1. 1 Introduction to the Energy Industry EUT 101 Lesson 23 Business Aspects of Utility Industry 10/29/2007 This product was funded by a grant awarded under the President’s Community-Based Job Training Grants as implemented by the U.S. department of labor’s Employment and Training Administration. The information contained in this product was created by a grantee organization and does not necessarily reflect the official position of the U.S. Department of labor. All references to non-governmental companies or organizations, their services, products, or resources are offered for informational purposes and should not be construed as an endorsement by the Department of Labor. This product is copyrighted by the institution that created it and is intended for individual, organizational, non-commercial use only.

2. 2 Lesson 23 Agenda Business background (NOT in the book) –What is a business –Business ownership –Business as a legal entity –Labor & management relationships –Employee & Company relationship –Fair Labor Law

3. 3 What is a Business Business: –Organization that offers goods and/or services to a market place –Business is a “Person” subject to laws & penalties: Administrative: regulations Common law: court case precedents Statutory laws: enacted by Congress; State and Federal Labor laws: Administrative (Labor Department); Common; Statutory Contract laws: Labor and Management agreements

4. 4 Types of Businesses by ownership Proprietorship: –Owned by one person or one family –Typically very small organizations Privately held: –Owned by a number of private individuals –No stocks are available to the general public –Governed by owners (partners) –Can be large (Hughes Aircraft; Bechtel)

5. 5 Types of Businesses by ownership continued Publicly held –Owned by owners (partners), employees AND General Public through purchase of Stock –Board of Outside Directors governs the Business hires/fire the management, including the president Represents public investor’s interest –Typically large corporations, including Electric Utilities –More regulated; more expensive to form

6. 6 Types of Businesses by financial liability Proprietorship, non-incorporated –Owner personally responsible for business debts Proprietorship, Incorporated: –Owner and the Business have separate checkbooks –Only the Business is responsible for business debts –LIMITED PERSONAL LIABILITY by the Owner

7. 7 Types of Businesses by financial liability continued LLCs and LLPs –Owners, management and employees have LIMITED Personal Liability for Business’ debts –Tax rules may be different from the ones for Corporations Corporations (‘Inc.’) –Owners (in privately held) or major stock holders (in publicly held) companies have more limited personal liability than in LLC or LLP

8. 8 Types of Businesses by relationship to employees An “at will” Corporation –Can be Proprietorship, Privately or Publicly held –Must be small (set by individual States); start-ups –Employee can be fired for no cause –Employee can resign immediately at a moment’s notice ( no 2 week notice required) –Employees must be informed of the “at will” status when hired; Part of Employment Contract –Reason: to limit “wrongful dismissal” law suits

9. 9 Types of Businesses by relationship to employees cont’d Non ‘at will’ businesses –Proprietorships, Private, Public, small or large –Concern employee non-performance of work duties –Employee must be given a written warning by management that he/she is not performing work duties satisfactorily –Consequences of continued non-performance must be spelled out (program to improve, demotion, dismissal, etc) –Employee can legally contest his/her dismissal; through arbitration or court action –Corporations with Employee Unions are non ‘at will’

10. 10 Fair Labor Law Applies to hourly paid workers or other workers if Union Contract with Employer so specifies –Eight hour work day –Overtime pay for Saturday and Sunday work Exempt (from fair labor law) workers –Engineers, managers or so called ‘professionals’ –Company not required to pay overtime –Company can demand longer than 8 hour days