirements imposed on them.  Although no one public
agency--either federal or state--coordinates or produces a complete
resource guide identifying all legal requirements that apply to
California manufacturers, many California and federal agencies have
individually sponsored activities to assist firms in complying with
legal requirements.  These activities include providing access to
agency Web sites, distributing guides, presenting seminars and
training, helping firms meet permit requirements, and consolidating
the information on permits needed to start a firm.  However, company
managers we spoke with seemed unwilling to rely on information
provided by state or federal agency staff or to invest the time
required to access, research, and understand the available
information.  Instead, these managers rely on trade or business
organizations and outside experts to help them understand and remain
abreast of new developments in federal and state laws and
regulations. 

Managers overseeing human resource operations at the seven California
manufacturing firms we visited have implemented a variety of
approaches to meet their regulatory obligations.  For example, firms
of all sizes used outside resources--such as health and safety
consultants, payroll services, and lawyers--to help them comply with
both the more complex issues, such as pension plan requirements under
the Employee Retirement Income Security Act (ERISA), and the
routinized duties, such as employee payroll deductions.  While each
of the firms had developed strategies to comply with the laws, each
was concerned that certain requirements involved excessive
complexity, paperwork, or cost, although there was little pattern in
the firms' areas of complaint.  In general, managers expressed
frustration with never being sure they were in complete compliance
with all applicable requirements.  They reported fearing the "unknown
requirement" that could lead to a fine or increase their liability
for potential litigation.  Notwithstanding these concerns, managers
also cited areas in which they believed regulations helped to improve
the workplace, such as health and safety and workers' compensation
requirements. 


   BACKGROUND
------------------------------------------------------------ Letter :2

Many federal and state agencies oversee the regulation of California
manufacturing firms.  Laws relating to the workplace and employment
are overseen at the federal level by the Department of Labor
(governing unemployment insurance, employee benefits such as
pensions, compensation issues such as minimum wage and overtime
requirements, and workplace safety); the Equal Employment Opportunity
Commission (EEOC); and the National Labor Relations Board.  At the
state level, California agencies that oversee laws related to
employment include the California Department of Industrial Relations
(addressing workers' compensation; occupational safety and health;
and labor standards covering wages, hours of work, and other
employment conditions) and the Department of Fair Employment and
Housing (protecting individuals' rights to seek, obtain, and hold
employment without discrimination).  With respect to tax law, beyond
the Internal Revenue Service (IRS) at the federal level, a number of
state agencies are involved.  The Franchise Tax Board collects
personal, corporate, bank, and franchise taxes; the State Board of
Equalization collects sales and use taxes, as well as other specific
taxes; and the Employment Development Department collects
unemployment insurance, disability insurance, employment training,
and personal income withholding taxes.  Environmental laws are
overseen at the federal level, by the Environmental Protection Agency
(EPA) and at the state level by the California Environmental
Protection Agency (Cal/EPA). 

In an earlier report analyzing the framework of federal workplace
regulation, we noted that the magnitude, complexity, and dynamics of
this framework pose a challenge for employers of all sizes.\1 In that
report, we identified 26 key statutes and one executive order on
workplace regulation that affect all types of businesses, including
manufacturers.  The employers and union representatives with whom we
met for that study generally supported the aims of these federal laws
and regulations but also called for changing agencies' approaches to
developing and enforcing regulations and urged agencies to develop a
more service-oriented approach to workplace regulation in general. 
In a more recent study that attempted to identify the impact of
federal regulation on several businesses, we suggested that measuring
the incremental impact of all federal regulations on individual
companies, although perhaps not impossible, would be an extremely
difficult endeavor.\2 Further, while many of the companies
participating in that study recognized that regulations provide
benefits to society and their own businesses, they all had varied
concerns about regulatory costs and the regulatory process.  These
concerns included perceptions of high compliance costs; unreasonable,
unclear, and inflexible demands; excessive paperwork; and the
tendency of regulators to focus on deficiencies. 

Recent changes in federal law and current initiatives by federal
agencies are targeted to reducing the compliance burden on businesses
as well as making the regulatory requirements clearer and more
accessible.  In 1980, the Congress passed two laws to reform the
federal regulatory processes:  (1) the Paperwork Reduction Act, which
attempted to minimize the paperwork and reporting burdens federal
agencies impose on nonfederal entities, and (2) the Regulatory
Flexibility Act, which required agencies to assess the impact of
their regulations on small entities, including small businesses. 
More recently, the Small Business Regulatory Enforcement Fairness Act
of 1996 (SBREFA) made several changes to regulatory procedures,
including (1) amending the Regulatory Flexibility Act to allow for
judicial review of agency decisions, (2) requiring the publication of
"small entity compliance guides" to explain the actions a small
business or other small entity must take to comply with a rule or a
group of rules, and (3) establishing a congressional review process
through which the Congress can disapprove final agency regulations. 
To comply with SBREFA, agencies must also answer questions from small
entities concerning information on and advice about complying with
statutes and regulations, including interpreting the law and applying
it to specific circumstances supplied by the small entity. 

In addition to changes required by law, under the administration's
National Partnership for Reinventing Government (formerly the
National Performance Review), a series of initiatives was undertaken. 
Agencies were to identify obsolete regulations that could be
eliminated, create partnerships between regulators and those being
regulated, and identify specific regulations that could be revised. 
Agencies proposed plans for changing the way they enforced
regulations to increase the use of partnership arrangements and
reduce the emphasis on identifying procedural violations unrelated to
performance.  Agencies also revised their customer service
standards.\3


--------------------
\1 Workplace Regulation:  Information on Selected Employer and Union
Experiences (GAO/HEHS-94-138, June 30, 1994). 

\2 Regulatory Burden:  Measurement Challenges and Concerns Raised by
Selected Companies (GAO/GGD-97-2, Nov.  18, 1996). 

\3 We have conducted numerous studies on regulatory reform over the
years, the most recent being Regulatory Reform:  Agencies' Efforts to
Eliminate and Revise Rules Yield Mixed Results (GAO/GGD-98-3, Oct. 
2, 1997). 


   MANY FEDERAL AND STATE LAWS
   COVER CALIFORNIA MANUFACTURING
   FIRMS
------------------------------------------------------------ Letter :3

To conduct business in California, a manufacturing firm must comply
with numerous federal and state laws and regulations dealing with
labor, tax, and environmental concerns.  The requirements of these
laws and regulations cover diverse issues, such as overtime pay,
unemployment insurance, and air pollution.  With some exceptions
(particularly with laws concerning labor issues), these requirements
apply in equal force to manufacturing firms of all sizes, from the
smallest to the largest.  Smaller firms, though, may be exempted from
certain requirements, such as those prohibiting racial or sexual
discrimination and those requiring family leave.  Most regulation
involves both federal and state requirements, with California law
frequently providing stricter requirements than those mandated under
federal law. 

Table 1 broadly summarizes significant labor, tax, and environmental
requirements that apply to California manufacturing firms and sets
forth specific federal and state legal requirements that affect firms
with different numbers of employees.  For descriptive purposes, these
requirements are classified into nine categories of different
business issues, ranging from wage and hour matters to environmental
concerns.  Each of these categories represents complex regulatory
schemes, originating from federal and state statutes, regulations,
and judicial decisions.  For a more detailed summary of these
regulatory requirements, see appendix II (labor law), appendix III
(tax law), and appendix IV (environmental law). 



                                                                       Table 1
                                                       
                                                         Legal Requirements for Manufacturing
                                                          Firms in California, by Number of
                                                                  Employees at Firm

Type of                                         5                                                                                        100
requirement   1 employee          2 employees   employees   10 employees    15 employees   20 employees    50 employees    60 employees  employees
------------  ------------------  ------------  ----------  --------------  -------------  --------------  --------------  ------------  ------------
Wage and      All employers       \\b           \b          \b              \b             \b              \b              \b            \b
hour laws     engaged in
(federal and  interstate
state)\a      commerce or in the
              production of
              goods for
              interstate
              commerce must
              comply with
              minimum wage,
              overtime, and
              child labor laws.

Civil rights  Federal: All        \b            \Californi  \b              Federal: No    Federal: No     Federal:        \b            Federal:
(federal and  employers must pay                a: No                       discriminatio  discrimination  Contractors                   Employers
state)\c      men and women                     discrimina                  n is allowed   is allowed      with a federal                must collect
              equal pay for                     tion is                     because of     because of      contract or                   workforce
              equal work.                       allowed                     race, color,   age.            subcontract of                statistics
              California: No                    because of                  religion,                      $50,000 or                    on
              sexual harassment                 race,                       sex, national                  more must                     employees'
              is allowed in the                 religion,                   origin, or                     establish an                  sex, race,
              workplace;                        sex,                        mental or                      affirmative                   and national
              employers with a                  national                    physical                       action                        origin.
              covered federal                   origin,                     disability.                    program.
              contract or                       physical
              subcontract of                    disability
              $10,000 or more                   , age, or
              cannot                            sexual
              discriminate                      orientatio
              because of race,                  n.
              color, religion,
              sex, national
              origin, or
              disability; and no
              employer may
              discriminate
              because of
              military service
              or veteran status.

Labor         All employers must  \b            \b          \b              \b             \b              \b              \b            \b
relations     allow employees to
(federal      organize.
only)\\d

Safety and    All employers must  \b            \b          Federal:        \b             California:     \b              Federal:      \b
health        comply with state                             Employers with                 Employers with                  Employers in
(federal and  health and safety                             10 or fewer                    20 or fewer                     selected
state)\e      standards that are                            employees are                  employees and                   high-hazard
              at least as                                   exempt from                    a good safety                   industries
              effective as                                  certain                        program have                    with more
              federal standards.                            record-                        reduced                         than 60
                                                            keeping and,                   record-                         employees
                                                            if in a low-                   keeping                         must respond
                                                            hazard                         requirements                    to a federal
                                                            industry, from                 for injury and                  Occupational
                                                            programmed                     illness                         Safety and
                                                            safety                         prevention                      Health
                                                            inspections.                   programs.                       Administrati
                                                                                                                           on (OSHA)
                                                                                                                           data
                                                                                                                           initiative
                                                                                                                           survey.\

Benefits      All employers       Employers     \b          \b              \b             Employers must  Employers must  \b            \b
(federal      offering a pension  with a group                                             offer to        allow up to 12
only)\\f      plan or a group     health plan                                              extend group    weeks' unpaid
              health plan must    with two or                                              health plan     leave for
              comply with         more                                                     coverage to     medical and
              federal rules.      participants                                             employees and   family reasons
                                  must limit                                               family members  and must
                                  effects of                                               after a         maintain
                                  "preexisting                                             qualifying      parity of
                                  medical                                                  event, such as  rules on
                                  condition"                                               job             aggregate and
                                  and provide                                              termination,    annual dollar
                                  a specified                                              divorce, or     limits on
                                  hospital                                                 reduction in    benefits for
                                  stay for                                                 hours.          medical/
                                  childbirth.                                                              surgical and
                                                                                                           mental health
                                                                                                           services.

Disability    All employers must  \b            Employers   \b              \b             \b              \b              \b            \b
benefits      provide workers'                  must allow
(state        compensation                      female
only)\g       insurance and                     employees
              collect employee                  up to 4
              contributions to                  months'
              disability                        pregnancy
              insurance                         disability
                                                leave.

Hiring and    All employers must  \b            \b          \b              \b             \b              \b              \b            Federal:
termination   follow immigration                                                                                                         Employers
(federal and  laws; employers                                                                                                            must give
state)\h      may use lie                                                                                                                employees 60
              detector tests                                                                                                             days' notice
              only in limited                                                                                                            of a plant
              circumstances; and                                                                                                         closing or
              federal                                                                                                                    mass layoff.
              contractors with
              federal contracts
              over $25,000 must
              maintain a drug-
              free workplace.

Taxes         All employers must  \b            \b          \b              \b             \b              \b              \b            \b
(federal and  withhold both
state)\i      federal and state
              income taxes, pay
              and withhold
              Social Security
              and Medicare
              taxes, and pay
              federal and state
              unemployment
              taxes.

Environment   All employers must  \b            \b          Federal:        \b             \b              \b              \b            \b
(federal and  control air                                   Employers must
state)\j      emissions of                                  file an annual
              certain                                       Toxic Release
              pollutants, the                               Inventory.
              types of                                      California: No
              pollutants                                    disposal of
              discharged into                               cancer-
              U.S. waters, and                              causing
              the use and                                   chemicals
              disposal of                                   where they can
              hazardous                                     enter drinking
              substances.                                   water is
                                                            allowed.
-----------------------------------------------------------------------------------------------------------------------------------------------------
\a Wage and hour laws include federal statutes--the Fair Labor
Standards Act, Walsh-Healey Act, and Contract Work Hours and Safety
Standards Act--and California law codified in the California Labor
Code, Industrial Wage Order No.  1-98. 

\b This number of employees does not trigger any additional legal
requirements for a firm in this area of law. 

\c Federal civil rights laws include Title VII of the Civil Rights
Act of 1964, the Equal Pay Act under the Fair Labor Standards Act,
the Age Discrimination in Employment Act, Executive Order 11246, the
Americans With Disabilities Act, Section 503 of the Rehabilitation
Act, the Vietnam-Era Veterans' Readjustment Assistance Act, and the
Uniformed Services' Employment and Reemployment Rights Act;
California law includes the Fair Employment and Housing Act. 

\d Federal statutes involving labor relations include the National
Labor Relations Act and the Labor-Management Reporting and Disclosure
Act. 

\e The applicable federal statute is the Occupational Safety and
Health Act; the California law is the California Occupational Safety
and Health Act.  California administers its own occupational safety
and health plan in lieu of the federal standards, as provided in sec. 
18 of the Occupational Safety and Health Act.  Here and in app.  II,
we have, however, specified federal minimum requirements as well as
unique state requirements. 

\f Federal statutes include ERISA, the Family and Medical Leave Act,
the Health Insurance Portability and Accountability Act, the Mental
Health Parity Act, the Newborns' and Mothers' Health Protection Act,
the Consolidated Omnibus Budget Reconciliation Act, and the Uniformed
Services' Employment and Reemployment Rights Act. 

\g The California statutes covering employee disability include
California Disability Insurance, California Workers' Compensation,
and the Fair Employment and Housing Acts. 

\h Applicable federal law includes the Immigration and Nationality
Act, the Employee Polygraph Protection Act, the Drug Free Workplace
Act, and the Workers' Adjustment and Retraining Notification Act. 

\i The applicable federal and state laws are codified in the federal
and state income tax codes. 

\j Federal statutes include the Clean Air Act, the Federal Water
Pollution Control Act, and the Resource Conservation and Recovery
Act; California statutes include the California Clean Air Act, the
Porter-Cologne Water Quality Control Act, and the Hazardous
Substances Act. 

Source:  GAO analysis of federal and state laws and regulations. 


      MOST LABOR, TAX, AND
      ENVIRONMENTAL REQUIREMENTS
      APPLY TO ALL CALIFORNIA
      MANUFACTURING FIRMS,
      REGARDLESS OF NUMBER OF
      EMPLOYEES
---------------------------------------------------------- Letter :3.1

For the most part, these labor, tax, and environmental requirements
apply regardless of the number of workers employed by a firm. 
However, as indicated in table 1, some of these laws have specific
legal provisions that are triggered as the number of employees at a
firm increases.  In general, neither tax nor environmental
requirements vary with an increasing number of employees.  When a
firm hires its first employee, it must immediately comply with all
requirements for federal and state income tax withholding, federal
and state unemployment insurance taxes, and federal Medicare and
Social Security taxes.\4

Similarly, any firm, regardless of its size, must generally comply
with all relevant environmental requirements if it produces specific
amounts of some type of pollution or handles certain amounts of
specified hazardous substances.\\5

Some labor law requirements, though, show greater sensitivity to the
number of employees in a firm.  In particular, adding employees to a
firm has critical impact on the application of federal civil rights
laws and certain federal requirements for employee benefits.  Thus,
federal law includes prohibitions against racial, religious, and
sexual discrimination that apply only if a firm has at least 15
employees.\6 Certain federal requirements for employee benefits also
exempt firms of smaller sizes; for example, federal requirements for
12 weeks of unpaid family leave for an employee for medical or
family-related reasons apply only if a firm has at least 50
employees.  In addition, some other federal requirements are
triggered only after a firm hires a specified number of employees,
such as the requirement to give employees 60 days' notice of a plant
closing or mass layoff (100 employees) or to conduct a programmed
OSHA safety inspection of a firm in a low-hazard industry (10
employees). 

In California, however, overlapping state labor law requirements have
muted the impact of some of the federal thresholds, extending the
same or similar requirements to smaller firms.  For example, state
law prohibits sexual harassment in firms of any size, and racial or
sexual discrimination at all firms with at least five employees.  As
another example, state law requires all firms with at least five
employees to allow their female employees up to 4 months' pregnancy
disability leave in addition to federal family leave requirements. 
Regarding OSHA, California law does not exempt firms of any size from
safety inspections. 


--------------------
\4 However, firms with smaller amounts of total payroll may have
fewer deposit and reporting requirements. 

\5 Certain environmental requirements apply only if a firm produces
or otherwise handles some threshold amount of pollutant or hazardous
substance.  Although these regulatory limits may effectively exempt
smaller firms from these requirements, this is not always the case. 
For example, air pollution regulations cover the emission of volatile
paints and solvents used in manufacturing operations.  A large firm
with numerous employees may effectively exempt itself from the
requirements by acquiring technical equipment to better clean up its
paint and solvent emissions, while a much smaller firm may not have
the same equipment, thereby subjecting its operations to air
pollution control requirements. 

\6 However, a firm with one employee and a federal contract or
subcontract of at least $10,000 is subject to various civil rights
laws. 


      INTERRELATIONSHIPS OF
      FEDERAL AND CALIFORNIA STATE
      REQUIREMENTS ADD COMPLEXITY
      AND STRINGENCY TO LABOR,
      TAX, AND ENVIRONMENTAL
      REGULATION
---------------------------------------------------------- Letter :3.2

Both federal and state governments play active roles in the
regulation of the workplace, taxes, and the environment.\7 The
relationship between federal and state laws is complex and, to
varying degrees, the requirements are intertwined.  Thus, under the
overall regulatory schemes, employers must comply with both federal
and state laws and regulations.  In the case of California, employers
often face more comprehensive labor, tax, and environmental
regulation by the state than by federal law.  In addition, some areas
of state regulation have no federal counterpart.  Thus, federal
regulatory reform efforts intended to lessen the burden of compliance
may be limited by those requirements under state laws that are more
comprehensive. 

Although some areas of labor law regulation are covered only by state
law (for example, workers' compensation insurance and disability
insurance), most regulation includes various forms of federal and
state interaction, ranging from the total preemption of any state
regulation by federal regulation to "dual control" by federal and
state governments to the implementation of minimum federal standards
by state authorities.  Certain federal statutes either explicitly or
implicitly preempt state regulation:  ERISA, the National Labor
Relations Act, and the Immigration and Nationality Act.  However,
other statutes--for example, the Fair Labor Standards
Act--specifically allow dual control if the state regulation is
stricter than federal requirements.  Still other federal statutes,
such as the Occupational Safety and Health Act, allow states to set
up and enforce their own regulatory program with federal approval, in
lieu of a federal program. 

In California, the net effect of these combined federal and state
labor law requirements is that California manufacturing firms must,
in many cases, meet higher labor standards than those required by the
federal government.  For instance, as of March 1998 the California
minimum wage was $5.75--an amount that is 60 cents higher than that
required under federal law.  Similarly, while the California
Occupational Safety and Health Administration (Cal/OSHA) program
administers all federal health and safety standards, it includes
additional state standards. 

Tax regulation is conducted independently by both federal and state
governments.  Each has authority to tax its citizens and corporations
for the support of its operations.  Therefore, a California firm must
follow separate federal and state tax codes for withholding
employees' federal and state income taxes, and for payment of
corporate income taxes.  Certain taxes--Medicare and Social
Security--are levied only by the federal government.  Unemployment
insurance tax, on the other hand, is collected by both federal and
state governments to run the states' federally approved unemployment
compensation programs. 

Even though federal and state governments run parallel tax programs,
different definitions for the same key regulatory terms create
complexity for employers.  For example, the definition of an
"employee" varies between states (including California) and the
federal government.  California law provides a broader definition of
"employee" than that found in federal law, thereby including more
workers under the provisions of state income tax withholding and
unemployment insurance than would be included using the federal
definition.  In doing so, California ensures broader coverage of its
citizens under the state unemployment insurance and disability
insurance programs. 

Environmental regulation has become, since the 1970s, a joint effort
among federal, state, and local authorities.  Traditionally,
regulation of pollution control, like other "police powers," had been
left to state and local governments.  However, with the passage of
major federal environmental statutes in the 1970s, EPA has broad
authority to set minimum standards for air, water, and hazardous
substances control.  Typically, state authorities have used these
federal minimum standards to create their own environmental program,
continuing to enforce these standards within their own state. 

As with other regulatory areas, California environmental requirements
in some areas have added stringency to the federal law.  Thus, under
California law, employers dealing with chemicals known to the state
to cause cancer have a broad requirement to give "reasonable and
clear" warning to any individual exposed to those chemicals.  As
another example of state regulation, employers that produce 12,000
kilograms of hazardous waste per year must develop a plan for waste
reduction every 4 years, and failure to take action on the plan can
lead to monetary penalties under the state program. 

Thus, in these three major areas of regulation--labor, tax, and
environment--the combination of federal and California state law
creates a complex web of regulation for employers.  Moreover,
California law often sets higher standards for regulatory compliance
than required by federal law.  Consequently, federal reform efforts
may be limited in practical effect by the existence of supplementary
or independent state regulatory programs. 


--------------------
\7 Local law (city, county, and so on) also plays a significant role
in regulation, particularly with regard to environmental concerns. 
However, discussion of the impact of local laws is beyond the scope
of this report. 


   MANY SOURCES OF INFORMATION ARE
   AVAILABLE TO HELP FIRMS
   IDENTIFY APPLICABLE LAWS
------------------------------------------------------------ Letter :4

California and federal agencies have taken proactive steps to inform
manufacturers about employers' duties under existing laws and
regulations as well as about proposed changes in those requirements. 
For example, federal and state agencies have made information
available to the public on many laws and requirements through
publications and Web sites.  In addition, many federal and state
agencies have established focal points and other mechanisms through
which manufacturing employers can obtain information about the
agency- specific laws.  (See table 2.) Many agencies also provide
information tailored to meet the needs of small businesses and
start-up employers.  However, California manufacturing employers
cannot rely on a single governmental source or focal point to provide
them with a comprehensive understanding of the many federal and state
workplace, tax, and environmental laws that apply to them and must
seek out information from the public agency responsible for enforcing
the law.  Consequently, firms we visited continued to rely on the
expertise and knowledge provided by trade and business associations
like the California Chamber of Commerce or by professional
practitioners. 



                                         Table 2
                         
                           Types of Services and Information on
                         Federal and State Laws Made Available by
                                     Public Agencies

                                                                   Agency
                                                                   focal
                  Publication                          Seminars/   point for
                  s/           \Handbook   Internet    workshops/  small       Assistance
Source            brochures    on laws     Web site\a  training    businesses  centers\b
----------------  -----------  ----------  ----------  ----------  ----------  ----------
Federal agencies
-----------------------------------------------------------------------------------------
EEOC              X            X           X           X           X

EPA\c             X            X           X           X           X           \d

IRS               X            X           X           X           X

Labor             X            X           X           X           X

Small Business    X                        X           X           X           X
Administration


California agencies
-----------------------------------------------------------------------------------------
Cal/EPA           X            X           X           X           X           X

California Trade  X            X           X           X           X
and Commerce
Agency\e

Department of     X            X           X           X
Fair Employment
and Housing\f

Department of     X            X           X           X
Industrial
Relations\g

Employment        X            X           X           X           X
Development
Department\h

Franchise Tax     X            X           X           X
Board\i

State Board of    X            X           X           X
Equalization\j
-----------------------------------------------------------------------------------------
\a Agency Web sites vary:  some contain all of an agency's laws, and
others are less comprehensive. 

\b Assistance centers are offices at which information and staff are
available to the public.  For example, Cal/EPA's drop-in assistance
centers help small businesses comply with permit requirements. 

\c EPA has delegated enforcement and implementation authority for
many federal environmental statutes to Cal/EPA. 

\d EPA operates several "compliance assistance centers" on Web sites. 
Although they are not physical centers, they provide access to
technical information and enable the public to ask questions of
technical experts. 

\e The California Trade and Commerce Agency is the state's lead
agency created to promote economic development, job creation, and
business retention. 

\f The Department of Fair Employment and Housing protects the rights
of people to seek, obtain, and hold employment without discrimination
because of race, religion, gender, age, or physical handicap. 

\g The Department of Industrial Relations oversees laws for wages,
equal pay, occupational safety and health, overtime, workers'
compensation, and prohibition against discrimination based on sexual
orientation. 

\h The Employment Development Department handles audit and collection
of unemployment insurance, disability insurance, employment training,
and personal income withholding taxes. 

\i The Franchise Tax Board collects personal, corporate, bank, and
franchise taxes. 

\j The State Board of Equalization collects sales and use, fuel,
alcohol, tobacco, timber, and other taxes and some fees that fund
specific state programs. 


      INFORMATION FROM FEDERAL
      AGENCIES IS AVAILABLE TO
      MANUFACTURERS
---------------------------------------------------------- Letter :4.1

Although no one federal agency has yet compiled a comprehensive set
of federal laws applicable to manufacturers, the federal government,
according to agency officials, has striven to expand its role beyond
the promulgation and enforcement of regulations.  Agencies have
attempted to help businesses better understand their legal
responsibilities and assist them to make regulatory compliance less
burdensome.  Manufacturers, in California and throughout the nation,
can learn about their federal legal responsibilities from a multitude
of publications, including law handbooks, informational brochures,
and guides that federal agencies have compiled and made available to
the business community.  For example, IRS has a variety of
publications that describe various business taxes and record-keeping
requirements for small businesses.  With the cooperation of the Small
Business Administration (SBA), it disseminates much of this
information through SBA district and regional offices.  Labor has a
variety of guides and a small business handbook that summarizes the
laws Labor enforces.  The guides aim to clarify the various duties
placed on employers so they can more easily develop compliance
strategies and identify the appropriate agency for questions and
assistance.  EPA has prepared publications that outline the federal
environmental laws and regulations relevant to each industry sector
as well as information about environmental problems and solutions,
case studies, and tips about complying with regulations.  For
example, EPA's publication entitled Profile of the Electronics and
Computer Industry\8 describes the manufacturing processes in the
industry and identifies federal laws that apply to the industry.  EPA
has prepared similar profiles for 26 other industry sectors. 

Federal agencies responsible for enforcing workforce, tax, and
environmental laws, in response to SBREFA and because of their
interest in helping businesses better understand applicable laws,
have placed their agencies' laws and regulations on their Internet
Web sites.  Although many agencies have tailored their Web sites to
address the special needs of small businesses and start-up employers
in order to comply with SBREFA, much of what the agencies have made
available to small businesses is also applicable and helpful to
businesses of all sizes.  For example, the EEOC has developed a small
business information Web site that includes laws and processes that
apply to all businesses.  Federal agencies have also offered
businesses the opportunity via Web sites to comment on the potential
burden proposed changes to laws or regulations could have on their
business activities.  Examples follow: 

  -- IRS' Web site includes a list of tax regulations issued since
     August 1, 1995, with references to plain-language summaries and
     IRS news bulletins that provide businesses with changes in
     procedures and tax rulings.  The Web site also offers the
     opportunity for interested parties to comment on proposed
     changes to regulations.  In addition, it includes a business tax
     kit with a small business tax guide, information on how a
     business can apply for an employer identification number, and
     other taxpayer information. 

  -- Labor's Web site includes a handbook for small businesses that
     summarizes laws Labor oversees.  The Web site also provides
     "interactive" expert advice on workplace laws in a format that
     mimics the interaction an individual might have with a human
     expert.  Called Employment Laws Assistance for Workers and Small
     Business ("elaws"), the system provides manufacturers with
     advice on issues such as workplace safety and the Family and
     Medical Leave Act. 

  -- The EEOC Web site also provides information about laws for small
     businesses; record-keeping and reporting requirements;
     substantive issues of concern to small businesses; and types of
     assistance, guidance, and publications available. 

  -- EPA's Web site, in addition to providing regulations and
     proposed rules, catalogs and profiles the laws and regulations
     that are relevant and applicable to several specific industries. 
     EPA's Office of Compliance, with input from trade groups and
     other federal and state agencies, has developed on-line
     "assistance centers" for five specific industry sectors heavily
     populated with small businesses that face substantial federal
     regulation, and it expects to add four more shortly.  The
     centers have been designed to serve as the first place that
     small businesses and agencies that assist small businesses can
     go to get comprehensive, easy-to-understand compliance
     information specifically targeting these sectors.  In addition
     to technical and regulatory information, the Web site provides
     users with a link to regulatory experts. 

  -- SBA's U.S.  Business Advisor Web site is a compilation of laws,
     regulations, and proposed changes to laws from other executive
     agencies that cover many but not all of the environmental,
     safety, communications, health, immigration, and labor
     requirements of small businesses.  In addition, the Web site
     contains answers to questions most commonly asked of the
     Department of Defense, OSHA, and IRS. 

In addition to providing information in publications and on Web
sites, federal agencies offer manufacturers opportunities to attend
training or seminars at which they can meet agency staff, learn about
the current regulatory environment and record-keeping requirements,
and receive technical assistance to facilitate compliance with
federal laws and regulations.  In addition, IRS has produced a
videotape that it distributes through its district offices to help
business people understand tax laws and record-keeping requirements
related to starting a new business. 


--------------------
\8 EPA, Profile of the Electronics and Computer Industry (Washington,
D.C.:  EPA, Sept.  1995). 


      STATE AGENCIES HAVE
      IMPLEMENTED MULTIPLE EFFORTS
      TO INFORM MANUFACTURERS
      ABOUT APPLICABLE LAWS
---------------------------------------------------------- Letter :4.2

The California state agencies responsible for enforcing workplace,
tax, and environmental laws and the agency tasked with promoting
economic growth in California have taken major steps to make
information about the state's laws and permit requirements for
various business activities available and accessible to manufacturers
in California.  Although manufacturers cannot turn to a single state
agency to learn about their legal responsibilities, state agencies,
like their federal counterparts, have developed informational
publications, including guides to starting up businesses in the
state, law handbooks, brochures, and pamphlets.  For example, the
Department of Fair Employment and Housing has prepared brochures and
publications to provide businesses with information about housing,
equal employment opportunity (EEO), and discrimination laws.  The
state's Franchise Tax Board, besides having the state's tax code
available in a hard copy handbook format, has also prepared a chart
that provides a brief synopsis of each of the state's tax laws and
the names of the state agencies responsible for enforcing them. 
Cal/EPA has compiled the state's environmental laws in a handbook. 

Several California state agencies have placed their laws,
regulations, and requirements on their Internet Web sites for
businesses to access.  In addition, some agencies have provided
businesses the opportunity to comment on proposed regulations using
these Web sites.  California's tax agencies--the Employment
Development Department, the Franchise Tax Board, and the State Board
of Equalization--provide information about employer tax publications,
forms, and tax rates as well as other information, such as the
answers to questions most commonly asked by businesses.  Cal/EPA has
made its regulations and many state and local requirements for
permits available to businesses through its Internet Web site. 
Moreover, current forms and applications required by a wide range of
authorities that provide permits are available to businesses on the
Internet, and some forms can be completed electronically on the
Internet.  The Department of Industrial Relations, the state agency
responsible for worker safety and employment laws, is working toward
making all of the laws it enforces available to manufacturers as
well.  Through California's Trade and Commerce Agency Web site,
manufacturers can access a handbook that describes the state and
local processes for obtaining permits in general and the necessary
paperwork businesses must prepare when applying for environmental
permits. 

State regulatory agencies offer business representatives the
opportunity to attend seminars, training workshops, and presentations
designed to educate representatives on their firms' legal
responsibilities.  The Franchise Tax Board has a taxpayer advocate
branch that provides taxpayer education and informational seminars on
Saturdays.  In addition, program specialists are available to assist
taxpayers with complaints or problems they may have as a result of
tax audits.  The Cal/OSHA staff performs outreach to businesses to
ensure that they are aware of the state's worker safety requirements. 

In addition, the California Trade and Commerce Agency's Office of
Permit Assistance provides businesses with a focal point for learning
about requirements for obtaining state environmental permits at one
location.  This office has compiled and collated information from
other state and local agencies responsible for enforcing state and
local environmental permit requirements into the California Permit
Handbook, a streamlined guide for understanding the environmental
permits most often required in California.  Office staff also provide
technical consultation for businesses experiencing difficulties
complying with state or local permit requirements. 

Cal/EPA has developed a system through which small businesses can
access many state agencies' laws and regulations at one location, and
the Office of Administrative Law will have the entire California Code
of Regulations available on the Internet through this system within
the next 2 months.  The agency compiled and collated many of the
state and local laws and permit requirements and established permit
assistance centers throughout the state.  Staff at these centers help
businesses understand the state, local, and regional environmental
and other permit requirements businesses must satisfy before they can
start up or expand.  To extend this type of assistance to people
located outside the geographic areas covered by existing permit
assistance centers, Cal/EPA has developed an on-line program, called
CalGOLD, by which people can determine the federal, state, and local
permit requirements through the Internet.  Someone wanting to start
up a new or expand an existing business can submit information on the
type of manufacturing and its proposed location, and the system will
identify many of the relevant permit requirements needed to operate
the business.  CalGOLD also provides users with linkages to other
federal, state, or local agencies' addresses or Web sites to contact
for assistance. 


      ADVOCACY AND TRADE
      ASSOCIATIONS ALSO HELP
      MANUFACTURERS WITH LAWS AND
      CHANGES
---------------------------------------------------------- Letter :4.3

California's Chamber of Commerce has a number of resources available
to manufacturers, most of which must be purchased, that can help
businesses learn about and comply with many California and federal
laws applicable to them.\9 The Chamber of Commerce has an Internet
Web site that member businesses can access to learn about employment,
worker health and safety, and environmental and other requirements. 
In addition, the Chamber of Commerce offers businesses its California
Labor Law Digest, which explains the labor laws, provides compliance
advice, and includes record-keeping forms and checklists. 
Individuals can also purchase business start-up kits with federal,
state, and local forms that they must complete before operating a new
business.  The Chamber of Commerce periodically issues newsletters,
regulatory updates, and business survival guides to help businesses
understand the current regulatory environment and any proposed
changes that may affect their business operations.  From the Chamber
of Commerce, businesses can also purchase the posters that the
government requires employers to display to inform their employees of
workplace laws that protect them. 

In addition, associations representing the electronics and aerospace
industries and human resource managers keep their memberships
informed of proposed legislation and changes to existing legislation
that may have an impact on their members' business opportunities. 
For example, the American Electronics Association, a trade group
representing the U.S.  electronics, software, and information
technology industries, has tracked and supported federal legislation
providing for an increase in the number of highly skilled,
high-technology foreign workers who are provided visas to work in
this country under the federal H-1B program.\10 In addition, the
American Electronics Association has an Internet Web site, publishes
newsletters, and sponsors conferences and seminars to keep its
members informed of new legislation or changes to existing California
and federal legislation.  The Aerospace Industries Association (a
national trade association for the aerospace industry), learns about
changes in state laws through ongoing networking with its members and
also monitors federal legislation that may have an impact on
aerospace manufacturers.  To keep its members informed of new or
changing legislation, it publishes a monthly newsletter.  The Society
for Human Resource Management offers its human resource professionals
a variety of ways they can learn about proposed changes in the
regulatory environment.\11 For example, it analyzes the impact
current court decisions and legislation may have on the human
resource community and makes this information available to its
membership through its Web site and various publications. 

Many firms rely on trade and advocacy organizations to keep them
informed about applicable laws and administrative record-keeping
requirements.  To learn what they need to do to comply with existing
laws and paperwork requirements, firm officials have used the Chamber
of Commerce's Internet Web site, telephone hot line, newsletters, and
business guides.  Several firms' officials cited the California
Chamber of Commerce's Web site and newsletters as the most reliable
sources of information about state and federal laws and proposed
changes.  Another firm official said that the Society for Human
Resource Management, through newsletters, has been effective in
keeping his firm aware of changes to laws that have an impact on its
human resource operations. 


--------------------
\9 The California Chamber of Commerce is an 11,000-member employer
association that represents the interests of private employers in
California. 

\10 Under the H-1B program, employers may hire nonimmigrant aliens in
certain specialty occupations.  Employers must attest that certain
conditions exist, including that the workers will be paid the higher
of the actual wage paid to other workers similarly employed or the
local area prevailing wage for the occupation. 

\11 The Society for Human Resource Management is an association that
represents over 100,000 professional human resource managers and
students. 


      FIRMS OBTAIN MUCH OF THEIR
      KNOWLEDGE OF LAWS FROM PAID
      PROFESSIONALS
---------------------------------------------------------- Letter :4.4

Despite public agency and trade association efforts to inform
manufacturers about applicable laws and regulations, the firms we
visited continue to rely on expertise and assistance from the
professional practitioners they hire.  The owner of the smallest
manufacturing firm we visited contracts with an environmental
consulting firm to keep him informed of legal responsibilities;
assist with documenting the firm's compliance with safety, health,
and environmental standards; and inspect the plant each quarter for
compliance.  The consulting firm also prepared the manufacturer's
permit application for its metal-plating process and waste treatment
and made subsequent revisions to the original permit application. 
Firms, in general, used private attorneys specializing in labor law
for counsel on human resource and personnel issues.  For example, one
firm, in implementing a new leave policy to comply with the Family
Medical Leave Act (FMLA), consulted extensively with its lawyer
specializing in labor law. 

Firm officials said they have been hesitant to rely on information
provided by public regulatory agencies for several reasons.  Some
said that they have experienced difficulties in identifying the
appropriate department or person to contact at a public agency.  When
they did obtain information from agency staff, officials with a few
firms said they had concerns about its accuracy and reliability.  One
firm official said that when she contacted a federal agency for
assistance she was told that the agency official could not interpret
a law for her and suggested instead that she seek an attorney's
assistance.  Another firm official said that several staff he
consulted at the same regulatory agency interpreted the same law
inconsistently.  One official at a small firm said that even if
public agencies have developed programs to help him learn about the
relevant laws, he is too busy managing his employees and the
production line to spend time researching and learning about laws and
instead hires consultants to do this work for him. 


   ELECTRONICS AND AEROSPACE FIRMS
   HAVE DEVELOPED STRATEGIES TO
   COMPLY WITH LAWS RELATED TO
   HUMAN RESOURCE OPERATIONS BUT
   HAVE CONCERNS ABOUT SOME
   REQUIREMENTS
------------------------------------------------------------ Letter :5

The firms we visited have devised different strategies to ensure
compliance with those legal requirements related to their human
resource operations--in general, the workplace and tax requirements
listed in appendixes II and III.  The type of strategy varied with
the size of the firm, with larger firms more often having experts on
board to handle specialized issues.  The human resource staff at the
firms we visited were generally aware of the firms' legal
requirements and had developed their human resource policies and
procedures to meet their legal responsibilities.  These individuals
sometimes used outside resources to address these requirements,
particularly when compliance involved very routine or highly complex
tasks.  Although firms generally seemed to have integrated these
compliance strategies into their daily operations, firm officials
continued to voice concerns about the general burden, complexity,
cost, and paperwork associated with many regulatory requirements. 
Further, firms said that the ambiguity sometimes associated with
requirements left firms unsure of whether they were in compliance. 
Finally, some firms expressed concerns in particular about state
laws, although the firms did identify areas in which state laws have
improved the workplace. 


      ORGANIZATION OF HUMAN
      RESOURCE RESPONSIBILITIES
      VARIED WITH SIZE OF FIRM
---------------------------------------------------------- Letter :5.1

As part of their regular operations, manufacturing employers must
typically conduct a number of human resource management activities,
which include the following personnel-related activities:  setting
compensation; recruiting, hiring, promoting, and terminating workers;
providing training and development; assigning duties; monitoring
performance; addressing labor relations; meeting health and safety
requirements; administering health, pension, and other benefits; and
maintaining personnel records.  The location of responsibility for
these activities within firms varied according to their size,
industry, and particular management style and culture and was
influenced by such other forces as market competition and federal and
state law.  At the firms we visited, activities that human resource
managers oversee were affected by workplace and tax laws to the
extent that these activities related to employee compensation, but
these activities were not affected by environmental laws. 

Our case study analysis of human resource operations at the
California manufacturing firms we visited indicated that larger firms
had more complex human resource systems, staffed with more
specialized personnel.  This finding was expected and consistent with
the views of experts we consulted and the general human resource
literature.  At the smallest firm, which had fewer than 10 employees,
the owner directly handled many human resource issues, such as
hiring, leave, and terminations; his secretary helped with payroll
and paperwork associated with enrolling employees in the pension and
health plans.  At firms that had closer to 100 employees, a human
resource manager handled many human resource functions.  The largest
firm we visited, a subsidiary of a multinational company, had several
human resource specialists at its California location but handled
some issues, such as its health insurance contract, through its
corporate office. 

Responsibility for understanding and complying with legal
requirements related to human resource operations at these firms was
focused largely in the human resource departments but overlapped into
other parts of the firms' organization.  Hence, compliance with human
resource-related requirements involved multiple departments and
required coordination among them.  For example, meeting employee
health and safety requirements, as set under OSHA and similar state
laws, was addressed by human resource personnel, a separate
OSHA/environmental department, or the firm's production department. 
In the very small firm, the owner, who managed the firm's
manufacturing operations, was closely involved with ensuring that
health and safety requirements were met.  In somewhat larger firms,
this was a joint effort of staff overseeing the manufacturing
activities (who ensured that safety requirements were met on the
production floor) and human resource departments (who handled
administrative areas such as accident reports to OSHA).  In the
largest firm, an environmental and safety group oversaw
implementation of OSHA requirements.  Similarly, human resource staff
worked with accounting or payroll groups to comply with requirements
related to employees' pay.  For example, completing tax withholding
forms or determining which employees should be paid extra for
overtime to comply with the Fair Labor Standards Act (FLSA) were
examples of human resource functions that were integrated with
payroll or accounting. 


      FIRMS HAVE INTEGRATED
      REGULATORY COMPLIANCE INTO
      THEIR STANDARD POLICIES AND
      OPERATING PROCEDURES
---------------------------------------------------------- Letter :5.2

At the firms we visited, efforts to comply with those federal and
state laws related to hiring, termination, and other workplace issues
have been integrated into the employers' standard operations.  Firms
have incorporated policies that meet their legal requirements into
employee handbooks.  For example, one firm's employee handbook
included sections addressing equal employment opportunity provisions,
determining which employees were exempt or nonexempt from overtime
pay, managing family and medical leave and pregnancy leave, limiting
contributions to the 401(k) plan, and reporting employee injuries. 
Firms have implemented personnel procedures in many areas to ensure
compliance with legal requirements.  For example, to comply closely
with EEO laws, one firm distributed lists of acceptable,
nondiscriminatory questions to company staff before they interviewed
potential employees.  Several firms have modified their leave
policies to comply with FMLA.  Further, firms provided training on
chemical and equipment safety that met California's safety and health
requirements.  Notifying employees who are separating from the firm
of their rights to extended health insurance coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) was
also a standard procedure at firms covered by the requirement. 
Several firms routinely held safety committee meetings in which
management and line workers discussed compliance with safety
requirements.  Also, completing the I-9 forms indicating that new
employees were authorized to work in the United States was a routine
procedure when new employees began their employment. 

The firms we visited frequently retained outside resources to perform
certain tasks required by law, particularly those involving either
very routine or very complex processes.  Examples follow: 

  -- To deal with routine duties involving employee payroll taxes and
     income tax withholding, most of the firms relied on an outside
     payroll service.  The firms used the expertise of payroll
     specialists to ensure that they complied with various laws
     related to payroll procedures, including those requiring new
     employee registers, and EEO reporting.  For example, with the
     recent requirement that new employees' names be sent to a state
     agency to determine if the employee has any outstanding child
     support due, the payroll service for several of the firms we
     visited will routinely forward the names of all new employees,
     eliminating the need for the firm itself to report the names. 

  -- Outside firms that administered certain programs completed some
     required reports that were particularly complex.  For example,
     detailed annual forms required by ERISA for pension funds were
     prepared for a fee by the companies administering the retirement
     funds at all the firms we visited. 

  -- Three of the firms had their health insurance administrators
     collect insurance payments directly from former employees with
     coverage under COBRA, which allowed them to continue their
     coverage after their employment with the firm ended.  Timely
     collection of these funds from former employees had been an
     administrative problem for some firms. 

As table 3 shows, firms we visited used outside help to address
requirements for many human resource functions. 



                          Table 3
          
              Implementation of Human Resource
                 Operations at Seven Firms

                              Number of firms
                  ----------------------------------------
                                Operations
                                handled
                  Operations    partly        Operations
                  handled       internally    handled
Human resource    primarily     and partly    mostly
operation         internally    externally    externally
----------------  ------------  ------------  ------------
Setting wages     7             0             0
and classifying
employees as
exempt or
nonexempt

Filling out       2             4             1
hiring and
related
paperwork

Preparing EEO     3             0             1
reporting
forms\a

Administering     0             1             6
pension plan(s)

Administering     0             0             7
health plan(s)

Preparing         2             0             5
payroll,
including
calculating
employee taxes

Complying with    5             2             0
health and
safety
requirements

Administering     0             3             3
COBRA (health
insurance)
requirements\a

Administering     0             0             7
workers'
compensation

Administering     6             0             0
FMLA
requirements\a
----------------------------------------------------------
\a This operation was required only for the larger firms. 


      EMPLOYERS HAD VARIED
      CONCERNS ABOUT REGULATORY
      REQUIREMENTS
---------------------------------------------------------- Letter :5.3

During our in-depth discussions with managers from the firms visited,
each expressed some frustration about certain governmental
requirements imposed on them, although there was little pattern in
their complaints.  Certain laws were not a problem for some firms
because they had not encountered a workplace situation covered under
those laws, whereas others, who had considerable experience with
situations covered by the laws, found them burdensome.  For example,
two firms found the FMLA requirements to be no problem because no
employees had ever asked for that type of leave, whereas two firms
with greater family leave usage found the process of categorizing and
recording leave a greater concern.  Compliance with requirements to
accommodate the needs of disabled workers was not an issue for
several firms; some said they had not had any employees who needed
special accommodations.  In one case, the firm had built its plant to
include handicapped access ramps and bathrooms, which it believed
probably eliminated the need for some special accommodations.  A
January 1, 1998, change in California state law that eliminated the
requirement to pay certain workers extra wages for working more than
8 hours a day--a state regulation that had been more stringent than
the federal FLSA requirement--exemplifies the variation in employers'
concerns with workplace regulation.  Although the regulation was
repealed with the aim of permitting more flexibility in setting
worker schedules, two of the firms reported that they have continued
to provide overtime pay for work beyond 8 hours a day.  Managers at
one firm said overtime pay provides an incentive for employees to
work at least their regular hours, thereby maximizing manufacturing
machine use; the other firm's managers believed that the 8-hour day
rule maintained employee morale and productivity. 

Managers at firms often articulated frustration with excessively
difficult requirements or burdensome paperwork, particularly when the
managers believed the requirement did not accomplish results. 

  -- Some firms complained about the requirement for tracking and
     categorizing family and medical leave under FMLA separately from
     other leave, as required under federal law.  Two firms, both
     with several hundred employees, have decided to require that all
     leave be approved by one specific person in order to ensure
     accurate and consistent approval, even though it is burdensome
     for that individual.  Managers at one firm were particularly
     frustrated with the requirement to provide separate family and
     medical leave because they believed they already had a very
     liberal leave policy without the FMLA-generated paperwork
     requirements. 

  -- Some firms had difficulties with requirements under the COBRA
     provisions that govern health insurance, particularly with
     defining and identifying qualifying events, such as when former
     spouses of employees qualify for extended coverage, and
     informing all qualified beneficiaries. 

  -- Regarding EEO requirements, one manager commented that under law
     he is required to collect information on applicants' ethnic
     background for the EEO-1 form but is not allowed to ask
     applicants questions about race, age, and other characteristics. 
     Another firm has decided not to let its workforce exceed 100
     employees or bid on government contracts over a particular size
     to avoid certain EEO requirements, such as the need to prepare
     affirmative action plans and an EEO reporting form that it
     considers administratively burdensome.  Another manager
     commented that she keeps careful records about attendance at EEO
     training and resolution of internal EEO investigations--a
     time-consuming process--to attempt to protect the company in the
     event of a lawsuit.  However, some company managers believed
     that such steps might not be sufficient to protect the firms
     from potential legal liability. 

Managers at firms we visited were also frustrated about legal
requirements that they believed were unclear and left them vulnerable
to fines or litigation because of noncompliance.  For example, two
firms complained about what they perceived to be subjective, vague
distinctions between workers who are and are not exempt from the
overtime pay requirements under FLSA and the related state law.  One
called it "the most confusing part of labor law," noting that it left
the company vulnerable to being out of compliance and to paying back
wages.  The other, commenting that some job classifications in the
firm are ambiguous under the law for purposes of coverage, said it
looks for a clear distinction on its own and tries to apply its
determinations in a consistent manner.  Managers at firms also
expressed concerns about ambiguity related to employee safety and
health requirements as interpreted by enforcement personnel. 
Managers we talked to believed that the "shifting sands" of
enforcement personnel's interpretations of regulations made
compliance more difficult.  One plant manager said it seems that no
matter how careful a company is in trying to meet Cal/OSHA
requirements, Cal/OSHA inspectors will eventually write them up for
some violation.  A human resource manager at another firm said she
believes that when Cal/OSHA inspects a firm, it always finds
something wrong.  A representative at another firm said unhappy
employees have filed anonymous complaints with Cal/OSHA because they
have learned that Cal/OSHA always finds something wrong if it
inspects the plant.\12


--------------------
\12 This is consistent with our earlier work in which we found that
corporate managers complained of a "gotcha" mentality on the part of
government compliance officers.  See Workplace Regulation: 
Information on Selected Employer and Union Experiences
(GAO/HEHS-94-138, June 30, 1994). 


      FIRMS EXPRESSED SOME
      CONCERNS ABOUT STATE LAWS
---------------------------------------------------------- Letter :5.4

Some areas of concern were related to state laws only.  One area that
firms particularly expressed concern about was workers' compensation
for injuries.  While employers acknowledged that employees should
receive compensation for workplace injuries, employers believed that
some employees take advantage of the system and abuse the benefit. 
One manager commented that the state workers' compensation insurance
board makes determinations in employees' favor more often than it
should.  She commented that some employees take advantage of the
system and abuse the benefit; when they know they can qualify for
workers' compensation, she said, they will do anything to stay out of
work, including having unethical medical practitioners falsify
medical reports.  She noted that this is frustrating because
employers can do little to control costs.  Another employer expressed
frustration with the workers' compensation program because it covers
injuries related to medical conditions that existed before employment
with the firm. 


      COMPANIES IDENTIFIED SOME
      AREAS IN WHICH REGULATION
      WAS BENEFICIAL
---------------------------------------------------------- Letter :5.5

Although the firms' managers had many specific concerns about
regulations affecting human resources, they also cited some areas in
which they believed regulations had helped to improve the workplace. 
Several firms had concerns about the health and safety requirements,
as discussed earlier, but commented that compliance with them had
improved health and safety conditions in the workplace.  For example,
one manager said that the ready availability of the material safety
data sheets required by Cal/OSHA facilitated the identification of a
chemical that was irritating an employee's eye and enabled the
employee to obtain treatment.  Another mentioned that when his firm
used safety committees to assess compliance with safety standards,
the accident rate was half the rate experienced when the committee
did not meet.  He also noted that, after being charged with a
Cal/OSHA violation, the company would respond and correct the problem
within a day or two, thereby improving workplace safety, where
previously the company had refused to take action.  A manager from a
relatively new firm explained that a Cal/OSHA consultant had visited
the firm's plant and explained the requirements it was expected to
meet.  As a result, it set up systems and procedures, such as an
injury and illness program, that improved workplace safety. 
Similarly, because firms are required to provide workers'
compensation, a firm manager said that representatives from the
insurance company inspect the plant and assess how safety conditions
can be improved.  Regarding unemployment insurance, one manager
complimented California's workshare program, which allows an employee
to receive partial unemployment benefits when the employee's work
hours have been reduced.  This program allows the company to retain
an employee for a part-time schedule whereas, without it, the company
would have lost the employee.  The manager believed that retaining
the employee resulted in benefits that outweighed unemployment
insurance costs. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :6

We requested comments on a draft of this report from Labor, EPA, IRS,
and SBA.  Labor, EPA, and IRS provided technical comments to improve
the clarity and accuracy of certain information.  We have
incorporated those suggestions into the report as appropriate.  SBA
responded that it had no comments. 


---------------------------------------------------------- Letter :6.1

As arranged with your office, unless you publicly announce its
contents earlier, we plan no further distribution of this report
until 10 days from its issue date.  At that time, we will send copies
of this report to the Secretary of Labor, the Administrator of the
Environmental Protection Agency, the Commissioner of the Internal
Revenue Service, and the Administrator of the Small Business
Administration.  We will make copies available to others on request. 

Please contact me on (202) 512-7014 if you or your staff have any
questions.  This report was prepared under the direction of Charles
A.  Jeszeck, Assistant Director.  Other major contributors to this
report are listed in appendix V. 

Sincerely yours,

Carlotta C.  Joyner
Director, Education and
 Employment Issues


SCOPE AND METHODOLOGY
=========================================================== Appendix I

To address the objectives of this review, we identified the legal
provisions of federal and California state laws that we believed to
be significant to the operations of California manufacturing firms,
including employment, tax, and environmental issues.  Also as agreed
with the requester's office, we excluded local laws and requirements
from our analysis, although we recognize that they can also affect
firms.  To help identify the relevant laws, we spoke with officials
at several federal agencies, including the Small Business
Administration (SBA), Department of Labor, Environmental Protection
Agency (EPA), and Treasury's Internal Revenue Service (IRS).  We also
spoke with officials at several California state agencies, including
the California Franchise Tax Board, California Department of Fair
Employment and Housing, California Department of Industrial
Relations, California Trade and Commerce Agency, and California
Environmental Protection Agency.  To verify the accuracy of our
presentation, a draft of this report was reviewed for technical
accuracy by staff at Labor, EPA, IRS, SBA, and selected state
agencies.  Because individual laws are of varying lengths and detail,
are codified, and are sometimes amended or replaced, we did not
attempt to provide exact counts of laws that affect companies.  In
addition to speaking with federal and state agencies to identify
laws, we also spoke with them about their efforts to inform
businesses of their legal responsibilities, and we reviewed their
publications and electronic information sources, such as web sites. 

We also visited seven firms to determine the implications laws have
for their human resource operations.  With the help of trade
associations and business advocacy agencies, we selected firms in two
leading manufacturing industries in California--aerospace and
electronics--and chose firms with an array of different
characteristics, as shown in table I.1.  We note the important
limitations of this information.  First, these firms are not
necessarily representative of other employers in these industries,
either in California or the nation.  Second, individual firms'
performance and the vibrant California and national economies may
have affected the responses we received.  For example, laws and
regulations related to layoffs, health insurance coverage for
separated employees, and unemployment insurance probably have less
impact on firms in this environment, whereas requirements concerning
the hiring of foreign workers probably have more impact.  However,
the firms did provide us a snapshot of strategies that firms of
various sizes currently use to comply with these legal requirements. 



                                        Table I.1
                         
                             Characteristics of Firms Visited

                                                            Number of employers
                                                   --------------------------------------
                                                                                 More
                                          Primary            11 to     101 to    than
Firm      Industry      Product        SIC code\a  1 to 10   100       1,000     1,000
--------  ------------  -------------  ----------  --------  --------  --------  --------
1         Electronics   Printed              3672  X
                        circuit
                        boards

2         Electronics   Printed              3672            X
                        circuit
                        boards

3         Electronics   Printed              3672                      X
                        circuit
                        boards

4         Electronics   Integrated           3674                                X
                        circuits and
                        discrete
                        semiconductor
                        s

5         Aerospace     Aircraft             3721            X

6         Aerospace     Parts for            3728                      X
                        aircraft

7         Aerospace     Aircraft             3721                      X
-----------------------------------------------------------------------------------------
\a The standard industrial classification (SIC) code indicates a
firm's primary business operation.  See Executive Office of the
President, Office of Management and Budget, Standard Industrial
Classification Manual 1987 (Washington, D.C.:  OMB, 1987). 


LABOR LAW REQUIREMENTS FOR
CALIFORNIA MANUFACTURING FIRMS
========================================================== Appendix II

To create these tables, we reviewed various materials related to the
statutes noted herein.  The resulting list of "requirements" includes
descriptions of significant provisions of these statutes but is not
an exhaustive list of the provisions. 


      WAGE-HOUR LAWS
------------------------------------------------------ Appendix II:0.1

The Fair Labor Standards Act (FLSA) (29 U.S.C.  201 et seq.),
Walsh-Healey Act (41 U.S.C.  35 et seq.), and Contract Work Hours and
Safety Standards Act (40 U.S.C.  327 et seq.) establish the minimum
wage rate to be paid to employees, the standards of overtime
compensation, and restrictions on the use of child labor. 

Size limitations:  None; these laws apply to all employers engaged in
interstate commerce or the production of goods for interstate
commerce. 

Comparable state law:  The California Labor Code, Industrial Wage
Order No.  1-98, applies to the extent that it is stricter than the
federal law. 



                                        Table II.1
                         
                                      Wage-Hour Laws

                                                               Additional state
General employer duties       Specific federal requirements    requirements
----------------------------  -------------------------------  --------------------------
Employers must pay each       --Employers may pay employees    --California requires
nonexempt employee subject    other than an hourly rate (for   employers to pay a minimum
to FLSA at least (1) the      example, salary, piece rate,     wage of $5.75 per hour.
hourly minimum wage rate set  and so on) as long as the wages  --Employers must provide
by law for all hours worked   paid equal or exceed the         meal periods and rest
in a work week and (2) one    statutory minimum ($5.15 per     periods to employees who
and one-half times the        hour).                           have worked a specified
employee's regular rate of    --Youths under 20 may be paid a  number of hours.
pay for all hours over 40     lower minimum wage of $4.25 per  --Employers must pay
worked in a week.             hour for the first 90 days       learners 18 years and over
                              after hire.                      no less than 85 percent of
                              --Full-time students,            the minimum wage.
                              handicapped workers, learners,
                              apprentices, and messengers may
                              be paid at less than minimum
                              wage if employed in accordance
                              with regulations of the
                              Department of Labor.
                              --For overtime compensation,
                              the "regular rate of pay" is
                              the actual rate of pay received
                              by the employee.
                              --Employers cannot retaliate
                              against an employee who files a
                              complaint under FLSA.

If manufacturing work is      --The "prevailing wage rate"     \a
being conducted for a         under the Walsh-Healey Act has
federal contract of more      for many years been determined
than $10,000, the Walsh-      to be the FLSA statutory
Healey Act requires           minimum wage rate and is the
employers to pay the          wage generally paid to workers
"prevailing wage rate" as     in the same industry in the
determined by the Secretary   same locale.
of Labor, which may be        --The prevailing wage rates are
higher than the FLSA          generally set by geographic
statutory minimum wage rate.  areas.
Even if the federal contract
is not covered by the Walsh-
Healey Act, employers may
have to pay "laborers or
mechanics" the overtime wage
rate under the Contract Work
Hours and Safety Standards
Act, which is one and one-
half times the employee's
base rate of pay.

Employers must comply with    --Children below the age of 16   \a
applicable restrictions in    may not be employed in
the wage-hour laws on the     manufacturing.
use of child labor.           --If a business involves an
                              occupation that the Secretary
                              of Labor has determined to be
                              "hazardous," employers may not
                              hire children below the age of
                              18.

Employers must determine      --According to the "economic     --Administrative,
whether each                  reality" test, an employment     executive, and
worker is subject to the      relationship exists if the       professional employees are
federal wage-hour laws: that  person is dependent on the       defined as either (1)
is, whether there is an       employer's business as a means   employees engaged in work
employment relationship and   of livelihood.                   "primarily intellectual,
whether the employee is not   --Employees employed in a "bona  managerial, or creative
specifically "exempt" under   fide executive, administrative   ... [that] requires
the provisions of the         or professional capacity"        exercise of discretion and
statute.                      ("white collar" employees) are   independent judgment" for
                              exempt from the federal wage-    which pay is at least
                              hour laws.                       $1,150 per month or (2)
                                                               employees in a
                                                               "recognized" profession.

Employers must maintain pay   --All supplemental "payroll"     \a
records for both nonexempt    records, wage-related
and exempt employees and      agreements, and sales records
post notices of the           must be kept for 3 years,
applicable wage-hour laws.    although worker attendance
                              records, such as daily time
                              cards, need only be kept for 2
                              years.
                              --Walsh-Healey requires, in
                              addition to payroll records,
                              records of occupational illness
                              and injury.
-----------------------------------------------------------------------------------------
\a Some additional state requirements may apply. 


      CIVIL RIGHTS--RACE, COLOR,
      RELIGION, SEX, NATIONAL
      ORIGIN, AGE, AND VIETNAM-ERA
      VETERANS' STATUS
------------------------------------------------------ Appendix II:0.2

Title VII of the Civil Rights Act of 1964 (42 U.S.C.  2000e et seq.),
the Equal Pay Act under FLSA (29 U.S.C.  206d), the Age
Discrimination in Employment Act (ADEA) (20 U.S.C.  621 et seq.),
Executive Order 11246, the Immigration and Nationality Act (8 U.S.C. 
1101 et seq.), the Vietnam-Era Veterans' Readjustment Assistance Act
(VEVRAA) (38 U.S.C.  4212 et seq.), and the Uniformed Services'
Employment and Reemployment Rights Act (USERRA) (38 U.S.C.  4301 et
seq.) prohibit discrimination in employment on the basis of race,
color, religion, sex, national origin, age, Vietnam-era veterans'
status, and military service. 

Size limitations:  Title VII applies to employers with 15 or more
employees; the Equal Pay Act applies to all employers; ADEA applies
to employers with 20 or more employees in 20 weeks in the current or
preceding year; Executive Order 11246 and VEVRAA apply to all federal
contractors and subcontractors with a covered contract or subcontract
of $10,000 or more, and provisions requiring affirmative action
programs apply only to federal contractors and subcontractors with a
covered contract or subcontract of $50,000 or more and 50 or more
employees; and USERRA applies to all employers. 

Comparable state law:  The Fair Employment and Housing Act (FEHA)
applies to employers with 5 or more employees, except that provisions
related to sexual harassment apply to all employers.  California
labor code also applies. 



                                        Table II.2
                         
                           Civil Rights--Race, Color, Religion,
                         Sex, National Origin, Age, and Vietnam-
                                   Era Veterans' Status

                                                               Additional state
General employer duties       Specific federal requirements    requirements
----------------------------  -------------------------------  --------------------------
Employers with 15 or more     --Employers cannot treat people  --Antidiscrimination laws
employees cannot              less favorably than others       apply to all California
discriminate in employment    because of race, color,          employers with five or
practices (hiring, firing,    religion, sex, age, or national  more employees and protect
compensation, and so on)      origin.                          against discrimination
against people on the basis   --Employers must not allow       based on sexual
of race, color, religion,     sexual harassment in the         orientation.
sex, or national origin.      workplace.                       --Sexual harassment
Employers with 20 or more     --Under the Equal Pay Act, all   provisions apply to all
employees cannot              employers must pay men and       California employers.
discriminate against people   women equal pay for equal work
on the basis of age.          on jobs requiring equal skill,
Employers of any size may     effort, and responsibility
not discriminate in           unless factors other than
employment practices because  gender (for example, seniority
of past, present, or          or merit) are involved.
intended service in the       --Employers cannot retaliate
uniformed services.           against any employee because
                              the employee filed a charge or
                              participated in an
                              investigation or proceeding
                              under Title VII, USERRA,
                              Executive Order 11246, or
                              VEVRAA.

If an employer has covered    --Employers must post notice of  \a
federal contracts or          employee rights under
subcontracts of $10,000 or    antidiscrimination laws.
more, the employer must take  --Employers must ensure that
affirmative action to ensure  applicants and employees are
equal employment              treated without regard to race,
opportunity.                  color, religion, sex, national
                              origin, or Vietnam-era veteran
                              status in all aspects of
                              employment.
                              --Employers are subject to
                              review by the Department of
                              Labor.

If an employer has a          --Employers must post notice of  \a
nonexempt federal contract    employee rights under
of $50,000 or more and        antidiscrimination laws.
employs 50 or more            --Employers must develop and
employees, the employer must  adopt a written affirmative
establish an affirmative      action program.
action program.               --Employers must update the
                              program annually.
                              --Employers must annually file
                              form 100 (Employer Information
                              Report, EEO-1).

Employers must post notice    --Employers must compile         \--Employers must
of antidiscrimination         statistics of employment         distribute copies of the
minimum wage and maximum      practices and workforce          state information sheet on
hours laws in the workplace,  composition (including job       sexual harassment to all
and employers with 100 or     applicants) by geographic area.  employees.
more employees must file
workforce statistics on form
100 with the Equal
Employment Opportunity
Commission.
-----------------------------------------------------------------------------------------
\a Some additional state requirements may apply. 


      CIVIL RIGHTS--DISABILITIES
------------------------------------------------------ Appendix II:0.3

The Americans With Disabilities Act (ADA) (42 U.S.C.  12101 et seq.);
the Rehabilitation Act, Section 503 (29 U.S.C.  793); VEVRAA (38
U.S.C.  4212 et seq.); and USERRA (38 U.S.C.  4301 et seq.) prohibit
employment discrimination on the basis of disability. 

Size limitations:  ADA applies to businesses with 15 or more
employees for 20 weeks in the current or preceding year; the
Rehabilitation Act, Section 503, and VEVRAA apply to all federal
contractors and subcontractors with a contract or subcontract of
$10,000 or more, and provisions requiring affirmative action programs
apply only to federal contractors with a covered contract or
subcontract of $50,000 or more and 50 or more employees; and USERRA
applies to all employers. 

Comparable state law:  FEHA applies to employers with 5 or more
employees regarding physical disabilities, but coverage of provisions
regarding mental disabilities is restricted to employers with 15 or
more employees. 



                                        Table II.3
                         
                                Civil Rights--Disabilities

                                                               Additional state
General employer duties       Specific federal requirements    requirements
----------------------------  -------------------------------  --------------------------
Employers with 15 or more     --To be protected under federal  --Provisions apply to
employees are prohibited      law, people with disabilities    California employers with
from discriminating in        must have a "physical or mental  5 or more employees,
employment practices          impairment" that "substantially  except for disabilities
(hiring, firing,              limits" one or more "major life  relating to mental
compensation, and so on)      functions."                      impairments, which apply
because of physical or        --To be protected, a person      only to businesses with 15
mental disability (ADA).      with a disability must also      or more employees.
                              have the requisite skill,
                              experience, education, and
                              other related requirements for
                              the job.
                              --Employers cannot require a
                              medical examination until after
                              a job offer has been made, but
                              the job offer can be contingent
                              on passing a medical
                              examination, which must be
                              required of all applicants for
                              a job, not just the applicant
                              with a disability.
                              --Employers must post notice of
                              employee rights under
                              antidiscrimination laws.
                              --Employers cannot retaliate
                              against any employee because
                              the employee filed a charge or
                              participated in an
                              investigation or proceeding
                              under ADA.

Employers must provide        --Employers may have to modify   \a
"reasonable accommodation"    or adjust workplace or work
to enable applicants and      practices to enable a person
employees with disabilities   with a disability to do the
who are "otherwise            job.
qualified" to perform the     --In the case of an employee
job unless to do so would     returning to a job disabled as
cause "undue hardship."       a result of military service,
                              the employer must assign the
                              employee to an "equivalent"
                              position if the disability
                              prevents the employee from
                              performing his or her old job.
                              If, with reasonable
                              accommodation, the employee
                              cannot perform in an equivalent
                              position, the employer must
                              place the employee in a
                              position with the nearest
                              approximation of status and
                              pay, with full seniority
                              (USERRA).

If the employer has a         --Employers are subject to       \a
covered federal contract or   review by the Department of
subcontract of $10,000 or     Labor.
more, the employer must take  --Employers must maintain
affirmative action to hire    records for 1 year on
qualified individuals with    complaints received and action
disabilities and Vietnam-     taken under the law.
era veterans under the        --Employers must report
Rehabilitation Act, Section   annually to the Department of
503, and VEVRAA.              Labor on the number of
                              employees who are veterans and
                              "special disabled veterans."
                              --Employers must invite
                              employees and job applicants to
                              identify whether they believe
                              themselves to be covered by
                              VEVRAA or the Rehabilitation
                              Act, Section 503.

If the employer has 50 or     --The affirmative action         \a
more employees, and a         program shall be available for
covered federal contract or   inspection to any employee or
subcontract of $50,000 or     applicant upon request.
more, the employer must       --Employers must post notice at
establish a written           each facility the location of
affirmative action program    the affirmative action program
for special disabled          and the hours during which a
veterans, individuals with    copy of the program may be
disabilities, and Vietnam-    obtained.
era veterans.
-----------------------------------------------------------------------------------------
\a Some additional state requirements may apply. 


      LABOR RELATIONS
------------------------------------------------------ Appendix II:0.4

The National Labor Relations Act (NLRA) (29 U.S.C.  151 et seq.) and
the Labor-Management Reporting and Disclosure Act (29 U.S.C.  401 et
seq.) create the framework for the relationship among employer,
employees, and labor unions, providing employees with the right to
organize and bargain collectively through representation of their own
choice. 

Size limitations:  None; these laws apply to all employers. 

Comparable state law:  None; the NLRA preempts state regulation of
labor-management relations. 



                                        Table II.4
                         
                                     Labor Relations

General employer duties                 Specific requirements (federal only)
--------------------------------------  -------------------------------------------------
Employers cannot interfere with         --Employees have the right to organize, bargain
employees in the exercise of their      collectively, and engage in collective
rights guaranteed by the NLRA.          activities.
                                        --Employers cannot discriminate against any
                                        employee because of activities protected by the
                                        NLRA.
                                        --If an employer violates any of the guarantees
                                        under the NLRA, employees may complain about an
                                        "unfair labor practice" to the National Labor
                                        Relations Board.

Employers must bargain in good faith    --Employees may select, by secret ballot, a labor
with the union selected by employees.   organization to act as their exclusive
                                        representative for the purpose of collective
                                        bargaining.

Employers are prohibited from forming   --Employers must restrict jurisdiction of
a "company union" to deal with labor    management-employee committees to activities not
disputes and work conditions.           covered by the NLRA.

Employers must disclose certain         --The report to the Secretary of Labor must
payments or dealings with employees,    include the terms and conditions of such
unions, union officers, and labor       payment.
relations consultants, and any          --Any person who is engaged by the employer to
expenditures to interfere with or       persuade employees not to organize or to supply
restrain union activity, to the         information about union activities must also
Secretary of Labor under the Labor-     report to the Secretary of Labor.
Management Reporting and Disclosure
Act .
-----------------------------------------------------------------------------------------

      PENSION BENEFITS
------------------------------------------------------ Appendix II:0.5

The Employee Retirement Income Security Act (ERISA) (29 U.S.C.  1001
et seq.) requires employers that maintain pension plans for their
employees to generally ensure that rights in such plans are equitably
offered to their employees, that funds held for such purposes are
adequately protected, and that employees are fully informed about the
status of these funds. 

Size limitations:  None; ERISA applies to all employers with pension
plans; however, there are reduced reporting requirements for certain
pension plans with fewer than 100 participants. 

Comparable state law:  None; ERISA preempts state regulation of
pension plans. 



                                        Table II.5
                         
                                     Pension Benefits

General employer duties                 Specific requirements (federal only)
--------------------------------------  -------------------------------------------------
Employers offering pension plans must   --Employers may set up various types of plans,
allow employees to participate in       generally classified as either "defined benefit"
pension plans in accordance with ERISA  or "defined contribution" plans.
requirements.                           --All employees who have reached a specified
                                        minimum age and completed a minimum amount of
                                        service with the employer must be eligible to
                                        participate.
                                        --Pension plans cannot discriminate in favor of
                                        an employer's more highly paid employees.

Employers must give employees           --Employers generally must follow one of three
nonforfeitable (vested) rights in       vesting schedules set out in ERISA.
pension plans in accordance with ERISA  --Once fully vested, employees must be guaranteed
requirements.                           a percentage of benefits even if they leave their
                                        job before retirement.

Employers must fund defined benefit     --Employers must fund annually all benefits
pension plans annually to meet the      earned in a defined benefit plan that year by
minimum standards set forth in ERISA.   employees and pay installments on the cost of
                                        benefit increases not previously funded.
                                        --Employers who do not meet minimum funding
                                        standards must pay an excise tax or obtain a
                                        waiver from the Secretary of the Treasury.

Employers must ensure that people who   --Pension plans must be established under a
manage pension plans do so in a         written plan, with a named fiduciary.
prudent manner, solely for the benefit  --People handling funds must be bonded for
of the participants and beneficiaries.  protection against fraud or dishonesty.
                                        --Certain types of transactions are specifically
                                        prohibited.

Employers must report detailed          --Form 5500 must be filed with the IRS annually,
financial data to the Department of     setting out assets and liabilities, income and
the Treasury and disclose to employees  expenses, as well as numerous other data.
understandable data on the financing    --Pension plans with fewer than 100 participants
and operation of the pension plans.     may have reduced reporting requirements.
                                        --Other reports must be filed to federal agencies
                                        when specified events occur, such as failure to
                                        meet minimum funding standards or bankruptcy.
                                        --Summaries of annual financial reports and
                                        notification of major modifications to the plan
                                        must be provided to all employee participants.
                                        --Plan administrators must retain records that
                                        verify, explain, or clarify reported information
                                        for 6 years.
-----------------------------------------------------------------------------------------
Note:  In general, the description of duties and requirements is
related to employer-provided plans for which a tax benefit is
claimed, either by the employer or the employee. 


      HEALTH INSURANCE BENEFITS
------------------------------------------------------ Appendix II:0.6

The Health Insurance Portability and Accountability Act (HIPAA), the
Newborns' and Mothers' Health Protection Act (NMHPA), the Mental
Health Parity Act (MHPA), USERRA, and the Consolidated Omnibus Budget
Reconciliation Act (COBRA) require that employers providing employees
with group health plans (both insured and self-insured) must comply
with federal requirements on health coverage. 

Size limitations:  HIPAA and NMHPA apply to employers with 2 or more
employees; COBRA provisions apply to employers with 20 or more
employees; and MHPA provisions apply to employers with over 50
employees. 

Comparable state law:  HIPAA permits state insurance law to vary from
federal law only in certain enumerated ways for certain requirements,
and only as long as it does not prevent the application of federal
law for other requirements.  NMHPA permits state insurance law to
supersede federal law if state law contains certain specified
requirements. 



                                        Table II.6
                         
                                Health Insurance Benefits

General employer duties                 Specific requirements (federal only)
--------------------------------------  -------------------------------------------------
Any employer electing to sponsor a      --An employer's group health plan may include a
group health plan covering two or more  period of up to 12 months for a regular enrollee,
employees must limit the effects of a   or 18 months for a late enrollee, during which
"preexisting condition" exclusion for   there is restricted coverage of a participant's
employees, spouses, and dependents and  or beneficiary's preexisting medical condition.
cannot discriminate against employees,  --An employer's group health plan must reduce an
spouses, and dependents because of      individual's preexisting condition exclusion
health status and related factors       period by the number of days of "credible
(HIPAA).                                coverage" (generally, prior health coverage
                                        without a break in coverage of 63 days or more).
                                        --An employer's group health plan may not exclude
                                        individuals from coverage under the terms of the
                                        plan or charge an individual more for benefits
                                        offered by the plan (that is, discriminate on the
                                        basis of specific factors related to health
                                        status).

If an employer has two or more          \a
employees who are participating in a
group health plan that provides
coverage for childbirth, the plan must
provide for a hospital stay for the
mother and child of not less than 48
hours following a normal vaginal
delivery and not less than 96 hours
following a cesarean section (NMHPA).

If an employer has over 50 employees    \a
and has a group health plan that
provides both medical/surgical and
mental health benefits, any aggregate
lifetime or annual dollar limits on
benefits for mental health services
may not be lower than any such limits
for medical/surgical benefits unless
changing the dollar limits would
increase costs for the plan by 1
percent or more (MHPA).

All employers must offer continued      \a
group health coverage to employees and
qualified beneficiaries after
employees leave to perform military
service (USERRA).

Employers with 20 or more employees     --Employers must give notice of COBRA rights to
and a group health plan must offer      an employee and other qualified beneficiaries at
continued group health coverage to      the time coverage begins and after a "qualifying
employees and their spouses and         event," such as termination of job, death, or
dependents after a qualifying event     divorce.
(job termination, employer bankruptcy,  --Employees and qualified beneficiaries have 60
divorce, death, reduced hours, and so   days to elect continued health coverage from the
on) unless terminated for "gross        date they will lose coverage or the date of
misconduct" (COBRA).                    notice, whichever is later.
                                        --COBRA coverage must be available for a child
                                        born to, or adopted by, a former employee covered
                                        by COBRA during the COBRA coverage period.
-----------------------------------------------------------------------------------------
\a Specific requirements are the same as general employer duties. 


      EMPLOYEE LEAVE BENEFITS
------------------------------------------------------ Appendix II:0.7

The Family and Medical Leave Act (FMLA) (29 U.S.C.  2601 et seq.)
requires covered employers to allow employees to take leave for birth
or adoption of a child, or a serious health condition of the employee
or the employee's immediate family. 

Size limitations:  FMLA applies to employers with 50 or more
employees on the payroll for 20 calendar weeks in the current or
previous year. 

Comparable state law:  The California Family Rights Act (CFRA) and
FEHA, which include additional provisions for pregnancy disability
leave for all employers with five or more employees, apply. 



                                        Table II.7
                         
                                 Employee Leave Benefits

                                                               Additional state
General employer duties       Specific federal requirements    requirements
----------------------------  -------------------------------  --------------------------
Employers with 50 or more     --To be eligible, employees      --California includes the
employees must allow          must have been employed with     same size limitations on
eligible employees to take    the business for at least 1      its family leave
up to 12 weeks' unpaid leave  year, with at least 1,250 hours  provisions under CFRA;
each year for medical or      of service in the prior year.    however California, also
family-related reasons.       --Leave can be taken for the     provides that employers
                              adoption or birth of a child by  with five or more
                              either husband or wife.          employees must allow
                              --Leave can be taken for the     female employees up to 4
                              care of the serious health       months for pregnancy
                              condition of the employee's      disability leave.
                              spouse, child, or parent or for  --An eligible employee can
                              the employee's own serious       take up to 4 months for
                              health condition.                pregnancy disability leave
                              --Leave may be taken             and can also take
                              intermittently, on a reduced     additional leave under
                              schedule basis, all at once, or  CFRA to "bond" with the
                              in full-day increments.          child (or for whatever
                                                               health or family reason
                                                               allowed under CFRA).

At the employee's or          --Employees may choose to        \a
employer's option, certain    substitute accrued paid leave
types of paid leave may be    for unpaid FMLA leave, or an
substituted for unpaid leave  employer may require the
during the employee's         employee to substitute accrued
absence, and the employer     paid leave for the FMLA
must continue the employee's  leave.(29 U.S.C. 2612
coverage in group health      (d)(2)(A))
insurance.                    --Employers must maintain an
                              employee's coverage under a
                              group health plan at the same
                              level as would have been
                              provided had the employee
                              remained at work.

Employers must reinstate all  --Reinstatement is generally     --If a female employee
the employees taking such     required to be to the same or    takes leave for pregnancy
leave unless the employee's   equivalent position, unless the  disability, the employer
job is eliminated or the      employee's job is eliminated     must reinstate her to her
employee is determined to be  and the employer can prove that  same or a comparable
"key" to the operations of    the job would have been          position with the same
the business.                 eliminated whether or not the    seniority and benefits as
                              employee had taken FMLA leave.   when leave began, unless
                              --"Key" employees are those who  employment would have
                              are salaried, in the top 10      ceased during the
                              percent of pay at the business,  disability period.
                              and whose job restoration would
                              cause "substantial and grievous
                              economic injury" to the
                              business.

Employers must keep records   --In addition to posting notice  \a
of FMLA leave and must post   of FMLA, employers must provide
notice of employee rights     a general notice to all
under FMLA.                   employees of rights and
                              obligations under FMLA.
                              --In the event an employee
                              needs to take FMLA leave, the
                              employer must provide specific
                              notice to the employee of FMLA
                              rights and obligations within 2
                              days after the employer learns
                              of the need for leave.
                              --Pay records must distinguish
                              FMLA leave and non-FMLA leave.
                              --Records should include
                              notices provided to the
                              employee, and records of any
                              disputes.
                              --Records must be maintained
                              for 3 years.
-----------------------------------------------------------------------------------------
\a Some additional state requirements may apply. 


      DISABILITY BENEFITS
------------------------------------------------------ Appendix II:0.8

California Disability Insurance and California Workers' Compensation
require employers to collect employees' contributions to the state
disability insurance fund (for use of disabled workers not receiving
unemployment insurance or workers' compensation) and to compensate
workers in part for the loss of pay because of a workplace injury or
sickness. 

Size limitations:  None; these requirements apply to all employers
paying over $100 in wages in a calendar year.  Independent
contractors are not covered by workers' compensation laws. 



                                        Table II.8
                         
                                   Disability Benefits

                                                               California workers'
General employer duties       California disability insurance  compensation
----------------------------  -------------------------------  --------------------------
Employers with workers        --All workers considered         \a
considered to be employees    employees for purposes of
under the California law      unemployment insurance must
must collect employee         contribute to disability
contributions to disability   insurance.
insurance.

Employers contribute toward   --Employees must pay 1.0         \a
disability insurance on the   percent on the first $31,767 of
basis of wages recognized     wages paid by the employer.
for this purpose by state     --All compensation that is
law.                          considered wages for purposes
                              of unemployment insurance is
                              also considered wages for
                              disability insurance, unless
                              specifically exempted.

Employers must maintain       \a                               --Insurance rates can vary
insurance to pay workers'                                      with the employer's safety
compensation for workplace                                     and accident record.
injuries.                                                      --Employers can challenge
                                                               the eligibility of
                                                               claimants for workers'
                                                               compensation in a hearing
                                                               before a state agency.

Certain employers must make   \a                               --Employers with the worst
an annual payment to the                                       state safety records must
California Workers'                                            make an annual payment to
Compensation Employers                                         the state fund.
Assessment.

Employers must notify         --Employers must give new        --Employers must provide
employees of rights to        employees and employees leaving  injured workers with a
disability insurance and      work because of pregnancy or     California form notifying
workers' compensation.        nonoccupational sickness or      injured workers of their
                              injury a notice of their rights  rights under the workers'
                              under the disability law.        compensation program.
                              --Employers must post notices    --Employers must post
                              of employees' rights to          notice of employees'
                              disability insurance benefits.   rights to workers'
                                                               compensation for job-
                                                               related injuries.

Employers must make deposits  --Worker contributions are       \a
and file reports quarterly.   deposited with income taxes
                              withheld, and reported on the
                              same form required for
                              unemployment insurance.
-----------------------------------------------------------------------------------------
\a Not applicable. 


      WORKPLACE SAFETY STANDARDS
------------------------------------------------------ Appendix II:0.9

The Occupational Safety and Health Act (29 U.S.C.  651 et seq.)
requires employers to keep the place of employment free from
recognized hazards that could cause death or serious physical harm to
employees and to comply with workplace safety standards established
by the Department of Labor. 

Size limitations:  None; the act applies to all employers.  However,
employers with 10 or fewer employees have reduced record-keeping
requirements and are exempt from programmed inspection if in a
low-hazard industry. 

Comparable state law:  The California Occupational Safety and Health
Act applies to all California employers but reduces some
record-keeping requirements for employers with 20 or fewer employees. 



                                        Table II.9
                         
                                Workplace Safety Standards

                                                               Additional state
General employer duties       Specific federal requirements    requirements
----------------------------  -------------------------------  --------------------------
All employers must comply     --Employers must follow          --California has its own
with general workplace        Occupational Safety and Health   set of standards
safety standards including,   Administration (OSHA)            comparable to the federal
for example, standards        instructions on how to keep      requirements. In addition,
requiring safe walkways,      work areas safe.                 California has state-
floors, and ventilation.      --Employers must provide         specific requirements.
                              adequate supervision of
                              employees.
                              --Depending on the particular
                              standard, employers may also
                              have to provide employee safety
                              training and education and
                              adopt prescribed safety
                              procedures or modify machinery
                              to include safety devices.

Employers using hazardous     --Employers must conduct         --California has its own
substances (in an amount      periodic tests to determine the  standards comparable to
over thresholds specified by  presence and concentration of    the federal requirements.
regulation) or whose          hazardous substances.            Specific requirements may
workplace presents high-      --Employers must develop safe    differ.
risk situations (for          operating procedures and an
example, confined spaces      emergency response plan.
with oxygen-deficient         --Employees must be trained in
atmosphere) must protect      safe operating procedures.
employees from exposure to    --Employers must develop a
health hazards.               "hazardous communication
                              program"--that is, prepare
                              "material safety data sheets"
                              identifying the nature of the
                              health hazard and notifying
                              employees of hazards associated
                              with substances.
                              --All health hazard emergencies
                              must be reported to OSHA.
                              --Depending on the particular
                              standard, the employer may also
                              have to provide periodic
                              medical examinations for each
                              employee and
                              obtain special work permits.

Employers must maintain       --Employers with 10 or fewer     --Employers must
records on safety at the      employees have reduced record-   establish, implement, and
workplace, post notice of     keeping requirements.            maintain a written injury
the protection due to         --Employers in low-hazard        and illness prevention
employees under OSHA, and     industries with 10 or fewer      program with certain
report certain serious        employees are exempt from        specified sets of
injuries to OSHA.             programmed safety inspections.   records.
                              --Employers must keep a          --Employers with 10 or
                              continuing log of occupational   fewer employees and
                              injuries and illnesses (on OSHA  employers with 20 or fewer
                              form 200).                       employees that have a good
                              --Employers must maintain        safety program have
                              records on employee exposure to  reduced record-keeping
                              hazards.                         requirements.
                              --Employers must maintain
                              environmental monitoring logs
                              and "material safety data
                              sheets."
                              --Employers must report any
                              job-related fatality or
                              accident requiring the
                              hospitalization of three or
                              more employees to OSHA within 8
                              hours of occurrence.
                              --Employers in high-hazard
                              industries with more than 60
                              employees must submit illness
                              and injury data to OSHA's
                              annual survey.
-----------------------------------------------------------------------------------------
Note:  Under the Occupational Safety and Health Act, a state like
California, with an OSHA-approved state plan, may enforce its own
regulations if they are at least as effective as the federal
regulations.  California has established its own occupational health
and safety program (Cal-OHSA) and therefore operates its program
under state regulation.  Even though in California only state law is
enforced, we have set forth the minimum federal requirements. 


      HIRING/TERMINATION
----------------------------------------------------- Appendix II:0.10

The Immigration and Nationality Act (8 U.S.C.  1101 et seq.),
Employee Polygraph Protection Act (29 U.S.C.  2001 et seq.), USERRA
(38 U.S.C.  4301 et seq.), Drug Free Workplace Act (41 U.S.C.  701 et
seq.), Personal Responsibility and Work Opportunities Act (42 U.S.C. 
654), and Workers' Adjustment and Retraining Notification Act (WARN)
(29 U.S.C.  2101 et seq.) regulate employers when hiring new workers
and provide rights to certain workers with respect to job
termination. 

Size limitations:  WARN applies to employers of 100 or more
employees. 

Comparable state law:  The relevant California Labor Code provisions
apply, as well as a provision requiring employers with 25 or more
employees to allow employee participation in a drug or alcohol
rehabilitation program. 



                                       Table II.10
                         
                                    Hiring/Termination

                                                               Additional state
General employer duties       Specific federal requirements    requirements
----------------------------  -------------------------------  --------------------------
Requires all employers to     --Employers must ensure that     \\a
hire only those people who    employees fill out form I-9,
may legally work in the       with evidence of identity and
United States (that is,       employment eligibility.
citizens and nationals of     --Employers must physically
the United States and aliens  examine documentation and
authorized to work in the     complete form I-9.
United States) (Immigration   --Employers must retain forms
and Nationality Act).         I-9 for 3 years.

To hire foreign workers in    --Employers must pay the         \a
certain specialized           foreign worker wages as least
professions to work in the    as high as they pay a U.S.
United States, employers      citizen performing the same
must meet the requirements    type job in the same area.
of the H-1B temporary worker  --The foreign worker must
program.                      qualify as a member of a
                              "specialized occupation" not
                              only on the basis of academic
                              degree but also by license,
                              experience, or training.

Employers may not use         --All employers must post        --Employers may not
polygraphs to screen job      notice of protection against     discharge or retaliate
applicants or during the      the use of the polygraph test.   against an employee for
course of employment, except  --If employers use polygraph     refusing to take a
in certain circumstances,     tests, the employers must        polygraph test.
such as those related to      maintain records of such tests
national security (Employee   for 3 years.
Polygraph Protection Act).

All employers must provide    --Employers must reinstate       \a
reemployment to employees     uniformed service members who
who leave their jobs to       report back to their jobs in a
serve in the "uniformed       timely manner to a position of
services" (USERRA).           like seniority, status, and
                              pay.
                              --Employers must guarantee
                              reinstated uniformed service
                              members pension plan benefits
                              accruing during military
                              service.
                              --Employers must continue to
                              provide health benefits for
                              uniformed service members and
                              their families for up to 18
                              months during military service.

If an employer works on       --Employers must publish a       --Employers with 25 or
federal contracts of over     notice to employees that drugs   more employees must
$25,000, the employer must    are prohibited in the workplace  accommodate any employee
maintain a drug-free          and that action will be taken    who wants to participate
workplace (Drug Free          against employees who violate    in a drug or alcohol
Workplace Act).               the prohibition.                 rehabilitation program.
                              --Employers must offer drug-     --Employers must make
                              free awareness programs to       reasonable efforts to
                              employees.                       safeguard the privacy of
                              --Employers must notify the      an employee who has
                              federal agency with which they   enrolled in a
                              are contracting of an            rehabilitation program.
                              employee's drug conviction
                              within 10 days of learning of
                              such conviction.

Employers must report         --After October 1, 1998,         \a
information on newly hired    employers must submit
personnel to a designated     information to the responsible
state agency for the          state agency within 20 days
purposes of enforcing child   after hiring a new employee.
support agreements (Personal
Responsibility and Work
Opportunities Act).

Employers of 100 or more      --Employers must provide notice  \a
employees must provide 60     in writing to employees or
days' notice to employees of  their union representative and
a plant closing or mass       to local and state authorities.
layoff (WARN).
-----------------------------------------------------------------------------------------
\a Some additional state requirements may apply. 


TAX LAW REQUIREMENTS FOR
CALIFORNIA MANUFACTURING FIRMS
========================================================= Appendix III

The tax law requirements compiled in these tables are summaries of
significant provisions in the federal Internal Revenue Code and the
California Revenue and Taxation Code.  As with other legal
requirements outlined in this report, this is not an exhaustive list
of tax provisions. 


      INCOME TAX WITHHOLDING
----------------------------------------------------- Appendix III:0.1

The federal tax code requires employers to withhold a portion of
employees' wages and remit the withheld portion to federal
authorities as payment toward the employees' income taxes. 

Size limitations:  None.  All employers are liable for withholding
taxes of employees; however, there are less frequent deposit and
filing requirements for employers with smaller payrolls. 

Comparable state laws:  State income tax code. 



                                       Table III.1
                         
                                  Income Tax Withholding

                                                               State income tax
General employer duties       Federal income tax withholding   withholding
----------------------------  -------------------------------  --------------------------
Employers must withhold       --If the worker is an            --If a worker is an
appropriate amounts if the    "employee" under the common law  employee under common law,
worker is an "employee," not  test or meets other              the employer must withhold
an "independent contractor."  requirements of the Internal     state income taxes unless
                              Revenue Code, the employer must  the state tax code
                              withhold federal income taxes.   provisions specifically
                              --Even if the worker is an       exempt the worker from
                              "employee," income taxes may     this requirement.
                              not have to be withheld if       --Specific state tax code
                              there is a "safe harbor" (that   provisions might require
                              is, industry practice treats     the employer to withhold
                              the worker as an independent     state income tax even if
                              contractor) and if the worker    the worker is not a common
                              meets the other requirements of  law employee.
                              section 530 of the Revenue Act   --There are no "safe
                              of 1978.                         harbor" provisions
                              --Specific federal tax code      recognized for the
                              provisions might exempt certain  purposes of California
                              workers from withholding         income tax withholding.
                              requirements.

Employers must withhold tax   --There is no withholding for    --All compensation for
from payments subject to the  payments specifically exempt     work done is included in
income tax.                   from federal income tax (such    wages for the purposes of
                              as nontaxable fringe benefits    state income tax
                              and qualified moving             withholding unless the
                              expenses).                       employee is specifically
                              --There is no withholding if     exempt by state law.
                              the employee files form W-4
                              validly claiming an exemption
                              from withholding.

Employers must properly       --Employers must withhold each   --Employers must withhold
calculate withholding         pay period.                      each pay period.
amounts.                      --Employers must refer to the    --Employees can use either
                              employee statement of filing     federal W-4 or state DE-4
                              status on form W-4; if there is  to identify filing status;
                              no W-4, the employee is treated  if no form is filed, the
                              as if single with no             employee is treated as if
                              dependents.                      single with no
                              --Employers must calculate the   dependents.
                              tax in a method approved by      --For California income
                              IRS--either by "wage bracket"    tax withholding, the
                              tables, by percentage, or by     employer can use only one
                              another approved method.         of two methods: either the
                                                               wage bracket tables or
                                                               exact calculation.

Employers must remit          --Employers accumulating         --For California income
withheld taxes.               withheld income tax and Social   tax withholding, all
                              Security and Medicare taxes      employers collecting more
                              greater than $1,000 in a         than $400 a month in state
                              calendar quarter must remit      income taxes must remit
                              withheld taxes periodically      the taxes on the same
                              with a form 8109; if employers   schedule required for
                              withhold $50,000 or less during  federal withholding;
                              a 1-year period, they must       withheld taxes are
                              deposit monthly; if over         deposited with a state
                              $50,000, they must deposit       form DE-88.
                              semiweekly; if employers
                              accumulate over $100,000 in 1
                              day, that amount must be
                              deposited by the close of the
                              next banking day.
                              --Employers accumulating less
                              than $1,000 in a calendar
                              quarter must remit withheld
                              taxes quarterly, with a form
                              941.
                              --Employers that deposited over
                              $50,000 in withheld federal
                              income taxes and Social
                              Security and Medicare taxes in
                              1996 must make electronic
                              deposits of all federal
                              depository taxes in 1998 and
                              thereafter.

Employers must report on      --Quarterly, employers must      --Quarterly, employers
amounts withheld and          report on amounts withheld,      must report on amounts of
deposited.                    filing a form 941 with IRS.      state income tax withheld
                              --Annually, employers must file  and wages paid, filing
                              a form W-3 with the Social       state form DE-6.
                              Security Administration,         --Annually, all employers
                              reporting on total wages paid    must file state form DE-
                              and taxes withheld during the    7, reconciling the total
                              year, along with copies of       tax amounts withheld
                              employees' forms W-2; in         during the year.
                              addition, employers must send    --Employers with more than
                              each employee a copy of form W-  250 employees must use
                              2.                               magnetic media to file
                              --Employers submitting over 250  quarterly wage report DE-
                              forms W-2 must file on magnetic  6.
                              media.

Employers must report         --Annually, employers must file  --For each worker named in
payments made to workers      an information return, a form    a federal information
classified as "independent    1099, with the IRS showing       return, an employer must
contractors."                 payments to independent          provide an annual written
                              contractors who received more    statement showing the
                              than $600.                       employer's name, address,
                                                               and identification number
                                                               and the amount paid to the
                                                               worker.
-----------------------------------------------------------------------------------------

      SOCIAL SECURITY AND MEDICARE
      TAXES
----------------------------------------------------- Appendix III:0.2

The Federal Insurance Contributions Act (FICA) requires employers
both to withhold the employee's share and to pay the employer's share
of Social Security and Medicare taxes. 

Size limitations:  None. 

Comparable state law:  None. 



                        Table III.2
          
             Social Security and Medicare Taxes

General employer
duties              Specific requirements (federal only)
------------------  --------------------------------------
Employers must      --If the worker is an "employee" under
withhold the        the common law test or meets other
employee share and  requirements of the Internal Revenue
pay the employer    Code, the employer must comply with
share of FICA       FICA requirements.
taxes if the        --Even if the worker is an employee
worker is an        under common law, the employee may not
"employee," not an  be subject to FICA if the employee
"independent        meets the requirements of section 530
contractor."        of the Revenue Act of 1978, or the
                    employee is specifically exempted
                    under federal law.

Taxes must be       --Social Security taxes are not paid
withheld and paid   on wages over $68,400 for 1998; there
on all employee     is no limit on wages subject to
"wages" under       Medicare tax.
FICA.               --Certain payments are specifically
                    exempt from FICA tax by federal law.

Employers must      --Social Security taxes withheld from
properly calculate  an employee are currently 6.2 percent
taxes.              of employee wages--the employer pays
                    an equal amount.
                    --Medicare taxes withheld from an
                    employee are currently 1.45 percent of
                    employee wages--the employer pays an
                    equal amount.

Employers must      --Employers must deposit FICA taxes
remit taxes and     with form 8109 at the same time as the
report on taxes     employers deposit federal income tax
withheld and paid.  withheld.
                    --Employers must report quarterly on
                    amounts paid and withheld under FICA
                    on form 941.
----------------------------------------------------------

      UNEMPLOYMENT INSURANCE
----------------------------------------------------- Appendix III:0.3

The Federal Unemployment Tax Act (FUTA) requires employers to pay
amounts for employee unemployment insurance to federal authorities. 

Size limitations:  None, although small payrolls may be exempted from
payments or have fewer filing requirements. 

Comparable state law:  State unemployment insurance and the state
Employment Training Fund. 



                                       Table III.3
                         
                                  Unemployment Insurance

                            Federal unemployment
General employer duties     insurance                      State unemployment insurance
--------------------------  -----------------------------  ------------------------------
Employers must pay          --If the worker is an          --All workers recognized under
unemployment insurance tax  "employee" under the common    the common law test are
for all workers who are     law test or meets other        employees for the purposes of
considered employees under  requirements of the Internal   unemployment insurance unless
these statutes.             Revenue Code, the employer     there is a specific state
                            must pay unemployment tax      exemption for that type of
                            unless the employer meets the  employee.
                            requirements of section 530    --Even if a worker is not a
                            of the Revenue Act of 1978.    common law employee, state tax
                                                           provisions might require
                                                           unemployment insurance
                                                           coverage.

Unemployment insurance tax  --All wages over $7,000 are    --All wages over $7,000 are
must be paid on all wages   exempt.                        exempt.
recognized under federal    --Certain compensation is      --Certain compensation is
and state statutes.         specifically exempt under      specifically exempt under
                            federal law.                   state law.

Employers must properly     --There is no tax if total     --There is no tax if total
calculate tax.              wages paid to all employees    wages paid to all employees
                            are less than $1,500 per       are less than $100 per
                            quarter.                       quarter.
                            --FUTA tax is 6.2 percent;     --The maximum contribution
                            however, employers get credit  rate for California employers
                            up to 5.4 percent for the      is 5.4 percent, and new
                            amount of state unemployment   employers pay 3.4 percent for
                            tax paid.                      a 3-year period. Thereafter,
                                                           the rate may vary depending on
                                                           the individual employer's
                                                           experience.
                                                           --Most employers must also pay
                                                           0.1 percent to the state
                                                           Employment Training Fund.

Employers must remit tax    --If employers pay FUTA taxes  --Employers remit tax payments
to and file reports with    of over $100 per year,         quarterly with state form DE-
federal and state           employers remit the taxes      88.
authorities.                with the form 8109 on the      --Employers must file state
                            last day of the month          form DE-6 quarterly, reporting
                            following the end of the       on unemployment contributions;
                            quarter.                       annually, employers must file
                            --Annually, all employers      state form DE-7, reconciling
                            file either a form 940 or      total contribution amounts.
                            940EZ to the IRS, reporting
                            unemployment insurance paid
                            during the year; in addition,
                            employers paying FUTA taxes
                            of less than $100 per year
                            remit annual taxes with a
                            form 940.

Under state law, employers  \a                             --Employers must post general
may have to notify                                         notices in the workplace.
employees of benefits                                      --When an employee is laid
available through                                          off, fired, or placed on a
unemployment insurance.                                    leave of absence, the employer
                                                           must provide the employee with
                                                           a form DE-2320 detailing
                                                           information on benefits.
-----------------------------------------------------------------------------------------
\a Not applicable. 


      CORPORATE INCOME TAXES
----------------------------------------------------- Appendix III:0.4

The federal income tax code requires corporate entities to pay taxes
on corporate income. 

Size limitations:  None. 

Comparable state law:  State income tax code. 



                                       Table III.4
                         
                                  Corporate Income Taxes

General employer duties     Federal corporate income tax   State corporate income tax
--------------------------  -----------------------------  ------------------------------
Employers must file an      --Employers must file a        --Employers doing business in
annual return and pay any   corporate income tax return    California must pay an annual
taxes owed.                 on form 1120 with IRS;         "franchise tax" at a rate of
                            employers may be able to use   8.84 percent of net income
                            the shorter form 1120-A if     attributable to California.
                            gross receipts, total income,  --Out-of-state corporations
                            and total assets are less      that are deriving income from
                            than $500,000.                 sources in California but not
                            --Employers must file a        "doing business" in the state
                            return by the 15th day of the  must pay an annual
                            3rd month after the end of     "corporation income tax" at a
                            the corporation's tax year.    rate of 8.84 percent of net
                                                           income attributable to
                                                           California.
                                                           --Corporate returns and tax
                                                           payments are due to the
                                                           California Franchise Tax Board
                                                           2-1/2 months after the end of
                                                           the corporation's tax year.
-----------------------------------------------------------------------------------------

ENVIRONMENTAL LAW REQUIREMENTS FOR
CALIFORNIA'S ELECTRONIC/COMPUTER
INDUSTRY
========================================================== Appendix IV

In this set of tables, we focus on legal provisions related to the
electronic/computer industry, as identified in a study conducted by
EPA.  Since currently no similar study of provisions dealing with the
aerospace industry exists, we have restricted our review to those
provisions identified by EPA.  As with the other tables on legal
requirements, the environmental provisions listed are not intended as
an exhaustive list of those related to this industry. 


      AIR POLLUTION CONTROL
------------------------------------------------------ Appendix IV:0.1

The Clean Air Act regulates air pollution by means of air quality
control standards and emission control of certain pollutants. 

Size limitations:  None; the law applies to all employers. 

Comparable state law:  The California Clean Air Act, the Air Toxics
"Hot Spots" Information and Assessment Act, and the Tanner Act apply;
state law is applied if it is stricter than federal law. 



                                        Table IV.1
                         
                                  Air Pollution Control

                                                               Additional state
General employer duties       Specific federal requirements    requirements
----------------------------  -------------------------------  --------------------------
If employers construct or     --Employers must notify EPA in   --Local air pollution
modify certain types of       the event of start-up,           control districts may
equipment determined to       shutdown, or malfunction of      establish permit systems
"contribute significantly"    such equipment.                  for any "article, machine,
to air pollution, they must   --Within 180 days of start-up    equipment, or other
comply with EPA New Source    or up to 60 days of full         contrivance which may
Performance Standards; there  production, employers must test  cause the issuance of air
are specific standards for    for performance.                 contamination."
small industrial boilers,     --Employers may have to
large industrial boilers,     continue to monitor equipment
incinerators, petroleum       emissions.
storage tanks, volatile       --Employers must report
organic tanks, appliance      emissions in excess of EPA
surface coating, and          threshold quantities either
magnetic tape coating.        quarterly or semiannually.
                              --For specified types of
                              equipment, additional special
                              tests are required.

If an employer's facilities   --Employers must notify EPA of   --Toxic air contaminants
emit specified pollutants     new construction of a facility   include not only those
that are known to cause       that has hazardous emissions;    recognized by EPA but also
health hazards, the employer  notification should be before    those determined to be
must comply with EPA          start-up of the facility.        hazardous to health by
National Emission Standards   --Employers must prepare start-  California's Department of
for Hazardous Air             up/shutdown plans before the     Health Services.
Pollutants; there are         completion date of the           --Employers owning
specific standards for        facility.                        facilities emitting 10
chromium electroplating,      --Employers may have to install  tons or more of certain
halogenated solvent, and      compliance controls.             designated pollutants must
magnetic tape.                --Employers may have to conduct  submit an "emission
                              a performance test of the new    inventory plan" to the
                              facility.                        local district; those
                              --Once the new facility is       facilities identified as
                              operational, employers may have  "high priority" must then
                              to continually monitor           submit a risk assessment
                              emissions.                       plan to the district.
                              --Employers may have to report
                              emissions in excess of EPA
                              threshold quantities
                              semiannually.
                              --For facilities using
                              specified chemical processes,
                              special tests are required.

If an employer's facilities   --Employers must prepare and     \a
emit more pollutants than     submit risk management plans.
threshold quantities          --Employers must conduct
specified by EPA, the         compliance audits every 3
employer must comply with     years.
additional requirements.      --Employers must report on
                              accidents immediately after
                              occurrence.

If an employer's facilities   --Employers must submit an       \a
are considered a "major"      application to a state agency.
source of hazardous           (40 C.F.R. 70.5(c))
emissions, the employer must  --Employers must monitor the
apply for an EPA permit.      facility.
                              --Employers must report
                              monitoring results
                              semiannually.
-----------------------------------------------------------------------------------------
\a Some additional state requirements may apply. 


      WATER POLLUTION CONTROL
------------------------------------------------------ Appendix IV:0.2

The Federal Water Pollution Control Act (FWCPA) and the Safe Drinking
Water Act (SDWA) regulate the amount and type of pollutants
discharged into U.S.  waters. 

Size limitations:  None; the laws apply to all employers that
discharge pollutants into U.S.  waters. 

Comparable state law:  The Porter-Cologne Water Quality Control Act,
California Safe Drinking Water Act, Toxic Injection Well Control Act,
and Safe Drinking Water and Toxic Enforcement Act (which applies to
employers of 10 or more people) are applied to the extent they are
stricter than federal law. 



                                        Table IV.2
                         
                                 Water Pollution Control

                                                             Additional state
General employer duties     Specific federal requirements    requirements
--------------------------  -------------------------------  ----------------------------
If employers discharge      --Employers must limit           --Regional Water Quality
pollutants into U.S.        pollutant discharge to the       Control Boards under the
waters, they must obtain a  amount specified in the permit;  California State Water
permit under the National   the limitations are based on     Resources Control Board
Pollutant Discharge         the employer's use of the        issue permits and set
Elimination System          "best" technology.               discharge requirements.
(FWPCA).                    --At periodic intervals,         --Regional boards have power
                            employers must measure and       to compel cleanup to prevent
                            analyze pollutant discharges;    "substantial pollution" of
                            records must be kept 3 years.    state waters.
                            --Employers must report any
                            discharge in excess of permit
                            limits within 24 hours.

If employers discharge      --Pretreatment requirements are  \a
pollutants into a publicly  specified for chemicals in
owned waste treatment       operations involving metal-
system, they may have to    finishing, electroplating, and
"pretreat" certain          semiconductors.
pollutants before
releasing them into the
system (FWPCA).

If employers use            --Employers must obtain an       --California has stricter
underground wells to        engineer's certification that    standards for issuing
dispose of hazardous        the well is properly closed.     permits for injection wells
waste, they must meet       --Employers must report any      and prohibits injection
regulatory standards to     contamination that may endanger  "into or above drinking
protect groundwater from    the drinking water supply.       water."
contaminating the drinking  --Employers must establish a     --Employers must also file a
water supply (SDWA).        plan for plugging and            detailed statement with the
                            abandoning the well.             California Department of
                            --Employers must report any      Toxic Substances Control
                            changes made to the well.        giving information about the
                            --Employers must maintain a      well and the discharged
                            record of the nature and volume  wastes.
                            of fluids injected into the      --Employers of 10 or more
                            well for 3 years after closure.  people are prohibited from
                                                             knowingly releasing any
                                                             chemical known to the state
                                                             to cause cancer or
                                                             reproductive toxicity where
                                                             it may pass into any source
                                                             of drinking water.
-----------------------------------------------------------------------------------------
\a Some additional state requirements may apply. 


      HAZARDOUS SUBSTANCE CONTROL
------------------------------------------------------ Appendix IV:0.3

The Toxic Substances Control Act (TSCA); Resource Conservation and
Recovery Act (RCRA); Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA) and Emergency Planning and
Community Right-to-Know Act regulate the production, use, and
disposal of certain substances deemed to be hazardous to human health
or living organisms. 

Size limitations:  Regulations apply generally to all employers that
deal with hazardous substances over certain volumes; however, annual
reporting of Toxic Release Inventory is required only for employers
of more than 10 employees. 

Comparable state laws:  Hazardous Substances Act; Occupational
Carcinogens Control Act; Hazardous Waste Control Law; Hazardous Waste
Haulers Act; Storage of Hazardous Substances; Toxic Pits Cleanup Act;
Hazardous Waste Reduction; Recycling, and Treatment Research and
Demonstration Act; Hazardous Waste Management Plans; Hazardous Waste
Source Reduction and Management Review Act; Carpenter-Presley-Tanner
Hazardous Substance Act; Hazardous Waste Enforcement Coordinator and
Strike Force; Information Reward Program; Hazardous Substance Cleanup
Arbitration Panel; Hazardous Substances Information and Training Act
(Worker Right-to-Know Law); and Hazardous Materials Release Response
Plans and Inventory (Community Right-to-Know Law). 



                                        Table IV.3
                         
                               Hazardous Substance Control

                                                             Additional state
General employer duties     Specific federal requirements    requirements
--------------------------  -------------------------------  ----------------------------
If employers manufacture,   --Manufacturers or importers of  --Employers that handle any
process, or distribute      more than 10,000 lbs. of toxic   of EPA's "extremely
certain chemical            chemicals per year must report   hazardous substances" in
substances determined by    their chemical inventory to EPA  quantities in excess of
EPA to be toxic to health   every 4 years; if less than      state levels must complete a
or the environment,         10,000 lbs. per year, they must  registration form; employers
employers must keep         maintain records to verify low   may be required to develop a
records and report to EPA   volume.                          risk management and
(TSCA).                     --All employers must submit to   prevention program.
                            EPA any health and safety
                            studies they have conducted on
                            the toxic chemicals.
                            --Employers must maintain
                            records of allegations of
                            significant adverse reactions
                            caused by chemicals they use or
                            produce; if an adverse reaction
                            is found to have occurred to an
                            employee, records must be
                            maintained 30 years; otherwise,
                            5 years.
                            --If an employer is producing a
                            new chemical or using a toxic
                            chemical for a new purpose, the
                            employer must notify EPA at
                            least 90 days before use.

Any employer that produces  --Employers must obtain an EPA   --"Infectious" wastes are
"hazardous waste" as        identification number before     considered hazardous
identified by EPA must      they transport, store, treat,    wastes.
dispose of it as required   or dispose of hazardous waste.   --Employers that produce
by regulation, unless the   --Employers must prepare a       12,000 kilograms of
employer produces less      Uniform Hazardous Waste          hazardous waste per year
than 100 kilograms of       Manifest to accompany the waste  must review their operations
hazardous waste (RCRA).     at all times; after final        every 4 years to develop a
                            disposal, a copy of the          plan for how they could
                            manifest must be returned to     reduce wastes exceeding 5
                            the employer and maintained for  percent of the total yearly
                            3 years.                         volume at the site; failure
                            --Unless the employer has a      to act on the plan can lead
                            permit for a storage facility,   to monetary penalties.
                            wastes must be removed from the
                            site within 90 days of
                            accumulation.
                            --Waste spills that cause a
                            fire or explosion must be
                            reported immediately to EPA.
                            --Every 2 years, the employer
                            must report to EPA on the
                            volumes of waste generated.

Any employer that treats,   --To operate a facility (such    --Employers operating
stores, or disposes of      as a landfill, container, or     hazardous waste facilities
hazardous waste must        surface impoundment) for         must provide financial
obtain proper permits for   treatment, storage, or disposal  assurance adequate to meet
facility operation (RCRA).  of hazardous waste, the          damage claims arising from
                            employer must have an EPA        operation of the facility
                            identification number,           and costs of its closure.
                            periodically monitor and         --Regional Water Quality
                            inspect the facility, and meet   Control Boards must inspect
                            the certification requirements   all surface impoundments and
                            for the particular type of       require all businesses
                            facility.                        discharging liquid hazardous
                            --Any employer that owns an      wastes into them to provide
                            underground storage tank         hydrogeological assessment
                            containing hazardous wastes      reports.
                            must notify the state within 30  --Owners of underground
                            days of its use, monitor leaks,  storage tanks must obtain a
                            notify EPA of a release of       permit to operate from local
                            hazardous material within 24     authorities.
                            hours, and maintain records on
                            monitoring for 1 year.

Any employer aware of an    --In the event that an           \a
authorized release of a     employer's releases exceed the
hazardous substance in      reportable quantities in a 24-
excess of "reportable       hour period, the employer must
quantities" must            immediately notify EPA's
immediately notify EPA      National Response Center.
(CERCLA).

Employers handling          --Employers using an extremely   --Employers dealing with
"hazardous chemicals" or    hazardous substance in           chemicals known to the state
"extremely hazardous        quantities above the threshold   to cause cancer or
substances" in amounts      amounts must establish an        reproductive toxicity cannot
above levels set by EPA     emergency plan.                  expose any individual to
must provide information    --Employers must file "material  such chemicals without
on these substances to      safety data sheets" with local   giving "clear and
local authorities.          authorities for chemicals used   reasonable" warning to that
                            in operations.                   individual.
                            --If an employer releases an
                            "extremely hazardous substance"
                            in quantities above specified
                            amounts, the employer must
                            report the release to local
                            authorities.
                            --Notification of a release
                            must include information on the
                            nature and risks attributed to
                            the substance.
                            --Employers with more than 10
                            employees must report annually
                            to EPA on their Toxic Release
                            Inventory identifying chemical
                            releases, transfers, and
                            treatment recycling.
-----------------------------------------------------------------------------------------
\a Some additional state requirements may apply. 


GAO CONTACTS AND STAFF
ACKNOWLEDGMENTS
=========================================================== Appendix V

GAO CONTACTS

Charles A.  Jeszeck, Assistant Director, (202) 512-7036
Carol L.  Patey, Evaluator-in-Charge, (617) 565-7575

ACKNOWLEDGMENTS

In addition to those named above, the following individuals made
important contributions to this report:  J.  William Hansbury, Senior
Evaluator, who performed case study work at companies and analyzed
agencies' efforts to inform companies of their legal requirements;
Nancy M.  Peters, Senior Evaluator, who identified, analyzed, and
summarized the laws that affect firms and participated in case study
visits; and Mary W.  Reich, Senior Attorney, Office of General
Counsel, who reviewed the study's legal analysis. 


*** End of document. ***