5 ms·

They had to pay the owed pay of $40K, plus a $3500 fine. That spells out why these unethical creeps did this. The upside for them is pretty big. $40k savings a

They had to pay the owed pay of $40K, plus a $3500 fine. That spells out why these unethical creeps did this. The upside for them is pretty big. $40k savings at the low risk of paying a $3500 fine is huge upside. Wonder how much money they have "made" by doing this in the past when they didn't get caught? In order to stop companies from doing things like this the penalties need to be great enough that it outweighs the benefits. "Oh; you didn't pay those workers the $40k you owed them? Here's a $400k fine on top of it for the ten times prior where you probably got away with. Have a nice day."

fleitz 12y ago
This is a good idea, life sentences for smoking pot in California have drastically reduced the incidence of pot smoking.
- mathattack 12y ago
  Very different. Corporations frequently think like this under the guise of duty to shareholders. Many do the right thing, but frequently they do a cost-benefit analysis against the damage from getting caught. Gary Becker (RIP) discusses this [0] on the 4th page of his Nobel lecture, using a simplified example of people parking illegally more often if it's cost effective to pay for the occasional ticket. [0] http://home.uchicago.edu/gbecker/Nobel/nobellecture.pdf http://home.uchicago.edu/gbecker/Nobel/nobellecture.pdf
  - disposition2 12y ago
    Are you attempting to excuse the action?
    - pavel_lishin 12y ago
      I believe he's explaining the reason corporations do this.
      - disposition2 12y ago
        Fair enough
    - bigtunacan 12y ago
      I think he was just pointing out that a person choosing to do drugs is different than a business breaking the law for profit. Some businesses will engage in ethical and lawful behaviors because they are run by people of high moral standard that will not allow themselves to be comprised. Other businesses will model the risk/reward in terms of profits and see if acting ethically or unethically yields the most profit. They will then do whatever yields the most profit, given an acceptable level of risk, whether that involves unlawful and unethical behaviors or not. My original post is pretty oversimplified, but it gets to the heart of the problem. If a business truly errs and breaks the law unknowingly and is acting in an ethical manner then they should correct the action and make right the situation. In this case no additional penalty, or a minimal fine would seem to be in accordance with the behavior. If the business is on the other hand deliberately breaking the law and/or acting unethically then the penalty needs to be high enough that it offsets the potential profits/rewards so as to keep unethical businesses in check. The problem is determining when is it an unintentional mistake, and when was it calculated? In this case EFI is claiming it was an oversight/mistake, but that seems unlikely. Proving that it was deliberate and unethical can be more difficult. So how do we separate the wheat from the chaff?
      - fleitz 12y ago
        It's a pretty well solved problem, you look around the world find out which justice systems produce low recidivism rates and implement those policies. You'll find that there's little correlation between recidivism rate and length of sentence / amount of fine. Or you can do what they do in America where they have the worlds largest prison population, which is hand out excessively harsh fines and prison sentences for relatively minor issues. Protip: If you want people to act like the law is any different than separating the wheat from the chaff it would behoove one to stop referring to people in that manner. Instead you might want to say something like "How can we persuade people to my way of thinking?"
        bigtunacan 12y ago
        My meaning was not, "how can we persuade people to my way of thinking", rather it was how do we identify who has made an honest mistake and who was acting in a deliberate manner so as to punish the two differing groups accordingly.
    - mathattack 12y ago
      Per what others have said, I am explaining by following the money, rather than justifying. I think companies and people (despite companies being people?) act somewhat differently on this despite similar economics.
- MrBuddyCasino 12y ago
  Because peer pressure in the local gulf club forced the CEO to "just try it once"? Boy, did I get teased at Wharton when I told the guys I paid my workers minimum wage, thinking I was already pretty ruthless. Stupid me!
- maxxxxx 12y ago
  That's a really bad comparison. Companies respond really well to financial incentives.
- bsder 12y ago
  White collar crimes like these have been show to be disincentivized by punishment. These crimes are not carried out by impulse--the calculation of reward/punishment/probability has a high deterrent effect. Drugs, violence, etc. are not in the same class. They are carried out generally on impulse and, as such, punishment has very little deterrent effect.
coldcode 12y ago
The DOT used to fine my (travel) employer 10-20K just for wrong text in a form.

fleitz 12y ago

This is a good idea, life sentences for smoking pot in California have drastically reduced the incidence of pot smoking.

mathattack 12y ago
Very different. Corporations frequently think like this under the guise of duty to shareholders. Many do the right thing, but frequently they do a cost-benefit analysis against the damage from getting caught. Gary Becker (RIP) discusses this [0] on the 4th page of his Nobel lecture, using a simplified example of people parking illegally more often if it's cost effective to pay for the occasional ticket. [0] http://home.uchicago.edu/gbecker/Nobel/nobellecture.pdf http://home.uchicago.edu/gbecker/Nobel/nobellecture.pdf
- disposition2 12y ago
  Are you attempting to excuse the action?
  - pavel_lishin 12y ago
    I believe he's explaining the reason corporations do this.
    - disposition2 12y ago
      Fair enough
  - bigtunacan 12y ago
    I think he was just pointing out that a person choosing to do drugs is different than a business breaking the law for profit. Some businesses will engage in ethical and lawful behaviors because they are run by people of high moral standard that will not allow themselves to be comprised. Other businesses will model the risk/reward in terms of profits and see if acting ethically or unethically yields the most profit. They will then do whatever yields the most profit, given an acceptable level of risk, whether that involves unlawful and unethical behaviors or not. My original post is pretty oversimplified, but it gets to the heart of the problem. If a business truly errs and breaks the law unknowingly and is acting in an ethical manner then they should correct the action and make right the situation. In this case no additional penalty, or a minimal fine would seem to be in accordance with the behavior. If the business is on the other hand deliberately breaking the law and/or acting unethically then the penalty needs to be high enough that it offsets the potential profits/rewards so as to keep unethical businesses in check. The problem is determining when is it an unintentional mistake, and when was it calculated? In this case EFI is claiming it was an oversight/mistake, but that seems unlikely. Proving that it was deliberate and unethical can be more difficult. So how do we separate the wheat from the chaff?
    - fleitz 12y ago
      It's a pretty well solved problem, you look around the world find out which justice systems produce low recidivism rates and implement those policies. You'll find that there's little correlation between recidivism rate and length of sentence / amount of fine. Or you can do what they do in America where they have the worlds largest prison population, which is hand out excessively harsh fines and prison sentences for relatively minor issues. Protip: If you want people to act like the law is any different than separating the wheat from the chaff it would behoove one to stop referring to people in that manner. Instead you might want to say something like "How can we persuade people to my way of thinking?"
      - bigtunacan 12y ago
        My meaning was not, "how can we persuade people to my way of thinking", rather it was how do we identify who has made an honest mistake and who was acting in a deliberate manner so as to punish the two differing groups accordingly.
  - mathattack 12y ago
    Per what others have said, I am explaining by following the money, rather than justifying. I think companies and people (despite companies being people?) act somewhat differently on this despite similar economics.
MrBuddyCasino 12y ago
Because peer pressure in the local gulf club forced the CEO to "just try it once"? Boy, did I get teased at Wharton when I told the guys I paid my workers minimum wage, thinking I was already pretty ruthless. Stupid me!
maxxxxx 12y ago
That's a really bad comparison. Companies respond really well to financial incentives.
bsder 12y ago
White collar crimes like these have been show to be disincentivized by punishment. These crimes are not carried out by impulse--the calculation of reward/punishment/probability has a high deterrent effect. Drugs, violence, etc. are not in the same class. They are carried out generally on impulse and, as such, punishment has very little deterrent effect.

coldcode 12y ago

The DOT used to fine my (travel) employer 10-20K just for wrong text in a form.