Nation's Business 1996-01

74 Pages·7.6 MB·English

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The Small Business Adviser
Boosting Revenue Adding Children Strategies For
With Repeat Sales To Your Payroll Franchise Growth
Small B s Outlook
While the economy
Published by
U.S. Chamber of Commerce
» will slow a bit in 1996,
JANUARY 1996 - $2.50
most signs point to a solid
year for small companies.
We're a l SO well schooled in
the art of self-detense.
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Safety Hd( CliiU
Comfort LmiJes Child Security
Rear Door I^xks Steel Safety c agt
C-mpli
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Rear L rush Front
Zones C rush /.ones
Side Door Beam* Proteetne
4-WLtlAnti-Lock
Knee \
Brake Si/stem
'e hope your employees never have to use some of the features on the C avaner.
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Can you trust
your employees ?
A. All of the time
B. Most of the time
C. Not sure
If your answer is A, B or C. you may need
—
r
Aetna's Employee Dishonesty Coverage.
According to the U. S. Chamber Some of those coverages include Make this important business
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$.").*$ billion is lost each year checks, burglar) and robbery, or broker today.
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Nation s business January iwd
NationsBusiness Published by
U.S. Chamber of Commerce
Washington, D.C.
PHOTO : WIFREDO LEE—WD€ WORLD PHOTO CJIMCALLXMkY
While key members of Congress and White House representatives met in December on the Revenue doubled for decoraUrr Rebecca
federal budget, most economists had already banked on an agreement in their projections Sheam, center, after slw expanded her
for slow but steady economic growth in 1996. Cover Story Page 10. once-solo operation. Franchising, Page kl.
COVER STORY TRANSPORTATION FAMILY BUSINESS
10 Slow But Steady 26 A Sobering Law 39 Making Better Decisions
For Truckers
Experts say the 1996 economy will look a Tips for enhancing the decision-making
lot like 1995's, although with less growth. Testing for alcohol use is now a federal process; expanding the firm's horizons.
But the environment should be good for
requirement for many small companies
small business. that employ fewer than 50 truck drivers. FRANCHISING SPECIAL GUIDE
41 New Strategies
U—Position Your Firm Now
28— Where To Find Help
For Growth For Growth
15—Adjusting The Numbers
SMALL BUSINESS COMPUTING Companies are devising innovative ways
to help their franchisees flourish.
MANAGING 29 Staking A Claim
17 Easing The Pain On The Internet INTERNATIONAL TRAVEL
Of Layoffs Businesses are flocking to gain a presence 47 Fast-Forwarding
on the Internet's World Wide Web, where
Downsizing is a reality for many small The Paper Chase
small firms are on equal footing with the
firms as well as large, but there are ways
big players. Expediting services can cut red tape and
to minimize its disruptive effects.
quickly get you the documents needed for
30—Setting Up Your Business an overseas trip.
18—Reading And Resources
On The Wet
88—Netscape Founder Points, WHERE I STAND
FINANCE And It Clicks
48 A Report Card On Congress
25 Donations For Deductions
MARKETING Here's your chance to grade the L996
Inventory that's just taking up space can
n of the 101th Congress the first
be used to lower your taxes while it helps 36 Increasing Revenue
• inl* controlled session in in
a nonprofit organization. With Repeat Sales
POLL RESULTS
Enterprise 2000: The key to the future of
33 Small Business many companies may be in generating
49 Views On Uncle Sam
Financial Adviser new revenue from the customers they
already have. •• respondents to the November
The rules for putting your children on the e I Stand poll want a reduction in
payroll; business greets an IRS rule 88—On The Bookshelf the layers of federal bureaucracy they
change skeptically; investment clubs for must go through to re©
fun and profit.
Nation's business January 1996
VOL 84, NO. 1 Editor's Note
Capitalizing On Opportunities
Many entrepreneurs enter a new year
with a set of goals, and one of their first
tasks is to develop a plan for achieving
them. To help in that planning, we
offer this month's cover story, the
"1996 Small Business Outlook."
One of the most striking projections
uncovered by Senior Editor Jim Wor-
sham in reporting this story was a
consistent view among economists and PHOTO LAUBENCE L LEVW
small-business aficionados that we are on the cusp of a promising
decade of growth among small companies. (Small Business Administra
PHOTO c RICHARD SHOCK
tion chief Philip Lader, at right in the photo with Worsham, was one of
An idea for a skiing accessory put David
Leinbeix/er on unfamiliar ground. many experts expressing that view.)
Managing Your Small Business, Page 20. For the reasoning behind that longer-term forecast and for steps you
can take to cash in on it—as well as to learn the short-term outlook—see
DEPARTMENTS our story, beginning on Page 10.
4 Letters
One of the hottest avenues to business expansion is the Internet. And
6 Entrepreneur's Notebook
big businesses aren't the only ones hurrying to get on line. Don't miss
8 Dateline: Washington
our story on Page 29 about how small companies are using the global
20 Managing Your Small Business computer network to get ahead.
22 Making It
50 To Your Health In our Franchising Special Guide, on Page 41, several franchisors
shared their growth strategies with Associate Editor Roberta Maynard.
58 Direct Line
Some of the details may spark ideas that could invigorate your
60 Free-Spirited Enterprise
company, whether it's a franchise or not.
61 Classified Ads
64 Editorial Sometimes, family-business owners add their sons
and daughters to the payroll to foster the children's
interest in the business and to help it survive to the
next generation. In the Small Business Financial
Adviser; on Page 33, we highlight some considerations
to be weighed in paying child, vn for their work.
I M< IXINAI I)
Cover Design and Illustration: Michael Rook
Those are just four oftho stories in this issue aimed at helping you and
your company grow There will be many more in the year ahead.
Best wishes for a happy and prosperous new year from all of us at
Nation's H n si it ess.
Mitiont Business (ISSN 0028-047X) is published monthly it 1615 H Street. N.W..
Washington. DC 20062-2000 Tel [phone] (edftonall Advertising sales
headquarters: 711 Third Ave. New York. NY 10017 Tel [phone] Crjpyngfrt
» 1996 by the United States Chamber ol Commerce All rights reserved. Subscription WtJl
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Cphooptyorcigohpty Calenayr aanrctiec leC ehneterer m( CtCorC )a. 2fl2a2t fReeo soefw $o1o.d5 0D rpiveer . cDoapnyv oerf ye aMcahs sa rt0ic1le9 23S. etnod Editor
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Printed in the U.S.A.
Nation's Business January 1996
Letters
Nation'sBusiness
The United States Chamber of Commerce, publisher of The IRS Is Trying You Want To Be
Nation's Business, is a federation of businesses, trade
associations, local and state chambers, and American To Pass The Buck In That Number
chambers of commerce abroad.
CHAIRMAN OF THE BOARD In regard to your December article I Bravo on your Free-Spirited En-
Dennis W. Sheehan "Shaky Declarations Of Independ 33 terprise article in November about
PRESIDENT
Dr. Richard L. Lesher ence," the Internal Revenue Service the cruise marketer with the 800 "vanity"
SENIOR VICE PRESIDENT/COMMUNICATIONS would love for all employers, large and number. As a teleservices professional, I
Dr. Carl Grant small, to be the "tax keepers" for all frequently see how 800 and 888 numbers
VICE PRESIDENT/PUBLISHING
David A. Roe workers. The IRS loves the free book can give a business a competitive edge.
keeping services that employers provide The article was correct in pointing out
EDITOR already. If the IRS could get everyone, that it is critical to select a number that
Marv Y. McElveen
DEPUTY EDITORS including independent contractors, under accurately communicates the service or
Albert G. Holzinger, Terence F. Shea, Roger Thompson
SPECIAL CORRESPONDENT the oversight of employers, how much product being offered. A well-chosen
Sharon Xelton easier it would be for the agency to collect
SENIOR EDITORS
Michael Barrier, David Warner, James Worsham taxes. And an employer is easier to go
ARSoSbOeCrtIAaT ME EavDnITaOrdR,S Stephen Rush after for fines and penalties.
SENIOR WRITER I feel that if an employer uses an
Laura If. Litvan
CONTRIBUTING EDITORS independent contractor and issues him or
Robert T. Gray, Henry Altman, Ripley Hotch, Julie Candler,
John L. Ward, Craig E. Aronoff, Jon Pepper, Peter Weaver, her a 1099 form—which notifies the
Albert B. Ellentuck, Janet L. Willen, Randy Myers, contractor, the IRS, and the state where
Marv Rowland, Susan Biddle Jaffe, Dale D. Buss
EDITORIAL ADMINISTRATIVE ASSISTANT the contractor lives of the amount of
Irma N. Toliver
payments the employer has made to the
ART DIRECTOR contractor in the previous year—then the
Hans A. Baum employer has done his or her job.
ASSISTANT ART DIRECTOR
Alberto Pacheco The IRS has no right to challenge so
SENIOR DESIGNERS
Kathv Reuter, Kathleen Vetter, Georgia Leigh McDonald many workers. Most contractors, I believe,
SENIOR ARTIST are honest and will pay their fair share.
Michael Rook
PHOTO DEPARTMENT Donna L. Mitchell number helps to eliminate confusion.
Laurence L. Levin, photo editor
Frances Borchardt, assistant photo editor Business Manager There are several other factors to
T. Michael Keza, chief photographer RI-EL-DO, Inc. consider in the selection and use of an 800
ART PRODUCTION ASSISTANT
Theodora D. Tavlor Medford, N.J. or 888 vanity number:
• When communicating a vanity num
PRODUCTION DIRECTOR
Heidi Sakai Gioseffi Giving Due Credit ber, present the spelling and the actual
PRODUCTION COORDINATORS digits the word represents. It's frustrat
Stephanie Jankowski, Janet M. Sappington To The New Congress
PRODUCTION ADMINISTRATOR ing to hunt around the telephone keypad.
Seretha Armstrong
El Like a refreshing, cool breeze on a • If the number is being communicated
U.S. ADVERTISING sweltering summer day, your edito- on radio, always speak the words and
Pete McCutchen, marketing director rial in the December issue was very digits. For example, 1-800-HIGH-SEA
[phone]
Kathleen Brown, administrator welcome. Kudos for giving credit where it could be misconstrued as 1-800-HIGH-
ADVERTISING MANAGERS
Atlanta <404) 393-0140 is due regarding the start Congress has SEE or some other combination.
Rob McWalters made to correct the many ills that previ • Try to acquire any numbers that
Chicago (S12 ;;
Richard Knepler ous Congresses have foisted upon us. could be confused with your number and
Dallas 2I4^:i87-0404
Richard Chalkley I, for one, am sick and tired of the same have them routed to your operators.
Southtield, Mich. [phone] old story every day pushed forward by • As 888 numbers become available,
Richard Topous, Michael McNew
Los Angeles '213) 651-1466 most of the media, and I say thank you for obtain the same vanity numbers to elimi
Tom Bowman
New York [phone] having the guts to report it "like it is." nate any confusion customers may have
Jerry V Camporine, Neil Hanlon, I realize that the editorial was not the with your 800 number.
Bart McDonnell, Peter J. Riordan
San Francisco 14151121-7486 first time you have reported on the effort Your article hit the mark—800 and 888
Richard A. Sands
the new Congress is making to correct the numbers are powerful tools when strate
CLASSIFIED ADVERTISING anti-business laws that have proliferated gically integrated into a company's mar
.1 5640
Maria Scher, director during the past 60 years, but it's always keting mix.
Debora A Tydings, account executive good to see it in print. Ken Dobbins, Director
Perhaps if people continue to see that Targetbase Marketing
INTERNATIONAL MARKETING
Vico Fabrizi" they're not alone in their thinking, they will Greensboro, N.C.
(201)664
Fine [phone] be less inclined to become fainthearted and
to believe all is lost and nothing can be done.
A Weilspring Of People
CEIlRizCaUbLeAtThI OAN AANllDen C, OdNirSeUcMtoErR MARKETING Nation's Business has every right to be
Lucy Oliver, circulation manager proud of a job well done. Who Know The Score
Liana Glasco, consumer marketing manager
James Pinkney Jr., circulation coordinator Paul M. Smith, Manager Kl Your October cover story, "Minor
Sweetwater Hotel ity Business: The New Wave," cap
MARKETING COMMUNICATIONS
Janine Grossman, dfen and Convention Center tures the essence of a growing strength
Jean Shaughr tkm manager Sweetwater, Tenn. within the small-business community—
Diane Lewis, promotion coordinator
Nation's Business January 1996
minority entrepreneurs. Your coverage of "March Madness" when it is used in
the growth of minority-owned small busi association with its annual basketball
nesses relays vital information about this tournament. The matter is the subject of
Get the Facts.
trend. an ongoing dispute between the NCAA
As president of the Service Corps of and the IHSA.
Retired Executives Association, I too
Right Now!
have seen a consistent rise in the number
Another Helpful Hint
of minority entrepreneurs entering small-
business markets. For Computer Users
Small-Business Information
For many years, I have served as a I In your November article "Home Is
business adviser to aspiring entrepre I I Where The Office Is," you correctly Instantly Accessible via Fax.
neurs. For those people looking to give point out that the computer monitor should Nation's Business' new
back to the community, SCORE offers a
be below eye level. Even though our old MarketFAX service
variety of volunteer opportunities, and for
typing teachers taught us never to look at gives you quick and NEW!
those seeking advice, SCORE can
our fingers while easy access to the
help.
typing, the fact is small-business Reprints
Your readers can call us at that constant eye information you
1-800-634-0245 to volunteer or to movement be want and need. via FAX!
receive a referral to a business tween screen and You can now order
adviser. We have 13,000 volun
keyboard is re
articles from Nation's
teers throughout the nation who
quired, and I place
Business and receive them
counsel owners of small busi
my monitor as low
nesses or those seeking to start a via fax instantly!
and close to the
business.
keyboard as possi
Your magazine is a pleasure to ble. • Articles Now Available:
read—it provides tangible infor ILLUSTRATION^ M^ICHA^EL ^BOO^K ^ ^ ^ ^ ^ ^^ Another impor ($4.95 per article)
mation that small businesses can put to
tant fact I have never seen mentioned is
use right away. that a good way to deal with reflection 4813 Slow But Steady:
Bill Trueblood from overhead lights is to tilt the screen • Experts forecast a slower-growing
President forward until you cannot see any reflec economy for 1996, but the environment
Service Corps of Retired should be good for small business.
tion while the monitor is off. I find that an
Executives Association
add-on glare screen, which reduces glare 4814 Increasing Revenue
Washington, D.C.
by having one or both surfaces etched, can With Repeat Sales:
blur detail to some extent. • The future of many firms may lie in generating
A Tug Of War Mike Morrison new revenue from current customers.
Over 'March Madness' Frames N Things
4815 Staking A Claim On The Internet:
Chatsworth, Calif
El In a November Direct Line item • Businesses are flocking to gain a presence
about product licensing, you incor on the World Wide Web, where small firms
rectly identified the trademark "March Corrections are on equal footing with the big players.
Madness" as the property of the National
The November special report on luxury 4809 Growing More By Doing Less:
Collegiate Athletic Association.
cars mistakenly stated that a super • Outsourcing enables firms to focus on core
For almost 90 years, the Illinois High
charged 3800 Series II V-6 engine is activities and build in flexibility by farming
School Association has sponsored a state
standard on the Pontiac Bonneville SSE. out activities best done by others.
basketball tournament, which has come to
The supercharged version of the engine is
be known as "March Madness." As the • Best-Seller List:
standard only on the Bonneville SSEi.
result of its long and extensive use of this •
mark, the IHSA has developed valuable 4800 • Find out which articles are the most-
rights to the mark, which it exclusively In "On-The-Shelf Technology" [Making requested by over 850,000 Nation's
owns. It, December], Electronic Imaging Serv Business subscribers. Call now to receive
ices founder Steve Bardwell and Execu your FREE copy of the Nation's Business
The mark is also protected by a federal tive Vice President Tim McKenzie were Best-Seller List.
trademark registration owned by the
misidentified in the photo caption.
IHSA. • How To Order:
Bardwell was at left in the photo.
Please advise your readers that the To order, call toll-free 1-800-597-7363
IHSA licenses its mark to businesses and and enter the number of the article you
that inquiries about licensing should be You can communicate with Nation's are requesting; then enter your credit
addressed to H. David Fry, Executive Business via: card number* and fax number. The
Director, Illinois High School Association, Letter: Editor, Nation's Business article will arrive within minutes.
2715 McGraw Drive, RO. Box 2715, Bloom- 1615 H Street, N.W * Visa. MutarCsVd, or American Express
ington, 111. 61702-2715. Washington, D.C. 20062-2000
H. David Fry
& Fax: [phone]+87
Executive Director • Call Now! rcmwraia
S CompuServe: 76^86,1735
Illinois High School Association
Please include your telephone number -m 1-800-597-SEND iw
Bloomington, III.
and your postal address. Because of
space limitations, we cannot print all
[Editor's note: The NCAA maintains that letters received, and those selected for
it owns common-law rights to the phrase publication may be condensed.
CALL TOLL-FREE 1 -800-597-7363
7 DAYS A WEEK 21 HOIKS A DAY
Nation's Business January 1996
Using Barter For
Notebook
Cash Management
BUI Martin
By
For any business, mamtaining a bal are paid outright, separate from barter ices or items you're likely to want with the
anced cash flow means a series of dollars.) Hard currency can figure into quality you demand. You must also try to
trade-offs. trades: If the item or service retails for assess the demand for your products or
For me, maintaining the cash flow of more than $1,500, the seller can accept the services. If they cater to a limited audience,
my 4V2-year-old fitness-equipment company, total value in barter dollars or a combination you may find limited trading possibilities.
U.S. Fitness Products, in Raleigh, N.C., of up to $1,500 in barter dollars plus cash. Once you join, bartering becomes as
literally has meant trading my equipment for Network members can refuse any trade, much a tool for inventory control as for cash
goods and services management. If I have items on the show
through bartering. room floor that aren't moving, I can offer
Since joining the them for barter, allowing me a bigger
local chapter of profit—albeit in barter dollars—than if I
Business Exchange sold them at a discount, and opening up
International (BXI), space for equipment that's hot.
a Los Angeles- While bartering does not involve hag
based bartering net gling—the prices are set, and the only
work, in 1992,1 have decision is whether to accept an offer and
used barter dollars how payment will be structured—it does
to "pay" for carpen involve hands-on management. Most en
try work, office fur trepreneurs don't need something else to
niture, and the put their hands on—other than cash. If you
plumbing, electrical, think of bartering as a means of getting or
and lighting sys keeping that cash, it's easy to see how it has
tems in our current a place in a business plan.
showroom—a total
value of $20,000 to
For More Information
$30,000. PHOTO: tDUAf* HALL
Barter also has A bartering network has helped Bill Martin minimize cash outlays Bartering networks operating in your
paid for several at his fitness-equipment company. area can be found in the Yellow Pages
trips and $1,700 under Barter & Trade Exchanges. A
worth of transmis trade group, the International Reciprocal
sion work on my truck. As we prepare to although trading is the only means of Trade Association, can help you check out
relocate, it's my intention to again remodel acquiring barter dollars. Accepting a a network's background and reputation;
and outfit the showroom through bartering. trade—and deciding whether to do it en send a stamped, self-addressed envelope
In fact, before buying anything, I examine tirely in barter dollars or as a combination to lliTA. 8806 Hawaii Court, Alexandria,
the pros and cons of bartering for what I of exchange units and currency—should Va. 22312. »
need rather than laying out cash. By doing depend on your business needs and goals. in
this, I've expanded the business and "sold" Currently, I'm doing a lot of bartering
slow-moving goods without taking on debt knowing that 111 use as many barter dollars
or losing money. as possible to limit my cash outlay during
With BXI, the process works as follows: our move. At other times, I have limited or What I
Businesses and individuals join a local held off on trades to accommodate cash-flow
chapter for a small fee. For us, it was $300. needs. Barter sales can approach 5 percent
Learned ^
Trades with other network members are of our annual sales of about $1.5 million.
paid in "barter dollars," which are put in a While there are additional benefits, such
network account that functions like a bank as nationwide networking and annual bar-
A bartering network
checking account. (Taxes and shipping costs tering shows, which expand your potential
market, bartering has risks. It's important can help a company
Bill Martin, president of U.S. Fitness to consider barter dollars as real money.
maintain smooth
Products, in Raleigh N.C., prepared this Frequently, you see people at bartering
account with Contributing Editor Susan shows getting caught up in buying things cash flow, hut there
Biddle Jaffe. Readers with insights on they wouldn't purchase with hard cash.
running or starting a business are in Before signing with any bartering net are risks to avoid.
vited to contribute to Entrepreneur's work, check out how long it has operated in
Notebook. Write to: Editor, Nation's Busi your area, the number of members locally
ness, 1615 H Street, N.W., Washington, and nationally, and whether member I nisi
D.C. 90062-2000. nesses are well-established and offer serv
FUTURE FAX
Try This New Information Delivery System, RIGHT NOW
H
ou're talking with your customer, answering Here's an example: The Boston Computer Exchange,
questions and describing your products. He took all the documents they normally mailed to their
wants to see some printed information. You clients and put them into the MarketFax system. They
scribble his name and address on an have price sheets, news items, hot products, policy
envelope, and put a brochure in the mail. A statements, listings forms, nine-year price comparisons,
few days later, you remember the client, order forms, and everything else. It's all available to any
fumble for the address and your tickler file reminds you to client anywhere in the world who has a fax machine.
call back and follow up. Americas Trading Company in New York uses MarketFax
to list auctions and inventory liquidations in a timely
"What do you think of my products? Did you get my
fashion. Everything they have in writing is available to all
brochure?" "No."
clients; anytime; to any fax machine.
He never got it. It got lost in the mail, it came to the
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The Complete Package
Maybe you forgot to send it. It doesn't matter what
excuse you use, the fact is that you lost a sale. In the age
OK, so it delivers information right now. It must be hard.
of fax and e-mail, you might as well use courier pigeons
NO. The best part of MarketFax is that it is as easy for the
as the post office. Yet mailing printed material is business
owner to use as it is for the customer. The system is
as usual for most business owners.
delivered as a complete package based on a personal
What about fax technology? If the client asks for printed computer, with a scanner, some specialized computer
information, you take his fax number, drop papers in the boards and amazing software. All you do
fax hopper, and he gets your material right away. That's is plug it in, scan in your documents and
better, but it's still old-fashioned. begin telling people how to get it. That's
it. It's easy.
There is a smarter way to get information to prospects.
Now when a client asks for more
Consider this: You give your client your special phone
information on your products, you
number. The system asks what information he wants and
answer, "Give me a fax number and
requests his fax number. He keys in his fax number and
you'll have it right now." Your customer
hangs up. A few seconds later the prospect gets your
can take care of their own information.
printed information along with a menu of additional
Anytime. To Any fax machine. When
options. The menu can say "Extension 101 is a product
they are HOT. You can also get
price list. Extension 102 has information on our financing
prospects' phone numbers for your
plan. Extension 103 is the specifications on our deluxe
sales people to contact.
model." The customer then calls back for more details
Right Now. Your customers can get the information they
MarketFax has enough extra capacity
want, right now, right in their fax machine, or the fax
that you can lease extra extensions to
machine of their boss. And it happens NOW. That's how
friends and other businesses to help
MarketFax delivers information.
defray costs. MarketFax can store codes President & Founder Tom
Kadala says "Savvy business
for up to 1,000 separate multipage
A New Technology owners are finding hundreds of
documents.
new uses for this kind of fax
MarketFax is a new technology from Alternative response technology."
Savvy business owners are finding
Technology Corporation, Hastings-on-Hudson, N.Y. It
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combines new computer technology with voice cards, fax
response technology. MarketFax can be
boards, and easy to use software to create a whole new
a business in itself. You could connect it to a 900 phone
type of information system. It's a better way to deliver
line and sell information on your own or other people's
information. It is instantaneous. It responds to the client
products.
when they are interested. It gives your clients exactly what
you want them to see. It's an entirely new service and it
Try it. Right Now. Call 914-478-5906. Try Extension
can work for you. It's easy for your clients to use, and
606 for The Boston Computer Exchange. Ask for
changes how you get information into the hands of
Extension 614 for Americas Trading Company as an
people who want it.
example. If you want more information on MarketFax,
To compete in today's rapidly changing global markets, punch in Extension 727.
savvy business owners use new technology to improve
channels with clients.
Alternative Technology ( brporation
One North Street • P.O. Box J57 • Hasdngkon-Huckon, NY 10706
Teb [phone] •Roc [phone]
Nation's Business January 1996
Dateline: Washington
Business news in brief from the nation's capital.
Workplace Safety And Health
REGULATION
OSHA Loses In Ruling • Year* Violations Fines Levied approved by Clinton Nov. 20, requires
federal regulators to distinguish between
On Multiple Penalties 1985 218,694 $11,218,904
petroleum oils and animal and vegetable oils
Business recently scored a major victory 1986 250,551 14,076,612 when issuing anti-pollution rules.
when a review board disallowed a penalty- 1987 266,856 22,371,219 Corrections Day bills are aimed at
setting practice of the Occupational repealing laws or regulations deemed
1988 289,008 34,471,373
Safety and Health Administration. An unwise or unworkable. In the House, they
independent review board derailed an 1989 333,206 53,855,085 are considered under expedited debate
effort by the agency to impose multiple 1990 381,694 82,220,754 rules, and approval requires 60 percent of
penalties on companies for single viola the votes cast. In the Senate, they require
tions of workplace safety or health rules. 1991 387,629 124,341,507 only a majority vote for passage.
OSHA, part of the U.S. Department of 1992 362,372 173,390,322 The oils bill was praised by House
Labor, enforces the Occupational Safety Speaker Newt Gingrich, R-Ga., as it
1993 321,831 160,136,983
and Health Act of 1970 and imposes cleared Congress and headed for the
penalties for violations of that law. (See 1994 324,642 182,887,265 White House. "When you've got a regula
the accompanying chart.) 1995 269,871 158,838,609 tion as absurd as this one—equating salad
In January 1993, the federal safety oil with heavy crude oil—it clearly needs
agency fined Arcadian Corp. in the wake •From Oct. 1 of the precedng year through Sept. 30 ot the correcting," said Gingrich, who instituted
year listed
of a 1992 explosion at the firm's fertilizer Corrections Day.
plant in Lake Charles, La. In this in The measure changes part of the Oil
stance, OSHA multiplied the $50,000 pen Pollution Act of 1990, passed in the wake
alty for a violation of its "general duty" Commission. The commission is an inde of the Exxon Valdez oil spill. The act
clause, which requires a safe and healthful pendent group appointed by the president seeks to reduce the risk of oil spills and
workplace, by the 87 employees exposed and authorized to adjudicate cases result improve the response to those that do
to the mishap, for a total fine of $4.35 ing from OSHA rulings. The U.S. Cham occur. Under the Corrections Day bill,
million. The maximum fine for a single ber of Commerce filed a brief in support vessels carrying animal and vegetable oils
violation is $70,000. of the companies. won't have to meet the same environ
In another case, the agency fined Hart The Review Commission ruled that mental standards as those transporting
ford Roofing Co., of Glastonbury, Conn., only one fine can be proposed by OSHA petroleum oils. The rest of the act remains
$210,000 for its failure to put up a safety for each safety or health violation. unchanged.
railing on a roof where its employees were —David Warner As of Dec. 1, eight other Corrections
working. That amount was determined by
Day bills had been passed by the House
multiplying the proposed $35,000 penalty Regulatory Correction' Is Law; since it began the new procedure last
by the six workers who had been exposed
Others Await Senate Action summer, and seven awaited Senate ac
to the hazard.
tion. In one ease, differences between the
Both companies appealed the legality of President Clinton has signed his first
House and Senate-passed of a
assessing multiple penalties for a single "Corrections Day" bill, the first such m
bill had to he resolved
safety violation to the OSHA Review ure forwarded to him by Congress. The bill,
—Janns Worshnni
TAXES
Social Security Tax Base, the same—7.65 percent of wages ((;.:>
increase to $11,520 in L996, up from
Earnings Limit Increase percent for Social Security and L46 per
$11,280. Rare
cent for Medicare). For self-employed
the recipient will in benefit
The amount of an individual's wages individuals, who pay both the employer's
bipartisan proposal in CongreM would lift
subject to Social Security payroll taxes and the employee's share of the tax, the
(FICA taxes) in 1996 will be $62,700, up rate remains 15.3 percent of earnings ,h'' can to $14,000 in L996 and havi
from $61,200 in 1995. (12.4 percent for Social Security and J.'.) reach $80,000 by 2002.
There is no limit on the amount of percent for Medicare). Individuals aged 62 In 6 1 will |0M$] in
benefits I SOOlll
wages subject to the 1.45 percent Medi Social Security recipients will receive a
LOW, up from $8,100 in I
care payroll tax. However, Medicare re 2.6 percent cost-of-living increase begin
There will be DO eanringi peoaU
forms are under consideration in Con ning with their January 1996 checks. The
individuals aged 70 nr nlder.
gress, and program changes—including same adjustment is used for BOOM private-
the payroll-tax provisions—are possible sector pension plans and other federal The maximum monthly Social Security
ijenefil for a worker retiring at age 66 in
in 1996. benefits payments.
J»uary IW8 J, up from $1,199 a
The Social Security tax rate paid by In addition, the earnings limit for Social
employers and wage earners will remain Security recipients aged »;:> to 69 will year earlier.
—Albert G 11'nl:i tiger