Talking Consumer Know-How Reports 2003 Edition

SMALL BUSINESS HANDBOOK:

2007-12-05T00:44:00.000-08:00

SMALL BUSINESS HANDBOOK:

LAWS, REGULATIONS AND

TECHNICAL ASSISTANCE SERVICES

Read This First

This Handbook on the basic regulations and related services

administered by the Department of Labor (DOL) is designed

primarily for small businesses in general industry. It begins with a

general overview of DOL requirements. This is followed by ten

sections containing information on the specific laws and

regulations. Read the overview first to find out which

requirements apply to your business. For each requirement the

overview refers to specific sections or to a DOL office.

Employers in certain industries (such as agriculture and mining)

or employers working on government contracts should contact

the referenced DOL offices for further information and

assistance.

Each section discusses: covered employers; basic provisions

and requirements; how to obtain information and assistance from

DOL; penalties for non-compliance; and relation to state, local

and other federal laws. The section subtitles identify the

applicable laws and the associated regulations, which can be

found in the Code of Federal Regulations (CFR). Many sections

refer to an appendix which provides additional addresses and

phone numbers for obtaining DOL assistance.

You should be aware that other federal agencies besides DOL

enforce laws and regulations that affect employers. For example,

statutes designed to ensure non-discrimination in employment

are generally enforced by the Equal Employment Opportunity

Commission. Also, the Taft-Hartley Act regulating employer

conduct with regard to employees in a wide range of areas is

administered by the National Labor Relations Board. Please

consult these agencies for further information on their requirements.

The information contained in this publication is not to be

considered a substitute for any provisions of the laws enforced

by the Department of Labor or for any regulations issued by the

Department.

CONTENTS

Overview

page 1

Section 1. Minimum Wage and Overtime Pay

page 11

Section 2. Child Labor (Nonagriculture)

page 17

Section 3. Employment Eligibility of Alien Workers

page 20

Section 4. Occupational Safety and Health

page 22

Section 5. Employee Benefit Plans

page 36

Section 6. Whistleblower Protection

page 42

Section 7. Veterans

page 44

Section 8. Plant Closings and Mass Layoffs

page 46

Section 9. Lie Detector Tests

page 48

Section 10. Wage Garnishment

page 50

Appendix

page 53

OVERVIEW: Major Statutes and Regulations Administered by

the Department of Labor

I. Requirements Applicable to Most Employers

Wages and Hours

The Fair Labor Standards Act (FLSA) prescribes minimum

wage and overtime pay (and record-keeping) standards

affecting most private and public employment, including

homework. This is administered by the Wage and Hour Division

of DOL's Employment Standards Administration (ESA).

1. The Minimum Wage and Overtime provisions of the FLSA

require the following from employers ofcovered employees who

are not otherwise exempt: Pay covered employees a minimum

wage of not less than $4.25 an hour effective April 1, 1991.

(Employers may pay employees on a piece-rate basis and under

some circumstances consider the tips of employees as part of

their wages.)

Until March 31, 1993, employers may pay a training wage, under

certain conditions, of at least 85 percent of the minimum wage

(but not less than $3.35 an hour) for up to 90 days to employees

under age 20.

While not placing a limit on the total hours which may be worked,

the Act requires that covered employees, unless otherwise

exempt, be paid not less than one and one-half times their

regular rates of pay for all hours worked in excess of 40 in a

workweek.

2. Homework requirements of the FLSA generally prohibit the

performance of certain types of work in an employee's home

unless the employer has obtained prior certification from the

Department of Labor.

See Section 1, page 11, for more detail on wages and hours.

Who May Work, and When (administered by the Wage and Hour

Division)

1. Child Labor provisions of the FLSA (Non-agriculture) include

restrictions on the hours of work and occupations for youths

under age 16, and these provisions set forth 17 hazardous

occupations orders for jobs declared by the Secretary of Labor

to be too dangerous for minors under age 18 to perform.

See Section 2, page 17, for more detail.

2. Immigrant Labor is regulated by the Immigration and

Nationality Act (INA). Under the INA, employers may legally hire

workers only if they are citizens of the U.S. or aliens authorized to

work in the United States. The INA requires that employers verify

the employment eligibility of all individuals hired after November

6, 1986.

See Section 3, page 20, for more detail.

The Immigration Nursing Relief Act of 1989 (INRA) was enacted

to provide relief for the shortage of registered nurses by

legalizing current nonimmigrant registered nurses and ensuring

employer efforts to attract and develop more U. S. employees to

the nursing profession. Contact your local ESA Wage and Hour

Division office for more details (see page 54).

Workplace Safety and Health

The Occupational Safety and Health Act (OSH Act), which is

administered by DOL's Occupational Safety and Health

Administration (OSHA) regulates safety and health conditions in

most private industries (except those regulated under other

federal statutes, e.g., transportation). Many private employers

are regulated through states operating under OSHA-approved plans.

It is the responsibility of employers to become familiar with

standards applicable to their establishments, to eliminate

hazardous conditions to the extent possible, and to comply with

the standards. Compliance may include assuring that employees

have and use personal protective equipment when required for

safety or health. Employees must comply with all rules and

regulations that are applicable to their own actions and conduct.

Covered employers are required to maintain workplaces that are

safe and healthful, including meeting many regulatory

requirements. OSHA promulgates safety and health standards,

and makes distinctions by type of industry.

Safety standards include regulations covering hazards such as

falls, explosions, electricity, fires, and cave-ins, as well as

machine and vehicle operation and maintenance, etc.

Health standards regulate exposures to a variety of health

hazards through engineering controls, the use of personal

protective equipment (e.g., respirators, ear protection etc.), and

work practices.

Where OSHA has not promulgated a specific standard,

employers are responsible for complying with the OSH Act's

"general duty" clause [Section 5(a)(1)], which states that each

employer "shall furnish . . . a place of employment which is free

from recognized hazards that are causing or are likely to cause

death or serious physical harm to his employees."

When OSHA develops effective safety and health regulations,

safety and health regulations originally issued under the following

laws administered by the Department of Labor are superseded:

the Walsh-Healey Act, the Service Contract Act, the Contract

Work Hours and Safety Standards Act, the Arts and Humanities

Act, and the Longshore and Harbor Workers' Compensation Act.

See Section 4, page 22, for more detail.

Pensions and Welfare Benefits

The Employee Retirement Income Security Act (ERISA)

regulates employers who have pension or welfare benefit plans.

This statute preempts many state laws in this area and is

administered by DOL's Pension and Welfare Benefits

Administration (PWBA) . The statutealso provides an insurance

mechanism to protect retirement benefits with employers

required to pay annual pension benefit insurance premiums to

the Pension Benefits Guarantee Corporation (PBGC), which is

associated with the Department.

1. Pension Plans must meet a wide range of fiduciary and

reporting and disclosure requirements, with regulations defining

such concepts as the value of plan assets, what is adequate

consideration for the sale of assets, the effects of participants

having control over the assets in their plans, etc.

2. Welfare Benefit Plans also must meet a wide range of

fiduciary, reporting, and disclosure requirements. In addition,

PWBA administers the disclosure and notification requirements

for the continuation of health care provisions that were enacted

as part of the Consolidated Omnibus Budget Reconciliation Act

of 1985 (COBRA). These provisions cover group health plans of

employers with 20 or more employees on a typical business day

in the previous calendar year. COBRA gives participants and

beneficiaries an election to maintain, at their own expense,

coverage under the employer's health plan.

See Section 5, page 36, for more detail.

3. Pension Insurance information can be obtained from the

Pension Benefits Guarantee Corporation by writing PBGC,

Coverage and Inquiries Branch (25440), 2020 K Street, N.W.,

Washington, D.C. 20006-1860, or by calling (202) 778-8800.

Miscellaneous Requirements for Most Employers

1. The Labor-Management Reporting and Disclosure Act

(also known as the Landrum-Griffin Act, LMRDA) deals with the

relationship between a union and its members. It provides for

safeguarding of union funds, reporting and disclosure of financial

transactions, and administrative practices of union officials,

labor consultants, etc. This is administered by DOL's Office of

Labor-Management Standards (OLMS).

Call your local OLMS office for more detail (see page 65).

2. Employee Protection provisions are built into most labor and

public safety statutes, e.g., the FLSA, the OSH Act, ERISA, many

environmental protection statutes, etc. These protect employees

who exercise t heir rights under these Acts to complain about

employers, ask for inform ation,etc. (remedies can include back

wages and reinstatement.) They are normally enforced by the

DOL agency most concerned, e.g., OSHA enforces those arising

under the OSH Act. For more information on employee

protection under a statute administered by DOL, see the relevant

section. For information on employee protection in the

environmental context, see Section 6, page 42, for more detail.

3. Veteran's Reemployment Rights ensures that those who serve

in the armed forces have a right to reemployment with the

employer they were with when they went in service, including

protection for those called up from the reserves or National

Guard. These are administered by DOL's Office of theAssistant

Secretary for Veterans' Employment and Training. See

Section 7, page 44, for more detail.

4. Plant Closings and Layoffs by employers may be subject to

the Worker Adjustment and Retraining Notification Act (WARN)

which provides for early warning to employees of the proposed

layoffs or plant closings. Questions on WARN may be

addressed to DOL's Employment and Training Administration (ETA).

See Section 8, page 46, for more detail.

5. The Employee Polygraph Protection Act (EPPA) prohibits

most use of lie detectors by employers on their employees. This

is administered by the Wage and Hour Division of ESA.

See Section 9, page 48, for more detail.

6. Garnishment of Wages by employers is subject to regulation

under the Consumer Credit Protection Act. This is administered

by the Wage and Hour Division of ESA.

See Section 10, page 50, for more detail.

II. Requirements Applicable to Employers Because of the

Receipt of Government Contracts, Grants, or Financial

Assistance

1. Wage, Hour, and Fringe Benefit Standards

are determined for these contracts under: the Davis-Bacon and

related Acts (for construction); the Contract Work, Hours, and

Safety Standards Act; the McNamara-O'Hara Service Contract

Act (for services); and the Walsh-Healey Public Contracts Act

(for manufacturing). The Wage and Hour Division of ESA both

makes the determination of wages and benefits and enforces

them. Contact your local ESA Wage and Hour Division Office for

more detail (see page 54).

2. Safety and Health Standards are also issued under these Acts

and are specifically applicable to covered contracts. Contact

your local ESA Wage and Hour Division Office for more detail

(see page 54).

3. Non-discrimination and Affirmative Action Requirements

are set under Executive Order 11246, Section 503 of the

Rehabilitation Act, and the Vietnam Veteran's Readjustment

Assistance Act (38 U.S.C. 4212). These programs prohibit

discrimination and require affirmative action with regard to race,

sex, ethnicity, religion, disability and veterans' status. They are

administered by ESA's Office of Federal Contract Compliance

Programs (OFCCP). OFCCP works closely with EEOC to

coordinate these efforts. Contact your local ESA Office of

Federal Contract Compliance Programs for more detail (see

page 57).

III. Industry-Specific Requirements in Addition to the Above

Agriculture

Several safety and health standards issued and enforced by

OSHA (e.g., field sanitation) and the Environmental Protection

Agency (e.g., pesticides) apply to this industry. In addition,

several agriculture- specific programs are administered by ETA

and ESA's Wage and Hour Division. For more information on

these programs, contact your local ESA office (see page 54).

1. The Migrant and Seasonal Agricultural Worker Protection Act

(MSPA) requires that covered farm labor contractors, agricultural

employers and agricultural associations comply with worker

protection applicable to migrant and seasonal agricultural

workers whom they recruit, solicit, hire, employ, furnish or

transport or, in the case of migrant agricultural workers, to whom

they provide housing.

2. The Immigration and Nationality Act (INA) requires that

employers wishing to use nonimmigrant workers for temporary

agricultural employment apply with the Employment and Training

Administration for a labor certificate showing that there are not

sufficient workers in the U.S. able, willing, qualified and available

to do the work and that employment of such nonimmigrant

workers will not adversely affect the wages and working

conditions of workers in the U.S.

3. INA as Amended by the Immigration Reform and Control Act

requires all employers of special and replenishment agricultural

workers (SAWs and RAWs) to provide certain information on the

use of such workers to the federal government.

4. The Fair Labor Standards Act (FLSA) contains special child

labor regulations applicable to agricultural employment. The

regulations administered and enforced by the DOL agencies

apply only to those establishments with employees (e.g., they do

not apply to family-run and family-operated farms that do not hire

outside workers).

Additionally, in some cases there are minimum employment

standards which must be met before an establishment is

covered by a regulation (e.g., OSHA's field sanitation standard is

not enforced at establishments that employ fewer than 11

workers in the field).

Mining Safety and Health

The goal of the Federal Mine Safety and Health Act of 1977 is to

improve working conditions in the nation's mines. Its provisions

cover all miners and other persons employed to work on mine

property, and it is administered by the Labor Department's Mine

Safety and Health Administration (MSHA). This law strengthened

an earlier coal mining law and brought metal and nonmetal (non-

coal) miners under the same general protections as those

afforded coal miners.

Under the Act, the operators of mines, with the assistance of

their employees, have the primary responsibility for ensuring the

health and safety of the miners. MSHA is responsible for fully

inspecting every underground mine at least four times a year and

every surface mine at least twice a year to ensure that these

responsibilities are met.

This law also established mandatory miners' training

requirements and strengthened health protection measures and

gassy mine safety programs. It also included tougher civil dollar

penalties for safety or health violations by mine operators. The

Act also provided for closure of mines in cases of imminent

danger to workers or failure to correct violations within the time

allowed, and it called for greater involvement of miners and their

representatives in processes affecting workers' health than

previously had been possible.

Each mine must be legally registered with MSHA. Many mine

operators are required to submit plans to MSHA for approval

before beginning operations. Such plans must be followed during

mining. Required plans cover operational aspects such as

ventilation, roof control, and miner training. Mine operators are

required to report each individual mine accident or injury to

MSHA.

MSHA's Coal Mine Safety and Health Division enforces law and

regulations at more than 4,600 underground and surface coal

mines. MSHA's Metal and Nonmetal Mine Safety and Health

Division enforces federal requirements, conducts training, and

assists the mining industry in reducing deaths, serious injuries

and illnesses at more than 11,000 non-coal mines (including

open pit mines, stone quarries, and sand and gravel operations).

Health and safety regulations cover numerous hazards, including

those associated with the following:

exposure to respirable dust, airborne contaminants and noise

design, operation and maintenance requirements for mechanical

equipment, including mobile equipment roof falls, and rib and

face rolls flammable, explosive and noxious gases, dust and

smoke electrical circuits and equipment fires storage,

transportation, and use of explosives hoisting access and egress

Contact your local MSHA office for more detail (see page 74).

Construction

Several DOL agencies are involved in administering programs

solely related to the construction industry.

1. Safety and Health:

OSHA has separate occupational safety and health standards

which apply only to the construction industry.

See Section 4, page 22, for more detail.

2. Wage and Fringe Benefits: The Davis-Bacon Act and related

Acts require most contractors and subcontractors on federally

assisted contracts in excess of $2,000 to pay the prevailing

wage rates and fringe benefits as determined by the Secretary of

Labor. Contact your local ESA Wage and Hour Division Office

for more detail ( see page 54).

3. Non-discrimination:

OFCCP has special regulations on non-discrimination and

affirmative action which apply only to the construction industry.

Contact your local ESA/OFCCP office for more detail (see page

57).

4. Anti-Kickback:

The "Anti-Kickback" section of the Copeland Act applies to all

contractors and subcontractors performing on any federally

funded or assisted contract for the construction, prosecution,

completion or repair of any public building or public work --

except contracts for which the only federal assistance is a loan

guarantee. This provision precludes a contractor or

subcontractor from inducing an employee -- in any manner -- to

give up any part of his/her compensation to which he/she is

entitled under his/her contract ofemployment.

Contact your local ESA Wage and Hour Division office for more

detail (see page 54).

Transportation

Many laws with labor provisions in them that affect the

transportation industry are administered by agencies outside of

the Department. For example, the Railway Labor Act is

administered primarily by the Department of Transportation and

the Railway Retirement Board. Special DOL programs for this

industry are:

1. Safety and Health:

Special longshoring and maritime industry standards issued and

enforced by OSHA.

See Section 4, page 22, for more detail.

2. Longshoring and Harbor Work:

Workers' compensation coverage provided under the Longshore

and Harbor Workers' Compensation Act, which is administered

by ESA. Employers must meet the coverage, funding, and other

requirements needed to provide these benefits.

Contact your local ESA/OWCP office for more detail (see page 77).

1. MINIMUM WAGE AND OVERTIME PAY

Fair Labor Standards Act of 1938, as Amended (Title 29, U.S.

Code, Sections 201 et seq.; 29 CFR 510-800).

Who is Covered

The Fair Labor Standards Act (FLSA) establishes minimum

wage, overtime pay, record-keeping and child labor standards

that affect more than 80 million full- and part-time workers in the

private sector and in federal, state and local governments.

The Act applies to enterprises that have employees who are

engaged in interstate commerce, producing goods for interstate

commerce, or handling, selling or working on goods or materials

that have been moved in or produced for interstate commerce.

For most firms, anannual dollar volume of business test of not

less than $500,000 applies. The following are covered by the Act

regardless of their dollar volume of business: hospitals,

institutions primarily engaged in the care of the sick, aged,

mentally ill or disabled who reside on the premises; schools for

children who are mentally or physically disabled or gifted;

preschools, elementary and secondary schools and institutions

of higher education; and federal, state and local government

agencies.

Employees of firms that do not meet the $500,000 annual dollar

volume test may be individually covered in any workweek in

which they are individually engaged in interstate commerce, the

production of goods for interstate commerce, or an activity which

is closely related and directly essential to the production of such

goods. Domestic service workers, such as day workers,

housekeepers, chauffeurs, cooks or full-time babysitters, are

also covered if they receive at least $50 in cash wages in a

calendar quarter from their employers or work a total of more

than 8 hours a week for one or more employers.

An enterprise that was covered by the Act on March 31, 1990,

and that ceased to be covered because of the increase in the

annual dollar volume test to $500,000, as required under the

1989 amendments to the Act, must continue to pay its emplo

yees not less than $3.35 an hour (the statutory minimum wage

prior to 4/1/90) and continues to be subject to the overtime pay,

child labor and record-keeping requirements of the Act.

Some employees are excluded from the Act's minimum wage

and/or overtime pay provisions under specific exemptions

provided in the law. Because these exemptions are generally

narrowly defined, employers should carefully check the exact

terms and conditions for each by contacting the Wage and Hour

Division of the Employment Standards Administration (ESA) at

the offices referenced below.

The following are examples of employees exempt from both the

minimum wage and overtime pay requirements:

Executive, administrative and professional employees (including

teachers and academic administrative personnel in elementary

and secondary schools and also including certain skilled

computer professionals as provided in P.L. 101-583, November

15, 1990) and outside sales persons Employees of seasonal

amusement or recreational establishments

Employees of certain small newspapers and switchboard

operators of small telephone companies

Seamen employed on foreign vessels

Employees engaged in fishing operations

Farm workers employed on small farms (i.e., those that used no

more than 500 "man-days" of farm labor in any calendar quarter

of the preceding calendar year)

Casual babysitters and persons employed as companions to the

elderly or infirm

The following are examples of employees exempt from the Act's

overtime pay requirements only:

Certain commissioned employees of retail or service

establishments Auto, truck, trailer, farm implement, boat or

aircraft salesworkers, or parts-clerks and mechanics servicing

autos, trucks or farm implements, and who are employed by non-

manufacturing establishments primarily engaged in selling these

items to ultimate purchasers

Railroad and air carrier employees, taxi drivers, certain

employees of motor carriers, seamen on American vessels and

local delivery employees paid on approved trip rate plans

Announcers, news editors and chief engineers of certain

non-metropolitan broadcasting stations

Domestic service workers who reside in their employer's

residence

Employees of motion picture theaters

Farmworkers

Certain employees may be partially exempted from the Act's

overtime pay requirements. These include:

Employees engaged in certain operations on agricultural

commodities and employees of certain bulk petroleum

distributors

Employees of hospitals and residential care establishments

which have agreements with the employees to work a 14-day

work period in lieu of a 7-day workweek if the employees are

paid overtime premium pay within the requirements of the Act for

all hours worked over 8 in a day or 80 in the 14-day work period,

whichever is the greater number of overtime hours

Employees who lack a high school diploma or who have not

completed the eighth grade may be required by their employer to

spend up to 10 hours in a workweek in remedial reading or

training in other basic skills that is not job-specific, as long as

they are paid their normal wages for the hours spent in training.

Such employees need not be paid overtime premium pay for

their training hours.

Basic Provisions/Requirements

The Act requires employers of covered employees who are not

otherwise exempt to pay these employees a minimum wage of

not less than $4.25 an hour. The increases in the minimum wage

mandated by the 1989 amendments to the Act will be phased in

on an industry-by-industry basis in Puerto Rico. All Puerto Rican

indust ries must reach the mainland minimum wage by April 1,

1996. Employers may pay employees on a piece-rate basis, as

long as they receive at least the equivalent of the required

minimum hourly wage rate. Employers of tipped employees, i.e.,

employees who customarily and regularly receive more than $30

a month in tips, may consider the tips of these employees as part

of their wages. This tip credit may not, however, exceed 50

percent of the required minimum wage.

Employers may pay a training wage, under certain conditions, of

at least 85 percent of the minimum wage (but not less than $3.35

an hour) for up to 90 days to employees under age 20, except for

migrant or seasonal agricultural workers and H-2A nonimmigrant

agricultural workers performing work of a temporary or seasonal

nature. An employee who has been paid at the training wage for

90 days can be employed for 90 additional days at the training

wage by a different employer if that employer provides on-the-job

training in accordance with rules of the Department of Labor.

Employers may not displace employees (or reduce their wages

or benefits) in order to hire employees at the training wage.

These training wage provisions expire on March 31, 1993.

The Act also permits the employment of the following individuals

at wage rates below the statutory minimum wage under

certificates issued by the Department:

Student learners

Full-time students in retail or service establishments,

agriculture, or institutions of higher education

Individuals whose earning or productive capacity is impaired by

a physical or mental disability, including those related to age or

injury, for the work to be performed

While not placing a limit on the total hours which may be worked,

the Act requires that covered employees, unless otherwise

exempt, be paid not less than one and one-half times their

regular rates of pay for all hours worked in excess of 40 in a

workweek. Employers are required to keep records on wages,

hours and other items as set out in the Department of Labor's

regulations. Most of this information is of the type generally

maintained by employers in ordinary business practice.

Performance of certain types of work in an employee's home is

prohibited under the Act unless the employer has obtained prior

certification from the Department of Labor. Restrictions apply in

the manufacture of knitted outerwear, gloves and mittens, buttons

and buckles, handkerchiefs, embroideries and jewelry (where

safety and health hazards are not involved). Employers wishing

to employ homeworkers in these industries are required to,

among other things, provide written assurances to the

Department that they will comply with the Act's monetary and

other requirements. The manufacture of women's apparel (and

jewelry under hazardous conditions) is generally prohibited,

except under special certificates that allow homework in these

industries when the homeworker is unable to adjust to factory

work because of age or physical or mental disability, or is caring

for an invalid in the home.

Special provisions apply to state and local government

employment. It is a violation of the Act to fire or in any other

manner discriminate against an employee for filing a complaint

or for participating in a legal proceeding under the Act. The Act

also prohibits the shipment of goods in interstate commerce

which were produced in violation of the minimum wage, overtime

pay, child labor, or special minimum wage provisions.

Assistance Available

More detailed information, including copies of explanatory

brochures and regulatory and interpretative materials, may be

obtained by contacting the offices listed beginning on page 53 in

the appendix.

Penalties

Enforcement of the Act is carried out by Wage and Hour Division

compliance officers stationed throughout the country. A variety of

remedies are available to the Department to enforce compliance

with the Act's requirements. When compliance officers encounter

violations, they recommend changes in employment practices in

order to bring the employer into compliance. Willful violations

may be prosecuted criminally and the violators fined up to

$10,000. A second conviction may result in imprisonment.

Employers who willfully and repeatedly violate the minimum wage

or overtime pay requirements are subject to civil money penalties

of up to $1,000 per violation. Employers are subject to a civil

money penalty of up to $10,000 for each employee employed in

violation of the child labor provisions. When a civil money penalty

is assessed, employers have the right, within 15 days of receipt

of the notice of such penalty, to file an exception to the

determination. When an exception is filed, it is referred to an

administrative law judge for a hearing and determination as to

the appropriateness of the penalty. If an exception is not filed, the

penalty becomes final.

The Secretary of Labor may also bring suit for back pay and an

equal amount in liquidated damages and obtain injunctions to

restrain persons from violating the Act. Employees may also

bring suit, where the Department has not done so, for back pay

and liquidated damages, as well as attorney's fees and court

costs.

Relation to State, Local and Other Federal Laws

State laws also apply to employment subject to this Act. When

both this Act and a state law apply, the law setting the higher

standards must be observed.

2. CHILD LABOR (Nonagriculture)

Fair Labor Standards Act of 1938, as Amended (Title 29, U.S.

Code, Section 201 et seq.; 29 CFR 570-580).

Who is Covered

The child labor provisions of the Fair Labor Standards Act (the

Act) are designed to protect the educational opportunities of

youths and prohibit their employment in jobs and under

conditions detrimental to their health and well-being.

In nonagriculture, the child labor provisions apply to enterprises

that have employees who are engaged in interstate commerce,

producing goods for interstate commerce, or handling, selling or

working on goods or materials that have been moved in or

produced for interstate commerce. For most firms, an annual

dollar volume of business test of not less than $500,000 applies.

The following are covered by the Act regardless of their dollar

volume of business: hospitals; institutions primarily engaged in

the care of the sick, aged, mentally ill or disabled who reside on

the premises; schools for children who are mentally or physically

disabled or gifted; preschools, elementary and secondary

schools and institutions of higher education; and federal, state

and local government agencies. Employees of firms that do not

meet the $500,000 annual dollar volume test may be individually

covered in any workweek in which they are individually engaged

in interstate commerce, the production of goods for interstate

commerce or an activity which is closely related and directly

essential to the production of such goods. Domestic service

workers, such as day workers, housekeepers, chauffeurs, cooks

or full-time babysitters, are also covered if they receive at least

$50 in cash wages in a calendar quarter from their employers or

work a total of more than 8 hours a week for one or more

employers.

An enterprise that was covered by the Act on March 31, 1990,

andceased to be covered because of the increase in the annual

dollar volume test to $500,000 as required under the 1989

amendments to the Act, remains subject to the Act's child labor

provisions. Sixteen is the minimum age for most nonfarm work.

However, youths may, at any age: deliver newspapers; perform

in radio, television, movies, or theatrical productions; work for

their parents in their solely owned nonfarm businesses (except in

mining, manufacturing, or in any other occupation declared

hazardous by the Secretary of Labor); or gather evergreens and

make evergreen wreaths.

Basic Provisions/Requirements

The Act's child labor provisions include restrictions on the hours

of work and occupations for youths under age 16. These

provisions set forth 17 hazardous occupations orders for jobs

declared by the Secretary of Labor to be too dangerous for

minors under age 18 to perform. The Act prohibits the shipment

of goods in interstate commerce which were produced in

violation of the child labor provisions. It is also a violation of the

Act to fire or in any other manner discriminate against an

employee for filing a complaint or for participating in a legal

proceeding under the Act. The permissible jobs and hours of

work, by age, in nonfarm work are as follows:

Youths 18 years or older may perform any job for unlimited hours

Youths age 16 and 17 may perform any job not declared

hazardous by the Secretary of Labor, for unlimited hours

Youths age 14 and 15 may work outside school hours in various

nonmanufacturing, nonmining, nonhazardous jobs under the

following conditions: no more than 3 hours on a school day, 18

hours in a school week, 8 hours on a nonschool day, or 40 hours

in a nonschool week. In addition, they may not begin work before

7 a.m. nor work after 7 p.m., except from June 1 through Labor

Day, when evening hours are extended until 9 p.m. Youths aged

14 and 15 who are enrolled in an approved Work Experience

and Career Exploration Program (WECEP) may be employed

for up to 23 hours in school weeks and 3 hours on school days

(including during school hours).Detailed information on the

occupations determined to be hazardous by the Secretary is

available by contacting the Wage and Hour Division at the

offices listed below.

Department of Labor regulations require employers to keep

records of the date of birth of employees under age 19, including

daily starting and quitting times, daily and weekly hours worked,

and the employee's occupation.

Employers may protect themselves from unintentional violation of

the child labor provisions by keeping on file an employment or

age certificate for each youth employed to show that the youth is

the minimum age for the job. Certificates issued under most

state laws are acceptable for this purpose.

Assistance Available

More detailed information, including copies of explanatory

brochures and regulatory and interpretative materials, may be

obtained by contacting the offices listed beginning on page 53 in

the appendix.

Penalties

Employers are subject to a civil money penalty of up to $10,000

for each employee employed in violation of the child labor

provisions. When a civil money penalty is assessed, employers

have the right, within 15 days of receipt of the notice of such

penalty, to file an exception to the determination. When an

exception is filed, it is referred to an administrative law judge for

a hearing and determination as to the appropriateness of the

penalty. Either party may appeal the decision of the

administrative law judge to the Secretary of Labor. If an

exception is not timely filed, the penalty becomes final. The Act

also provides, in the case of a conviction for a willful violation, for

a fine of up to $10,000; or, for a second offense committed after

the conviction of such person for a similar offense, for a fine of

not more than $10,000 and imprisonment for up to six months, or

both. The Secretary of Labor may also bring suit to obtain

injunctions to restrain persons from violating the Act.

Relation to State, Local and Other Federal Laws

Many states have child labor laws. When both this Act and a

state law apply, the law setting the higher standards must be

observed.

3. EMPLOYMENT ELIGIBILITY OF ALIEN WORKERS

Immigration and Nationality Act (INA) (8 U.S. Code, Section 1186).

Who is Covered

The Immigration and Nationality Act (INA) employment eligibility

verification and related nondiscrimination provisions apply to all

employers.

Basic Provisions/Requirements

Under the INA, employers may legally hire workers only if they

are citizens of the U.S. or aliens authorized to work in the United

States. For some aliens (students, nurses, "specialty

occupations," fashion models) employers must comply with

attestation procedures through the Department of Labor. The INA

requires that employers verify the employment eligibility of all

individuals hired after November 6, 1986. To do so, employers

must require applicants to show proof of their employment

eligibility, by requiring completion of the I-9 form. Employers must

keep I-9s on file for at least 3 years (or one year after

employment ends, whichever is greater).

The INA also protects U.S. citizens, and aliens authorized to

accept employment in the U.S., from discrimination in hiring or

discharge on the basis of national origin and citizenship status.

Assistance Available

More detailed information, including copies of explanatory

brochures and regulatory and interpretative materials, may be

obtained by contacting the offices listed beginning on page 53 in

the appendix.

Penalties

Employers who fail to complete and/or retain the I-9 forms are

subject to civil fines of up to $1,000 per applicant. Enforcement

of the INA requirements on employment eligibility verification

comes under the jurisdiction of the Immigration and

Naturalization Service (INS). The Justice Department is

responsible for enforcing the anti-discrimination provisions. In

conjunction with their ongoing enforcement efforts, the

Employment Standards Administration's Wage and Hour

Division and Office of Federal Contract Compliance Programs

conduct inspections of the I-9 forms. Their findings are reported

to the INS and to the Department of Justice where there is

apparent disparate treatment in the verification process.

Relation to State, Local and Other Federal Laws

Not Applicable.

4. OCCUPATIONAL SAFETY AND HEALTH

The Occupational Safety and Health Act of 1970 (OSH Act), 29

U.S.C. 651 et seq.; Title 29 Code of Federal Regulations, Parts

1900 to end.

Who is Covered

In general, coverage of the Act extends to all employers and their

employees in the 50 states, the District of Columbia, Puerto

Rico, and all other territories under federal government

jurisdiction. Coverage is provided either directly by the Federal

Occupational Safety and Health Administration (OSHA) or

through an OSHA-approved state job safety and health program.

As defined by the Act, an employer is any "person engaged in a

business affecting commerce who has employees, but does not

include the United States or any state or political subdivision of a

State." Therefore, the Act applies to employers and employees

in such varied fields as manufacturing, construction, longshoring,

agriculture, law and medicine, charity and disaster relief,

organized labor and private education. Such coverage includes

religious groups to the extent that they employ workers for

secular purposes.

The following are not covered by the Act:

Self-employed persons

Farms at which only immediate members of the farmer's family

are employed

Working conditions regulated by other federal agencies under

other federal statutes. This category includes most employment

in mining, nuclear energy and nuclear weapons manufacture, and

many segments of the transportation industries.

When another federal agency is authorized to regulate safety and

health working conditions in a particular industry, if it does not

do so in specific areas, then OSHA requirements apply.

As OSHA develops effective safety and health regulations of its

own, safety and health regulations originally issued under the

following laws administered by the Department of Labor are

superseded: the Walsh-Healey Act, the Service Contract Act, the

Contract Work Hours and Safety Standards Act, the Arts and

Humanities Act, and the Longshore and Harbor Workers'

Compensation Act.

Basic Provisions/Requirements

The Act assigns to OSHA two principal functions: setting

standards and conducting workplace inspections to assure

employers are complying with the standards and providing a

safe and healthful workplace. OSHA standards may require

conditions, or the adoption or use of one or more practices,

means, methods or processes reasonably necessary and

appropriate to protect workers on the job.

It is the responsibility of employers to become familiar with

standards applicable to their establishments, to eliminate

hazardous conditions to the extent possible, and to comply with

the standards. Compliance may include assuring that employees

have and use personal protective equipment when required for

safety or health. Employees must comply with all rules and

regulations that are applicable to their own actions and conduct.

Where OSHA has not promulgated a specific standard,

employers are responsible for complying with the OSH Act's

"general duty" clause. The general duty clause of the Act [Section

5(a)(1)] states that each employer "shall furnish . . . a place of

employment which is free from recognized hazards that are

causing or are likely to cause death or serious physical harm to

his employees."

States with OSHA-approved job safety and health programs

must set standards that are at least as effective as the equivalent

federal standard. Many state-plan states adopt standards

identical to the federal ones.

Federal OSHA Standards

These fall into four major categories: general industry (29 CFR

1910), construction (29 CFR 1926), maritime - shipyards, marine

terminals, longshoring - (29 CFR 1915-19), and agriculture (29

CFR 1928).

Each of these four categories of standards imposes

requirements that are, in some cases, identical for each category

of employers; in others, they are either absent or vary somewhat.

Among the standards that impose similar requirements on all

industry sectors are those for access to medical and exposure

records, personal protective equipment, and hazard

communication. Access to Medical and Exposure Records: This

standard requires that employers grant employees access to any

of their medical records maintained by the employer and to any

records the employer maintains on the employees' exposure to

toxic substances.

Personal Protective Equipment: This standard, included

separately in the standards for each industry segment (except

agriculture) requires that employers provide employees, at no

cost to employees, with personal protective equipment designed

to protect them against certain hazards. This can range from

protective helmets in construction and cargo handling work to

prevent head injuries, to eye protection, hearing protection, hard-

toed shoes, special goggles (for welders, for example) and

gauntlets for iron workers.

Hazard Communication: This standard requires that

manufacturers and importers of hazardous materials conduct a

hazard evaluation of the products they manufacture or import. If

the product is found to be hazardous under the terms of the

standard, containers of the material must be appropriately

labeled and the first shipment of the material to a new customer

must be accompanied by a material safety data sheet (MSDS).

Receiving employers must train their employees, using the

MSDSs they receive, to recognize and avoid the hazards the

materials present.

In general, however, all employers should be aware that any

hazard not covered by an industry-specific standard may be

covered by a general industry standard or by the general duty

clause. This coverage becomes important in the enforcement

aspects of OSHA's work.

Other types of requirements are imposed by regulation rather

than by a standard. OSHA regulations cover such items as

record-keeping, reporting and posting.

Record-keeping: Every employer covered by OSHA who has

more than 10 employees must maintain OSHA-specified records

of job-related injuries and illnesses. There are two such records,

the OSHA Form 200 and the OSHA Form 101.

The OSHA Form 200 is an injury/illness log, with a separate line

entry for each recordable injury or illness (essentially those

work-related deaths, injuries and illnesses other than minor

injuries that require only first aid treatment and that do not

involve medical treatment, loss of consciousness, restriction of

work or motion, or transfer to another job). A summary section of

the OSHA Form 200, which includes the total of the previous

year's injury and illness experience, must be posted in the

workplace for the entire month of February each year.

The OSHA Form 101 is an individual incident report that

provides added detail about each individual recordable injury or

illness. A suitable insurance or worker compensation form that

provides the same details may be substituted for the OSHA

Form 101.

Unless an employer has been selected in a particular year to be

part of a national survey of workplace injuries and illnesses

conducted by the Department of Labor's Bureau of Labor

Statistics (BLS), employers with ten or fewer employees or

employers in traditionally low-hazard industries are exempt from

maintaining these records; all employers selected for the BLS

survey must maintain the records. Employers so selected will be

notified before the end of the year to begin keeping records

during the coming year, and technical assistance on completing

these forms is available from the state offices which select these

employers for the survey.

Industries designated as traditionally low hazard include:

automobile dealers; apparel and accessory stores; furniture and

home furnishing stores; eating and drinking places; finance,

insurance, and real estate industries; and service industries,

such as personal and business services, legal, educational,

social and cultural services and membership organizations.

Reporting: In addition to selected employers each year being

required to report their injury and illness experience, each

employer, regardless of number of employees or industry

category, must report to the nearest OSHA office within 48 hours

any accident that results in one or more fatalities or

hospitalization of five or more employees. Such accidents are

often investigated by OSHA to determine whether violations of

standards contributed to the event.

Workplace Inspections

To enforce its standards, OSHA is authorized under the Act to

conduct workplace inspections. Every establishment covered by

the Act is subject to inspection by OSHA compliance safety and

health officers (CSHOs), who are chosen for their knowledge and

experience in the occupational safety and health field. CSHOs

are thoroughly trained in OSHA standards and in the recognition

of safety and health hazards. Similarly, states with their own

occupational safety and health programs conduct inspections

using qualified state CSHOs.

Employee Rights

Employees are granted several important rights by the Act.

Among them are the right to: complain to OSHA about safety and

health conditions in their workplace and have their identity kept

confidential from the employer, contest the time period OSHA

allows for correcting standards violations, and participate in

OSHA workplace inspections.

Anti-Discrimination Provisions

Private sector employees who exercise their rights under OSHA

can be protected against employer reprisal. Employees must

notify OSHA within 30 days of the time they learned of the

alleged discriminatory action. This notification is followed by an

OSHA investigation. If OSHA agrees that discrimination has

occurred, the employer will be asked to restore any lost benefits

to the affected employee. If necessary, OSHA can take the

employer to court. In such cases, the worker pays no legal fees.

Assistance Available

Copies of Standards

The Federal Register is one of the best sources of information

on standards, since all OSHA standards are published there

when adopted, as are all amendments, corrections, insertions or

deletions. The Federal Register, published five days a week, is

available in many public libraries. Annual subscriptions are

available from the Superintendent of Documents, U.S.

Government Printing Office (GPO), Washington, DC 20402. For

the current price, contact GPO at (202) 783-3238.

Each year the Office of the Federal Register publishes all current

regulations and standards in the Code of Federal Regulations

(CFR), available at many public libraries and from GPO. OSHA's

regulations and standards are collected in several volumes in

Title 29 CFR, Parts 1900-1999.

Since states with OSHA-approved job safety and health

programs adopt and enforce their own standards under state

law, copies of these standards can be obtained from the

individual states. Addresses and phone numbers are found

beginning on page 60 in the appendix.

Training and Education

OSHA's field offices (more than 70) are full-service centers

offering a variety of informational services such as publications,

technical advice, audio-visual aids on workplace hazards, and

lecturers for speaking engagements.

The OSHA Training Institute in Des Plaines, IL, provides basic

and advanced training and education in safety and health for

federal and state CSHOs; state consultants; other federal agency

personnel; and private sector employers, employees and their

representatives.Institute courses cover topics such as electrical

hazards, machine guarding, ventilation and ergonomics. The

Institute facility includes classrooms, laboratories, a library and

an audio-visual unit. The laboratories contain various

demonstrations and equipment, such as power presses,

woodworking and welding shops, a complete industrial

ventilation unit, and a noise demonstration laboratory. Sixty-three

courses are available for students from the private sector dealing

with subjects such as safety and health in the construction

industry and methods of voluntary compliance with OSHA standards.

OSHA also provides funds to nonprofit organizations to conduct

workplace training and education in subjects where OSHA

believes there is a current lack of workplace training. OSHA

identifies areas of unmet needs for safety and health education

in the workplace annually and invites grant applications to addre

ss these needs. The Training Institute is OSHA's point of contact

for learning about the many valuable training products and

materials developed under such grants.

Organizations awarded grants use funds to develop training and

educational programs, reach out to workers and employers for

whom their program is appropriate, and provide these programs

to employers and employees.

Grants are awarded annually, with a one-year renewal possible.

Grant recipients are expected to contribute 20 percent of the

totalgrant cost.

While OSHA does not provide grant materials directly, it will

provide addresses and phone numbers of contact persons from

whom the public can order such materials for its use. Contact the

OSHA Training Institute at (708) 297-4810.

Consultation Assistance

Consultation assistance is available to employers who want help

in establishing and maintaining a safe and healthful workplace.

Largely funded by OSHA, the service is provided at no cost to

the employer.

No penalties are proposed or citations issued for hazards

identified by the consultant.

The service is provided to the employer with the assurance that

his or her name and firm and any information about the

workplace will not be routinely reported to OSHA inspection staff.

Besides helping employers identify and correct specific hazards,

consultation can include assistance in developing and

implementing effective workplace safety and health programs

with emphasis on the prevention of worker injuries and illnesses.

Limited assistance such as training and education services, is

also provided away from the worksite.

Primarily targeted for smaller employers with more hazardous

operations, the consultation service is delivered by state

government agencies or universities employing professional

safety consultants and health consultants. When delivered at the

worksite, consultation assistance includes an opening conferenc

e with the employer to explain the ground rules for consultation, a

walk through the workplace to identify any specific hazards and

to examine those aspects of the employer's safety and health

program which relate to the scope of the visit, and a closing

conference followed by a written report to the employer of the

consultant's findings and recommendations.

This process begins with the employer's request for consultation

and the commitment to correct any serious job safety and health

hazards identified by the consultant. Possible violations of OSHA

standards will not be reported to OSHA enforcement staff unless

the employer fails or refuses to eliminate or control worker

exposure to any identified serious hazard or imminent danger

situation. In such unusual circumstances, OSHA may investigate

and begin enforcement action.

Employers who receive a comprehensive consultation visit,

correct all identified hazards, and demonstrate that an effective

safety and health program is in operation may be exempted from

OSHA general schedule enforcement inspections (not complaint

or accident investigations) for a period of one year.

Comprehensive consultation assistance includes an appraisal of

all work practices; mechanical, physical, and environmental

hazards in the workplace; and, all aspects of the employer's

present job safety and health program.

Additional information concerning consultation assistance,

including a directory of OSHA-funded consultation projects, can

be obtained by requesting OSHA publication No. 3047,

Consultation Services for the Employer.

Voluntary Protection Programs

The Voluntary Protection Programs (VPPs) represent one part of

OSHA's effort to extend worker protection beyond the minimum

required by OSHA standards. These programs, along with others

such as expanded on-site consultation services and full-service

area offices, are cooperative approaches which, when coupled

with an effective enforcement program, expand worker protection

to help meet the goals of the Occupational Safety and Health Act

of 1970.

The VPPs are designed to:

Recognize outstanding achievement of those who have

successfully incorporated comprehensive safety and health

programs into their total management system

Motivate others to achieve excellent safety and health results in

the same outstanding way

Establish a relationship between employers, employees, and

OSHA that is based on cooperation rather than coercion

OSHA reviews an employer's VPP application and conducts an

on-site review to verify that the safety and health program

described is in operation at the site. Evaluations are conducted

on a regular basis, annually for Merit and Demonstration

programs, and triennially for Star. All participants must send their

injury information annually to their OSHA regional office. Sites

participating in the VPP are not scheduled for programmed

inspections; however, any employee complaints, serious

accidents or significant chemical releases that may occur are

handled according to routine enforcement procedures.

An employer may make application for any VPP at the nearest

OSHA regional office. Once OSHA is satisfied that, on paper,

the employer qualifies for the program, an onsite review will be

scheduled. The review team presents its findings in a written

report for the company's review prior to submission to the

Assistant Secretary of Labor, who heads OSHA. If approved, the

employer receives a letter from the Assistant Secretary informing

the site of its participation in the VPP. A certificate of approval

and flag are presented at a ceremony held at or near the

approved worksite. Star sites receiving reapproval after each

triennial evaluation receive plaques at similar ceremonies.

The VPPs described are available in states under federal

jurisdiction. Some states with their own safety and health

programs have similar programs. Interested companies in these

states should contact the appropriate state agency for more

information (see list beginning on page 59).

Information Sources

Information about state programs, VPP, consultation programs,

and inspections can be obtained from the nearest OSHA field

office, or from one of the 10 regional OSHA offices listed,

beginning on page 63 in the appendix. The listing indicates the

states and territories under the jurisdiction of each regional

office. Area offices under regional office jurisdiction are listed in

local phone directories under U.S. Government listings for the

U.S Department of Labor.

Other Sources

A single free copy of an OSHA catalog, OSHA 2019, "OSHA

Publications and Audiovisual Programs," may be obtained by

mailing a self-addressed mailing label to the OSHA Publications

Office, Room N3101, US Department of Labor, Washington, DC

20210; telephone (202) 219-9667. Descriptions of and ordering

information for all OSHA publications and audiovisual programs

are contained in this catalog.

Questions about OSHA programs, the status of ongoing

standards-setting activities, and general inquiries about OSHA

may be addressed to the OSHA Office of Information &

Consumer Affairs, Room N3637, U.S. Department of Labor,

Washington, DC 2 0210;telephone (202) 219-8151.

Those who are interested in following OSHA activities more

closely may be interested in subscribing to OSHA's official

magazine, Job Safety & Health Quarterly. Subscription orders

may be placed with the Superintendent of Documents,

Government Printing Office, Washington, DC 20402; telephone

(202) 783-3238. Orders by phone maybe charged to VISA or

MASTERCARD. Written orders should be accompanied by a

check or money order made payable to "Superintendent of

Documents" in the amount of $5.50 (international orders add 25%).

Penalties

These are the types of violations that may be cited and the

penalties that may be proposed:

Other-Than-Serious Violation: A violation that has a direct

relationship to job safety and health, but probably would not

cause death or serious physical harm. A proposed penalty of up

to $7,000 for each violation is discretionary. A penalty for an

other-than-serious violation may be adjusted downward by as

much as 95 percent, depending on the employer's good faith

(demonstrated efforts to comply with the Act), history of previous

violations, and size of business. When the adjusted penalty

amounts to less than $50, no penalty is proposed.

Serious Violation: A violation where there is substantial

probability that death or serious physical harm could result and

that the employer knew, or should have known, of the hazard. A

mandatory penalty of up to $7,000 for each violation is proposed.

A penalty for a serious violation may be adjusted downward,

based on the employer's good faith, history of previous

violations, the gravity of the alleged violation, and size of

business. Willful Violation: A violation that the employer

intentionally and knowingly commits. The employer either knows

that what he or she is doing constitutes a violation, or is aware

that a hazardous condition existed and has made no reasonable

effort to eliminate it.

The Act provides that an employer who willfully violates the Act

may be assessed a civil penalty of not more than $70,000 but not

less than $5,000 for each violation. A proposed penalty for a

willful violation may be adjusted downward, depending on the

size of the business and its history of previous violations. Usually

no credit is given for good faith.

If an employer is convicted of a willful violation of a standard

that has resulted in the death of an employee, the offense is

punishable by a court-imposed fine or by imprisonment for up to

six months, or both. A fine of up to $250,000 for an individual, or

$500,000 for a corporation [authorized under the

Comprehensive Crime Control Act of 1984 (1984 CCA), not the

OSH Act], may be imposed for a criminal conviction.

Repeated Violation: A violation of any standard, regulation, rule

or order where, upon reinspection, a substantially similar

violation is found. Repeated violations can bring a fine of up to

$70,000 for each such violation. To be the basis of a repeat

citation, the original citation must be final; a citation under

contest may not serve as the basis for a subsequent repeat

citation.

Failure to Correct Prior Violation: Failure to correct a prior

violation may bring a civil penalty of up to $7,000 for each day

the violation continues beyond the prescribed abatement date.

Additional violations for which citations and proposed penalties

may be issued are as follows:

Falsifying records, reports or applications upon conviction can

bring a fine of $10,000 or up to six months in jail, or both

Violations of posting requirements can bring a civil penalty of up

to $7,000

Assaulting a compliance officer, or otherwise resisting,

opposing, intimidating, or interfering with a compliance officer in

the performance of his or her duties is a criminal offense, subject

to a fine of not more than $250,000 for an individual and

$500,000 for a corporation (1984 CCA) and imprisonment for

not more than three years

Citation and penalty procedures may differ somewhat in states

with their own occupational safety and health programs.

Appeals Process

Appeals by Employees: If an inspection was initiated due to an

employee complaint, the employee or authorized employee

representative may request an informal review of any decision

not to issue a citation.

Employees may not contest citations, amendments to citations,

penalties or lack of penalties. They may contest the time in the

citation for abatement of a hazardous condition. They also may

contest an employer's Petition for Modification of Abatement

(PMA) which requests an extension of the abatement period.

Employees mus tcontest the PMA within 10 working days of its

posting or within 10 working days after an authorized employee

representative has received a copy.

Within 15 working days of the employer's receipt of the citation,

the employee may submit a written objection to OSHA. The

OSHA area director forwards the objection to the Occupational

Safety and Health Review Commission, which operates

independently of OSHA. Employees may request an informal

conference with OSHA to discuss any issues raised by an

inspection, citation, notice of proposed penalty or employer's

notice of intention to contest.

Appeals by Employers: When issued a citation or notice of a

proposed penalty, an employer may request an informal meeting

with OSHA's area director to discuss the case. Employee

representatives may be invited to attend the meeting. The area

director is authorized to enter into settlement agreements that

revise citations and penalties to avoid prolonged legal disputes.

Petition for Modification of Abatement (PMA): Upon receiving a

citation, the employer must correct the cited hazard by the

prescribed date unless he or she contests the citation or

abatement date. If factors beyond the employer's reasonable

control prevent the completion of corrections by that date, the

employer who has made a good faith effort to comply may file a

PMA for an extended date.

The written petition should specify all steps taken to achieve

compliance, the additional time needed to achieve complete

compliance, the reasons this additional time is needed, and all

temporary steps being taken to safeguard employees against

the cited hazard during the intervening period. It should also

indicate that a copy of the PMA was posted in a conspicuous

place at or near each place where a violation occurred, and that

the employee representative (if there is one) received a copy of

the petition. Notice of Contest: If the employer decides to contest

either the citation, the time set for abatement, or the proposed

penalty, he or she has 15 working days from the time the citation

and proposed penalty are received in which to notify the OSHA

area director in writing. An orally expressed disagreement will

not suffice. This written notification is called a "Notice of

Contest."

There is no specific format for the Notice of Contest; however, it

must clearly identify the employer's basis for contesting the

citation, notice of proposed penalty, abatement period, or

notification of failure to correct violations.

A copy of the Notice of Contest must be given to the employees'

authorized representative. If any affected employees are not

represented by a recognized bargaining agent, a copy of the

notice must be posted in a prominent location in the workplace,

or else served personally upon each unrepresented employee.

Appeal Review Procedure

If the written Notice of Contest has been filed within the required

15 working days, the OSHA area director forwards the case to

the Occupational Safety and Health Review Commission

(OSHRC). The Commission is an independent agency not

associated with OSHA or the Department of Labor. The

Commission assigns the case to an administrative law judge.

The judge may disallow the contest if it is found to be legally

invalid, or a hearing may be scheduled for a public place near

the employer's workplace. The employer and the employees

have the right to participate in the hearing; the OSHRC does not

require that they be represented by attorneys.

Once the administrative law judge has ruled, any party to the

case may request a further review by OSHRC. Any of the three

OSHRC commissioners also may, at his or her own motion,

bring a case before the Commission for review. Commission

rulings may be appealed to the appropriate U.S. Court of

Appeals.

Appeals In State-Plan States

States with their own occupational safety and health programs

have a state system for review and appeal of citations, penalties,

and abatement periods. The procedures are generally similar to

Federal OSHA's, but cases are heard by a state review board or

equivalent authority.

Relation to State, Local and Other Federal Laws

As discussed above in the section titled "Who is Covered,"

Federal OSHA has jurisdiction over workplace safety and health

issues in all states that do not operate their own OSHA-approved

programs. In fact, any occupational safety and health issues

regulated by a state that does not have an OSHA-approved

program are preempted by OSHA jurisdiction.

The agency also covers all working conditions that are not

covered by safety and health regulations of some other federal

agency under other legislation. Industries where such regulations

frequently apply include most transportation industries (rail, air

and highway safety are under the Department of Transportation),

nuclear industries (covered either by the Department of Energy

or the Nuclear Regulatory commission) and mining (covered by

the Department of Labor's Mine Safety and Health

Administration, and discussed elsewhere in this publication).

OSHA also has the authority to monitor the safety and health of

federal employees.

5. EMPLOYEE BENEFIT PLANS

Employee Retirement Income Security Act (ERISA), 29 USC

§1001 et seq., 29 CFR §2509 et seq.

Who is Covered

The provisions of Title I of ERISA are intended to require

compliance from most private sector employee benefit plans.

Employee benefit plans are voluntarily established and

maintained by an employer, an employee organization, or jointly

by one or more such employers and the employee organization.

Employee benefit plans which are pension plans are established

and maintained to provide retirement income or to defer income

to termination of covered employment or beyond. Employee

benefit plans which are welfare plans are established and

maintained to provide, through insurance or otherwise, health

benefits, disability benefits, death benefits, prepaid legal

services, vacation benefits, day care centers, scholarship funds,

apprenticeship and training benefits, or other similar benefits.

In general, ERISA does not cover plans established or

maintained by governmental entities or churches for their

employees, or plans which are maintained solely to comply with

applicable workers compensation, unemployment or disability

laws. ERISA also does not cover plans maintained outside the

United States primarily for the benefit of nonresident aliens or

unfunded excess benefit plans.

Basic Provisions/Requirements

ERISA sets uniform minimum standards to assure the equitable

character of employee benefit plans and their financial

soundness to provide workers with benefits promised by their

employers. In addition, employers have an obligation to provide

promised benefits and satisfy ERISA's requirements on

managing and administering private pension and welfare plans.

The Department's Pension and Welfare Benefits Administration

(PWBA), together with the Internal Revenue Service (IRS),

carries out its statutory and regulatory authority to assure that

workers receive the promised benefits. The Department has

principal jurisdiction over Title I of ERISA, which requires

persons and entities who manage and control plan funds to:

Carry out their duties in a prudent manner and refrain from

conflict-of-interest transactions expressly prohibited by law, for

the exclusive benefit of participants and beneficiaries

Comply with limitations on certain plans' investments in employer

securities and properties

Fund benefits in accordance with the law and plan rules

Report and disclose information on the operations and financial

condition of plans to the government and participants

Provide documents required in the conduct of investigations to

assure compliance with the law

The IRS administers Title II of ERISA, which includes vesting

participation, discrimination and funding standards.

Reporting and Disclosure

Part 1 of Title I requires the administrator of an employee benefit

plan to furnish participants and beneficiaries with a summary

plan description (SPD), describing in understandable terms,

their rights, benefits and responsibilities under the plan. Plan

administrators are also required to furnish participants with a

summary of any material changes to the plan or changes to the

information contained in the summary plan description.

Generally, copies of these documents must be filed with the

Department.

In addition, the administrator must file an annual report (Form

5500 Series) each year containing financial and other

information concerning the operation of the plan. Plans with 100

or more participants must file the Form 5500. Plans with fewer

than 100 participants file the Form 5500-C at least every third

year and may file a Form 5500-R, an abbreviated report, in the

two intervening years. The forms are filed with the Internal

Revenue Service, which furnishes the information to the

Department of Labor. Welfare benefit plans with fewer than 100

participants that are fully insured or unfunded (i.e., benefits are

provided exclusively through insurance contracts where the

premiums are paid directly from the general assets of the

employer or the benefits are paid from the general assets of the

employer) are not required to file an annual report under

regulations issued by the Department. Plan administrators must

furnish participants and beneficiaries with a summary of the

information in the annual report.

The Department 's regulations governing reporting and

disclosure requirements are set forth at 29 CFR §2520.101-1 et seq.

Fiduciary Standards

Part 4 sets forth standards and rules governing the conduct of

plan fiduciaries. In general, persons who exercise discretionary

authority or control regarding management of a plan or

disposition of its assets are "fiduciaries" for purposes of Title I of

ERISA. Fiduciaries are required, among other things, to

discharge their duties solely in the interest of plan participants

and beneficiaries and for the exclusive purpose of providing

benefits and defraying reasonable expenses of administering the

plan. In discharging their duties, fiduciaries must act prudently

and in accordance with documents governing the plan, to the

extent such documents are consistent with ERISA. Certain

transactions between an employee benefit plan and "parties in

interest," which include the employer and others who may be in a

position to exercise improper influence over the plan, are

prohibited by ERISA. Most of these transactions are also

prohibited by the Internal Revenue Code ("Code"). The Code

imposes an excise tax on "disqualified persons" -- whose

definition generally parallels that of parties in interest

-- who participate in such transactions.

Exemptions

Both ERISA and the Code contain various statutory exemptions

from the prohibited transaction rules and give the Departments of

Labor and Treasury, respectively, authority to grant

administrative exemptions and establish exemption procedures.

Reorganization Plan No. 4 of 1978 transferred the authority of the

Treasury Department over prohibited transaction exemptions,

with certain exceptions, to the Labor Department.

The statutory exemptions generally include loans to participants,

the provision of services necessary for operation of a plan for

reasonable compensation, loans to employee stock ownership

plans, and investment with certain financial institutions regulated

by other State or Federal agencies. (See ERISA section 408 for

the conditions of the exemptions.) Administrative exemptions

may be granted by the Department on a class or individual basis

for a wide variety of proposed transactions with a plan.

Applications for individual exemptions must include, among other

information:

Percentage of assets involved in the exemption transaction

The names of persons with investment discretion

Extent of plan assets already invested in loans to, property

leased by, and securities issued by parties in interest involved in

he transaction Copies of all contracts, agreements, instruments

and relevant portions of plan documents and trust agreements

bearing on the exemption transaction

Information regarding plan participation in pooled funds when the

exemption transaction involves such funds

Declaration, under penalty of perjury by the applicant, attesting

to the truth of representations made in such exemption

submissions Statement of consent by third-party experts

acknowledging that their statement is being submitted to the

Department as part of an exemption application

The Department's exemption procedures are set forth at 29 CFR

§2570.30 through 2570.51.

Enforcement

ERISA imposes substantial law enforcement responsibilities on

the Department. Part 5 of ERISA Title I gives the Department

authority to bring a civil action to correct violations of the law,

gives investigative authority to determine whether any person

has violated Title I, and imposes criminal penalties on any

person who willfully violates any provision of Part 1 of Title V.

Continuation Health Coverage

Continuation health care provisions were enacted as part of the

Consolidated Omnibus Budget Reconciliation Act of 1985

(COBRA).

These provisions cover group health plans of employers with 20

or more employees on a typical working day in the previous

calendar year. COBRA gives participants and beneficiaries an

election to maintain at their own expense coverage under their

health plan at a cost that is comparable to what it would be if they

were still members of the employer's group. Employers and plan

administrators have an obligation to determine specific rights of

beneficiaries with respect to election, notification and type of

coverage options. (See 29 USC §§1161 through 1168). Plans

must give covered individuals an initial general notice informing

them of their rights under COBRA and describing the law. Plan

administrators are required to provide specific notices when

certain events occur. In most instances of employee death,

termination, reduced hours of employment, entitlement to

Medicare, or bankruptcy, it becomes the employer's

responsibility to provide a specific notice to the plan

administrator.

The Department has limited regulatory and interpretative

jurisdiction over COBRA provisions. Its responsibility includes

the COBRA notification and disclosure provisions.

Jurisdiction of the Internal Revenue Service

The IRS has regulatory and interpretative responsibility for all

provisions of COBRA not under DOL's jurisdiction. (See IRS

proposed regulations in the Federal Register of June 14, 1987

(52 FR 22716).) In addition, ERISA provisions relating to

participation, vesting, funding and benefit accrual, contained in

parts 2 and 3 of Title I, are generally administered and

interpreted by the Internal Revenue Service.

Assistance Available

PWBA has numerous general publications designed to assist

employers and employees in understanding their obligations and

rights under ERISA. Publications -- a listing of PWBA booklets

and pamphlets -- is available by writing to: Publications Desk,

PWBA, Division of Public Affairs, Room N-5511, 200

Constitution Ave., NW, Washington, DC 20210.

In addition, employee benefit plan documents and other

materials are available from the PWBA Public Disclosure Room.

This facility may be used to view and to obtain copies of

materials on file. Materials include: summary plan descriptions,

Form 5500 Series reports, Master Trust reports, 103-12

Investment Entity Reports, Common or Collective Trust or Pooled

Separate Account direct filings, Apprentice and Other Training

Plans notices, "Top Hat" plan statements, advisory opinions,

announcements and transcripts of public hearings and

proceedings.

The PWBA Public Disclosure Room is open to the public

Monday through Friday, from 8:30 a.m. to 4:30 p.m. Copies of

materials are available at a cost of 15 cents per page by

ordering in person or writing to: PWBA Public Disclosure Room,

U.S. Department of Labor, Room N-5507, 200 Constitution Ave.,

NW, Washington, DC 20210. Given the complexity of ERISA

requirements, employers may seek the assistance of an

attorney, CPA firm, investment or brokerage firm, and other

employee benefit consultants in complying with the law.

Penalties

PWBA has authority to assess civil penalties for reporting

violations and prohibited transactions involving a plan under

ERISA Section 502(c). A penalty of up to $1,000 per day may be

assessed against plan administrators who fail to or refuse to

comply with annual reporting requirements. Section 502(i) gives

the agency authority to assess civil penalties against parties in

interest who engage in prohibited transactions with welfare and

nonqualified pension plans. The penalty can range from five

percent to 100 percent of the amount involved in a transaction. A

parallel provision of the Code directly imposes an excise tax

against disqualified persons, including employee benefit plan

sponsors and service providers, who engage in prohibited

transactions with tax-qualified pension and profit sharing plans.

Finally, the Department is required under Section 502(l) to

assess mandatory civil penalties equal to 20 percent of any

amount recovered with respect to fiduciary breaches resulting

from either a settlement agreement with the Department or a

court order as the result of a lawsuit by the Department.

Relation to State, Local and Other Federal Laws

Part 5 of Title I provides that the provisions of ERISA Titles I

and IV supersede state and local laws which "relate to" an

employee benefit plan. ERISA, however, saves certain state and

local laws from ERISA preemption, including certain exceptions

for state insurance regulation of multiple employer welfare

arrangements (MEWAs). MEWAs generally constitute employee

welfare benefit plans or other arrangements providing welfare

benefits to employees of more than one employer, not pursuant

to a collective bargaining agreement.

In addition, ERISA's general prohibitions against assignment or

alienation of pension benefits does not apply to qualified

domestic relations orders. These orders must be made pursuant

to state domestic relations law and award all or part of a

participant's benefit in the form of child support, alimony, or

marital property rights to an alternative payee (spouse, former

spouse, child or other dependent). Plan administrators must

comply with the terms of such orders.

6. WHISTLEBLOWER PROTECTION

Employee Protection (Whistleblower) Provisions -- Clean Air Act

(Title 42 U.S. Code, Section 7622); Comprehensive

Environmental Response, Compensation and Liability Act (Title

42 U.S. Code, Section 9610); Energy Reorganization Act of

1974 (Title 42 U.S. Code, Section 5851); Safe Drinking Water

Act (Title 42 U.S. Code, Section 300j-9(i)); Solid Waste

Disposal Act (Title 42 U.S. Code, Section 6971); Toxic

Substances Control Act (Title 15 U.S. Code, Section 2622);

Federal Water Pollution Control Act (Title 33 U.S. Code, Section

1367); 29 CFR 24).

Who is covered

These environmental Acts provide protection from discharge or

other discriminatory actions by employers in retaliation for

employees' good faith complaints about safety and health

hazards in the workplace. The Acts cover all private sector

employers.

Basic Provisions/Requirements

The employee protection provisions of these Acts prohibit

employers from discharging or otherwise discriminating against

employees in retaliation for their disclosure of safety and health

hazards to the employer or to the appropriate federal agency.

They also protect employee participation in formal government

proceedings in connection with safety and health hazards. The

Acts specifically exclude from protection the disclosure of

hazards deliberately caused by an employee. Additionally, the

statutes do not protect "frivolous" complaints. Employees have

the right under the Acts to refuse to work in hazardous or unsafe

situations.

Employees who believe they have been discriminated against in

violation of these protective provisions may file a complaint,

within 30 days of the alleged violation, with the Employment

Standards Administration's Wage and Hour Division.

Assistance Available

More detailed information, including copies of explanatory

brochures and regulatory and interpretative materials, may be

obtained by contacting the offices listed beginning on page 53 in

the appendix.

Penalties

Upon receipt of a complaint, the Wage and Hour Division

conducts an investigation to determine whether a violation has

occurred. When a violation has occurred, the employer is notified

of the violation determination and efforts are made to conciliate

the situation. The employer may appeal a violation determination

to an administrative law judge, if done within 5 calendar days of

the notification of the determination. The administrative law

judge's decision is referred to the Secretary of Labor for a final

order. The Secretary may affirm or set aside the administrative

law judge's decision. Where the Secretary concludes that a

violation has occurred, his/her final order may instruct the

employer to take affirmative action to abate the violation and

provide for appropriate relief, which may include restoration of

back pay, employment status and benefits. The Secretary may

also order the employer to provide compensatory damages to

the employee. If dissatisfied with the Secretary's decision, the

employer may appeal in federal court. Final determinations on

violations are enforceable through the courts. The employee is

entitled to similar appeal rights under the Acts.

Relation to State, Local and Other Federal Laws

The current whistleblower programs do not preempt existing

state statutes and common law claims. All provisions contained

in the programs are in addition to protection provided by state laws.

7. VETERANS

Veterans' Reemployment Rights Act (VRR).

Who is Covered

VRR applies to persons who are inducted into the Armed

Forces, to persons who volunteer directly for active duty and to

Reservists and members of the National Guard who are called to

active duty either voluntarily or involuntarily. In addition, VRR

covers members of the Reserves and National Guard during

initial active duty training, active duty for training and inactive duty

training.

Basic Provisions/Requirements

Veterans returning from active duty must meet the following five

eligibility requirements to be covered by VRR:

Held an "other than temporary" (not necessarily "permanent") civilian

job

Left the civilian job for the purpose of going on active duty

Did not remain on active duty longer than 4 years, unless the

period beyond 4 years (up to an additional year) was "at the

request and for convenience of the Federal Government"

Was discharged or released from active duty "under honorable

conditions"

Applied for reemployment with the pre-service employer or

successor in interest within 90 days after separation from active

duty Eligible veterans are entitled to reinstatement within a

reasonable time to a position of like seniority, status and pay. In

addition, the returning veterans do not step back on the seniority

escalator at the point they stepped off. Rather the veterans step

back on at the precise point that they would have occupied had

they kept the position continuously during the military service.

VRR provides that a reservist or member of the National Guard

shall upon request be granted a leave of absence by such

person's employer to perform active duty training or inactive duty

training and that the employee shall not be denied retention in

employment or any promotion or other incident or advantage of

employment because of any obligation as a member of a

Reserve component of the Armed Forces. In addition, while the

employer is not required to pay the Reservist or National Guard

member for the hours or days not worked because of military

training obligations, it is unlawful to require the employee to use

earned vacation time for military training.

A person who leaves a civilian job in order to perform active duty

is not required to request a leave of absence or even to notify the

employer that military service is the reason for leaving the job,

although such a person is encouraged to provide the employer

with as much information as possible. However, a Reservist or

member of the National Guard must request a leave of absence

when leavin g thecivilian job to perform active duty training or

inactive duty training.

VRR is enforced by DOL's Veterans' Employment and Training

Service (VETS).

Assistance Available

VETS has published two fact sheets covering the veteran

reemployment and job rights. These are OASVET 90-09 entitled

"Job Rights for Reservists and Members of the National Guard"

and OAVET 90-10 entitled "Reemployment Rights for Returning

Veterans." Copies of these and other VETS' publications or

answers to questions on VRR may be obtained from the nearest

VETS office, as listed beginning on page 67 in the appendix.

Penalties

Not Applicable.

Relation to State, Local and Other Federal Laws

The VRR does not preempt state laws providing greater or

additional rights, but it does preempt state laws providing lesser

rights or imposing additional eligibility criteria.

8. PLANT CLOSINGS AND MASS LAYOFFS

Worker Adjustment and Retraining Notification (WARN) Act, 29

U.S.C. 2101 et seq.; 20 CFR Part 639.

Who is Covered

In general, employers are covered by WARN if they have 100 or

more employees, not counting employees who have worked less

than 6 months in the last 12 months and not counting employees

who work an average of less than 20 hours a week. Regular

federal, state and local government entities which provide public

services are not covered. Employees entitled to notice under

WARN include hourly and salaried workers, as well as

managerial and supervisory employees.

Basic Provisions/Requirements

WARN requires employers to provide notice 60 days in advance

of covered plant closings and covered mass layoffs. This notice

must be provided to affected workers or their representatives

(e.g., a labor union), to the state dislocated worker unit, and to

the appropriate local government.

A covered plant closing occurs when a facility or operating unit is

shut down for more than 6 months, and 50 or more workers lose

their jobs as a result during a 30-day period. A covered mass

layoff occurs when a layoff of 6 months or longer affects 500 or

more workers, or 33 percent or more of the employer's workforce

when the layoffs affect between 50 and 499 workers. The number

of affected workers is the total number laid off during a 30-, or in

some cases 90-, day period.

WARN does not apply to the closing of temporary facilities, or

the completion of an activity when the workers were hired only for

the duration of that activity. WARN also provides for less than 60

days notice when the layoffs were the result of the closing a

faltering company, unforeseeable business circumstances, or a

natural disaster.

Assistance Available

The Department of Labor has published a pamphlet entitled "A

Guide to Advance Notice of Closings and Layoffs," which

describes the Worker Adjustment and Retraining Notification

Act. Requests for copies of the pamphlet, or general questions

on the regulations, may be addressed to:

U.S. Department of Labor

Employment and Training Administration

Office of Work-Based Learning

Room N-4469

200 Constitution Avenue, N.W. Washington, DC 20210

(202) 219-5577 (not a toll-free number)

The Department, since it does not have administrative or

enforcement authority under WARN, cannot provide specific

advice or guidance with respect to individual situations.

Penalties

An employer who violates the WARN provisions is liable to each

employee for an amount equal to back pay and benefits for the

period of the violation, up to 60 days. This may be reduced by

the period of any notice that was given, and any voluntary

payments made by the employer to the employee.

An employer who fails to provide the required notice to the unit of

local government is subject to a civil penalty not to exceed $500

for each day of violation. This may be avoided if the employer

satisfies the liability to each employee within 3 weeks after the

closing or layoff.

Enforcement of WARN requirements is through the United States

district courts. Workers, or their representatives, and units of

local government may bring individual or class action suits. The

Court may allow reasonable attorney's fees as part of any final

judgement.

Relation to State, Local and Other Federal Laws

WARN is in addition to, and does not preempt any other federal,

state or local law, or any employer/employee agreement which

requires other notification or benefit.

9. LIE DETECTOR TESTS

Employee Polygraph Protection Act of 1988 (29 U.S. Code,

Section 2001 et seq.; 29 CFR Part 801).

Who is Covered

The Employee Polygraph Protection Act (EPPA) applies to most

private employers. Federal, state and local governments are not

covered by the law.

Basic Provisions/Requirements

The EPPA prohibits most private employers from using lie

detector tests either for pre-employment screening or during the

course of employment.

Employers are generally prohibited from requiring or requesting

any employee or job applicant to take a lie detector test, and

from discharging, disciplining, or discriminating against an

employee or prospective employee for refusing to take a test or

for exercising other rights under the Act. Employers may not use

or inquire about the results of a lie detector test or discharge or

discriminate against an employee, a prospective employee, or a

former employee for refusal to take a test, on the basis of the

results of a test, or for filing a complaint, or participating in a

proceeding under the Act.

The Act permits polygraph (a type of lie detector) tests to be

administered, subject to restrictions, to certain prospective

employees of security service firms (armored car, alarm, and

guard), and of pharmaceutical manufacturers, distributors and

dispensers.

The Act also permits polygraph testing, subject to restrictions, of

certain employees of private firms who are reasonably

suspected of involvement in a workplace incident (theft,

embezzlement, etc.) that resulted in specific economic loss or

injury to the employer. Where polygraph examinations are

permitted, they are subject to strict standards concerning the

conduct of the test, including the pretest, testing and post-testing

phases. An examiner must also be licensed and bonded or have

professional liability coverage. The Act strictly limits the

disclosure of information obtained during a polygraph test.

Assistance Available

The Act is administered and enforced by the Employment

Standards Administration's Wage and Hour Division. More

detailed information, including copies of explanatory brochures

and regulatory and interpretative materials, may be obtained by

contacting the offices listed beginning on page 53 in the

appendix.

Penalties

The Secretary of Labor can bring court action to restrain violators

and assess civil money penalties up to $10,000 per violation

against violators. Employers who violate the law may be liable to

the employee or prospective employee for legal and equitable

relief, including employment, reinstatement, promotion and

payment of lost wages and benefits. Any person against whom a

civil money penalty is assessed may, within 30 days of the notice

of assessment, request a hearing before an administrative law

judge. If dissatisfied with the administrative law judge's decision,

such person may request a review of the decision by the

Secretary of Labor. Final determinations on violations are

enforceable through the courts.

Relation to State, Local and Other Federal Laws

The law does not preempt any provision of any state or local law

or any collective bargaining agreement which is more restrictive

with respect to lie detector tests.

10. WAGE GARNISHMENT

Title III, Consumer Credit Protection Act (15 U.S. Code, Sections

1671 et seq; 29 CFR 870).

Who is Covered

Title III of the Consumer Credit Protection Act (CCPA) protects

employees from being discharged by their employers because

of garnishment for any one indebtedness and limits the amount

of employees' earnings which may be garnished in any one

week. Title III applies to all individuals who receive personal

earnings and to their employers. Personal earnings include

wages, salaries, commissions, bonuses and income from a

pension or retirement program but does not ordinarily include

tips. The law applies in all 50 states, the District of Columbia,

Puerto Rico and all U.S. territories and possessions.

Basic Provisions/Requirements

Wage garnishment is a legal procedure through which the

earnings of an individual are required by court order to be

withheld by an employer for the payment of a debt. Title III

prohibits an employer from discharging an employee whose

earnings have been subject to garnishment for any one debt,

regardless of the number of levies made or proceedings brought

to collect it. It does not, however, protect an employee from

discharge if the employee's earnings have been subject to

garnishment for a second or subsequent debts.

Title III also protects employees by limiting the amount of their

earnings that may be garnished in any workweek or pay period

to the lesser of 25 percent of disposable earnings or the amount

by which disposable earnings are greater than 30 times the

federal minimum hourly wage prescribed by section 6(a)(1) of

the Fair Labor Standards Act of 1938. This limit applies

regardless of the number of garnishment orders received by an

employer. The federal minimum wage is $4.25 per hour.

In court orders for child support or alimony, Title III allows up

to 50 percent of an employee's disposable earnings to be

garnished if the employee is supporting another spouse or child,

and up to 60 percent for an employee who is not. An additional 5

percent may be garnished for support payments which are more

than 12 weeks in arrears.

"Disposable earnings" is the amount of employee earnings left

after legally required deductions have been made for federal,

state and local taxes, Social Security, unemployment insurance

and state employee retirement systems. Other deductions which

are not required by law, e.g., union dues, health and life

insurance, and charitable contributions, are not subtracted from

gross earnings when calculating the amount of disposable

earnings for garnishment purposes.

Title III specifies that garnishment restrictions do not apply to

bankruptcy court orders and debts due for federal and state

taxes. Nor does it affect voluntary wage assignments, i.e.,

situations in which workers voluntarily agree that their employers

may turn over some specified amount of their earnings to a

creditor or creditors.

Assistance Available

Title III is administered and enforced by the Employment

Standards Administration's Wage and Hour Division. More

detailed information, including copies of explanatory brochures

and regulatory and interpretative materials, may be obtained by

contacting the offices listed beginning on page 53 in the

appendix.

Penalties

Violations of Title III may result in the reinstatement of a

discharged employee, with back pay, and the correction of

improper garnishment amounts. Where violations cannot be

resolved through informal means, court action may be initiated to

restrain and remedy violations. Employers who willfully violate the

discharge provisions of the law may be prosecuted criminally

and fined up to $1,000, or imprisoned for not more than one

year, or both.

Relation to State, Local and Other Federal Laws

If a state wage garnishment law differs from Title III, the law

resulting in the smaller garnishment, or prohibiting the discharge

of any employee because his or her earnings have been subject

to garnishment for more than one indebtedness must be

observed.

APPENDIX

Wage and Hour Division

National Office

Office of Program Operations

Wage and Hour Division

Employment Standards Administration

U.S. Department of Labor, Room S-3028

200 Constitution Ave., N.W.

Washington, D.C. 20210

(202) 219-8353

Division of Farm Labor, Child Labor, and Polygraph Standards

Wage and Hour Division

Employment Standards Administration

U.S. Department of Labor, Room S-3510

200 Constitution Ave., N.W.

Washington, D.C. 20210

(202) 219-4670

Division of Contract Standards Operations

Wage and Hour Division

Employment Standards Administration

U.S. Department of Labor, Room S-3018

200 Constitution Ave., N.W.

Washington, D.C. 20210

(202) 219-7541

Division of Fair Labor Standards Act Operations

Wage and Hour Division

Employment Standards Administration

U.S. Department of Labor, Room S-3516

200 Constitution Ave., N.W.

Washington, D.C. 20210

(202) 219-1407

Division of Wage Determinations

Wage and Hour Division

Employment Standards Administration

U.S. Department of Labor, Room S-3014

200 Constitution Ave., N.W.

Washington, D.C. 20210

(202) 219-7531

Regional Administrators

Wage and Hour Division

Employment Standards Administration

U.S. Department of Labor, Room 750

201 Varick St.

New York, New York 10014

(212) 337-2000

Wage and Hour Division

Employment Standards Administration

U.S. Department of Labor, Room 662

1375 Peachtree St., N.E.

Atlanta, Georgia 30367

(404) 347-4801

Wage and Hour Division

Employment Standards Administration

U.S. Department of Labor

Federal Building, S. 800

525 S. Griffin St.

Dallas, Texas 75202

(214) 767-6894

Wage and Hour Division

Employment Standards Administration

U.S. Department of Labor

Federal Office Building

1801 California St., S. 930

Denver, Colorado 80202-2614

(303) 391-6780

Wage and Hour Division

Employment Standards Administration

U.S. Department of Labor

1111 Third Ave., S. 600

Seattle, Washington 98101

(206) 553-1914

Wage and Hour Division

Employment Standards Administration

U.S. Department of Labor

One Congress St., 11th Fl.

Boston, Massachusetts 02114

(617) 565-2066

Wage and Hour Division

Employment Standards Administration

U.S. Department of Labor, Room 15230

Gateway Building

3535 Market St.

Philadelphia, Pennsylvania 19104

(215) 596-1185

Wage and Hour Division

Employment Standards Administration

U.S. Department of Labor, Room 820

230 South Dearborn St.

Chicago, Illinois 60604

(312) 353-7280

Wage and Hour Division

Employment Standards Administration

U.S. Department of Labor

Federal Office Building, Room 2000

911 Walnut St.

Kansas City, Missouri 64106

(816) 426-5381

Wage and Hour Division

Employment Standards Administration

U.S. Department of Labor, S. 930

71 Stevenson St.

San Francisco, California 94105

(415) 744-6645

Office of Federal Contract Compliance Programs

OFCCP/ESA

U.S. Department of Labor

200 Constitution Ave., N.W.

Washington, DC 20210

(202) 219-9475

OFCCP/ESA

U.S. Department of Labor

One Congress St., 11th Fl.

Boston, MA 02114

(617) 565-2055

OFCCP/ESA

U.S. Department of Labor

201 Varick St., Room 750

New York, NY 10014

(212) 337-2006

OFCCP/ESA

U.S. Department of Labor

Gateway Building, Room 15340

3535 Market St.

Philadelphia, PA 19104

(215) 596-6168

OFCCP/ESA

U.S. Department of Labor, S. 678

1375 Peachtree St., N.E.

Atlanta, GA 30367

(404) 347-3200

OFCCP/ESA

U.S. Department of Labor

New Federal Building, Room 570

230 South Dearborn St.

Chicago, IL 60604

(312) 353-0335

OFCCP/ESA

U.S. Department of Labor

Federal Building, Room 840

525 South Griffin St.

Dallas, TX 75202

(214) 767-4771

OFCCP/ESA

U.S. Department of Labor

911 Walnut St., Room 2011

Kansas City, MO 64106

(816) 426-5384

OFCCP/ESA

U.S. Department of Labor

Federal Office Building, S. 935

1801 California St.

Denver, CO 80202

(303) 844-5011

OFCCP/ESA

U.S. Department of Labor

71 Stevenson St., S. 910

San Francisco, CA 94105

(415) 744-6640

OFCCP/ESA

U.S. Department of Labor, S. 610

1111 Third Ave.

Seattle, WA 98101

(206) 553-4508

Occupational Safety and Health Administration

State Program Offices

Alaska Department of Labor

1111 West 8th St., Room 306

Juneau, AK 99802

(907) 465-2700

Industrial Comm. of Arizona

800 W. Washington

Phoenix, AZ 85007

(602) 542-5795

California Dept. of Industrial Relations

455 Golden Gate Ave., 4th Fl.

San Francisco, CA 94102

(415) 703-4590

Connecticut Dept. of Labor

200 Folly Brook Blvd.

Wethersfield, CT 06109

(203) 566-5123

Hawaii Dept. of Labor and Industrial Relations

830 Punchbowl St.

Honolulu, HI 96813

(808) 586-8844

Indiana Dept. of Labor

State Office Bldg., Room W-195

402 West Washington St.

Indianapolis, IN 46204

(317) 232-2378

Iowa Div. of Labor Services

1000 E. Grand Ave.

Des Moines, IA 50319

(515) 281-3447

Kentucky Labor Cabinet

1049 US Highway 127 South

Frankfort, KY 40601

(502) 564-3070

Maryland Div. of Labor and Industry

Dept of Licensing and Regs

501 St. Paul Pl., 2nd Fl.

Baltimore, MD 21202

(301) 333-4179

Michigan Dept. of Labor

P.O. Box 30015

Victor Office Center

201 N. Washington Square

Lansing, MI 48933

(517) 373-9600

Michigan Dept. of Public Health

P.O. Box 30195

3423 N. Logan St.

Lansing, MI 48909

(517) 335-8022

Minnesota Dept. of Labor and Industry

443 Lafayette Rd.

St. Paul, MN 55155

(612) 296-2342

Nevada Department of Industrial Relations

Division of Occupational Safety and Health

Capitol Complex

1370 S. Curry St.

Carson City, NV 89710

(702) 687-3032

New Mexico Environment Dept.

Occupational Health and Safety Bureau

P.O. Box 26110

1190 St. Francis Dr.

Santa Fe, NM 87502

(505) 827-2850

New York Dept. of Labor

State Office Building

Campus 12, Room 457

Albany, NY 12240

(518) 457-2741

North Carolina Dept. of Labor

4 W. Edenton St.

Raleigh, NC 27601

(919) 733-0360

Oregon Occupational Safety and Health Div.

Dept. of Insurance and Finance, Room 160

21 Labor and Industry Bldg.

Summer and Chemekita Sts., N.E.

Salem, OR 97310

(503) 378-3272

Puerto Rico Dept. of Labor and Human Resources

505 Munoz Rivera Ave.

Hato Rey, PR 00918

(809) 754-2119

South Carolina Dept. of Labor

P.O. Box 11329

3600 Forest Dr.

Columbia, SC 29211

(803) 734-9594

Tennessee Dept. of Labor

501 Union Bldg, 2nd Fl., S. "A"

Nashville, TN 37243

(615) 741-2582

Utah Occupational Safety and Health

160 E. 300 South

P.O. Box 5800

Salt Lake City, UT 84110

(801) 530-6900

Vermont Dept. of Labor and Industry

120 State St.

Montpelier, VT 05620

(802) 828-2288

Virgin Islands Dept. of Labor

2131 Hospital St.

Christiansted, St Croix VI 00840

(809) 773-1994

Virginia Dept. of Labor and Industry

Powers-Taylor Bldg.

13 S. 13th St.

Richmond, VA 23219

(804) 786-2376

Washington Dept. of Labor and Industries

P.O. Box 44001

Olympia, WA 98504

(206) 956-4200

Wyoming Dept. of Employment

Occupational Health and Safety Administration

Herschler Bldg, 2nd Fl. East

122 West 25th St

Cheyenne, WY 82002

(307) 777-7672

Regional OSHA Offices

Region I (CT**, MA, ME, NH, RI, VT*)

133 Portland St., 1st Fl.

Boston, MA 02114

(617) 565-7164

Region II (NJ, NY**, PR*, VI*)

201 Varick St., Room 670

New York, NY 10014

(212) 337-2378

Region III (DC, DE, MD*, PA, VA*, WV)

3535 Market St., S. 2100

Philadelphia, PA 19104

(215) 596-1201

Region IV (AL, FL, GA, KY*, MS, NC*, SC*, TN*)

1375 Peachtree St., N.E., Room 587

Atlanta, GA 30367

(404) 347-3573

Region V (IL, IN*, MI*, MN*, OH, WI)

230 S. Dearborn St., Room 3244

Chicago, IL 60604

(312) 353-2220

Region VI (AR, LA, NM*, OK, TX)

525 Griffin St, Room 602

Dallas, TX 75202

(214) 767-4731

Region VII (IA*, KS, MO, NE)

911 Walnut St., Room 406

Kansas City, MO 64106

(816) 426-5861

Region VIII (CO, MT, ND, SD, UT*, WY*)

1961 Stout St., Room 1576

Denver, CO 80294

(303) 844-3061

Region IX (American Samoa, AZ*, CA*, Guam, HI*, NV*, Pacific

Trust Territories)

71 Stevenson St., 4th Flr.

San Francisco, CA 94105

(415) 744-6670

Region X (AK*, ID, OR*, WA*)

1111 Third Ave., Room 715

Seattle, WA 98101-3212

(206) 553-5930

*State operates an OSHA-approved program in both the public

and private sectors.

**State operates a public employee-only program (NY & CT).

Office of Labor-Management Standards

OLMS

S. 600

1365 Peachtree St., NE

Atlanta, GA 30367

(404) 347-4237

OLMS

S. 302

121 High St.

Boston, MA 02110

(617) 565-8130

OLMS

S. 774

Federal Office Building

230 S. Dearborn St.

Chicago, IL 60604

(312) 353-7264

OLMS

S. 831

Federal Office Building

1240 East 9th St.

Cleveland, OH 44199

(216) 522-3855

OLMS

S. 300

525 Griffin Square Bldg.

Griffin and Young Streets

Dallas, TX 75202

(214) 767-6834

OLMS

S. 1606

Federal Office Building

Kansas City, MO 64106

(816) 426-2547

OLMS

S. 878

201 Varick St.

New York, NY 10014

(212) 337-2580

OLMS

S. 9452

William Green Federal Building

600 Arch St.

Philadelphia, PA 19106

(215) 597-4960

OLMS

S. 725

71 Stevenson St.

San Francisco, CA 94105

(415) 744-6669

OLMS

S. 558

Ridell Building

1730 K St., N.W.

Washington, DC 20006

(202) 254-6510

Veterans Employment and Training Service

MONTGOMERY, ALABAMA 36130

649 Monroe St.

(205) 223-7677

JUNEAU, ALASKA 99802

1111 West 8th St.

(907) 465-2723

PHOENIX, ARIZONA 85005

1300 West Washington

(602) 261-4961

LITTLE ROCK, ARKANSAS 72201

Employment Security Bldg.

State Capitol Mall, Rm. G-12

(501) 682-3786

SACRAMENTO, CALIFORNIA 94280

P. O. Box 942880

800 Capitol Mall, Room W1142

(916) 654-8178

SAN FRANCISCO, CALIFORNIA 94105

71 Stevenson St., S. 705

(415) 744-6677

DENVER, COLORADO 80203

600 Grant St., S. 900

(303) 866-1114

WETHERSFIELD, CONNECTICUT 06109

CT Department of Labor Building

200 Folly Brook Boulevard

(203) 566-3326

NEWARK, DELAWARE 19702

Stockton Building, Room 104

100 Chapman Rd.

(302) 368-6898

WASHINGTON, D.C. 20001

500 C St., N.W., Room 108

(202) 727-3342

TALLAHASSEE, FLORIDA 32399

S. 102, Atkins Building

1320 Executive Center Dr.

(904) 488-2967

ATLANTA, GEORGIA 30303

Sussex Place, S. 504

148 International Blvd, N.E.

(404) 656-3127

HONOLULU, HAWAII 96813

830 Punchbowl St.

Room 232A

(808) 541-1780

BOISE, IDAHO 83735

317 Main St., Room 303

(208) 334-6164 or 6163

CHICAGO, ILLINOIS 60605

401 South State St., 2 North

(312) 793-3433

INDIANAPOLIS, INDIANA 46204

10 North Senate Ave., Room 203

(317) 232-6804

DES MOINES, IOWA 50319

1000 East Grand Ave.

(515) 281-5106

TOPEKA, KANSAS 66612

1309 Topeka Boulevard

(913) 296-5032

FRANKFORT, KENTUCKY 40621

c/o Department for Employment Services

275 East Main St.

(502) 564-7062

BATON ROUGE, LOUISIANA 70804

Louisiana DOL

Employment Security Bldg.

Room 174, 1001 N. 23rd St.

(504) 342-5691

LEWISTON, MAINE 04243

522 Lisbon St.

(207) 783-5352

BALTIMORE, MARYLAND 21201

1100 North Eutaw St.

Room 205

(410) 333-5194

BOSTON, MASSACHUSETTS 02203

Room 506, JFK Federal Building

(617) 565-2081

DETROIT, MICHIGAN 48202

7310 Woodward Ave.

S. 407

(313) 876-5613, 5614, or 5615

ST. PAUL, MINNESOTA 55101

390 North Robert, 1st Fl.

(612) 296-3665

JACKSON, MISSISSIPPI 39215

1520 West Capitol St.

(601) 961-7588

JEFFERSON CITY, MISSOURI 65104

421 East Dunklin St.

(314) 751-9231

HELENA, MONTANA 59624

515 North Sanders

(406) 449-5431

LINCOLN, NEBRASKA 68509

550 South 16th St.

(402) 437-5289

CARSON CITY, NEVADA 89710

500 East Third St.

(702) 885-4632

CONCORD, NEW HAMPSHIRE 03301

55 Pleasant St., Room 325

(603) 225-1424 or 235-1425

TRENTON, NEW JERSEY 08609

28 Yard Ave., Room 200

(609) 292-2930

ALBUQUERQUE, NEW MEXICO 87108

1st National Bank Building, East

5301 Central, N.E., Room 1214

(505) 841-4592

ALBANY, NEW YORK 12240

Harriman State Campus

Building 12, Room 518

(518) 457-7465

RALEIGH, NORTH CAROLINA 27605

700 Wade Ave.

(919) 733-7402

BISMARCK, NORTH DAKOTA 58501

1000 Divide Ave.

(701) 224-2865

CLEVELAND, OHIO 44115

2728 Euclid Ave., 2nd Fl.

(216) 622-3084

COLUMBUS, OHIO 43216

OBES Building

145 South Front St.

(614) 466-2768

OKLAHOMA CITY, OKLAHOMA 73105

Will Rogers Memorial Office Building, Room 301

(405) 557-7189

SALEM, OREGON 97311

312 Employment Division Building

875 Union St., N.E.

(503) 378-3338

HARRISBURG, PENNSYLVANIA 17121

Labor and Industry Building

Room 625

Seventh and Forster Streets

(717) 787-5834

HATO REY, PUERTO RICO 00918

Puerto Rico Department of Labor and Human Resources

Building 505 Munoz Rivera Ave.

15th Fl.

(809) 754-5391

PROVIDENCE, RHODE ISLAND 02903

507 Federal Building and Courthouse

(401) 528-5134

COLUMBIA, SOUTH CAROLINA 29201

914 Richland St., S. 101

(803) 253-7649

ABERDEEN, SOUTH DAKOTA 57402

420 South Roosevelt

P. O. Box 4730

(605) 226-7289

NASHVILLE, TENNESSEE 37201

301 James Robertson Parkway

Room 317

(615) 741-2135

AUSTIN, TEXAS 78701

TEC Building, Room 516-B

Trinity and 12th St.

(512) 463-2207

SALT LAKE CITY, UTAH 84111

140 E. 300 South

(801) 524-5703 or 524-5704

MONTPELIER, VERMONT 05602

Post Office Building

87 State St., Room 303

(802) 828-4441 or 828-4437

RICHMOND, VIRGINIA 23219

701 East Franklin St., S. 1409

(804) 786-7269

LACEY, WASHINGTON 98503

605 Woodview Dr., S.E.

(206) 438-4600

CHARLESTON, WEST VIRGINIA 25305

112 California Ave., Room 212

Capitol Complex

(304) 348-4001 or 347-5290

MADISON, WISCONSIN 53701

GEF I, 201 E. Washington Ave.

Room 250

(608) 266-3110

CASPER, WYOMING 82602

100 West Midwest Ave.

(307) 235-3281 or 235-3282

Mine Safety and Health Administration

Coal Mining

MSHA District 1 Office

Penn Place

20 N. Pennsylvania Ave.

Wilkes-Barre, PA 18701.

(717) 826-6321

MSHA District 2 Office

R.R. 1, Box 736

Hunker, PA 15639

(412) 925-5150

MSHA District 5 Office

P.O. Box 560

Norton, VA 24273

(703) 679-0230

MSHA District 8 Office

501 Busseron St.

Vincennes, IN 47591

(812) 882-7617

MSHA District 3 Office

5012 Mountaineer Mall

Morgantown, WV 26505

(304) 291-4277

MSHA District 4 Office

100 Bluestone Rd.

Mt. Hope, WV 25880

(304) 877-3900

MSHA District 6 Office

219 Ratliff Creek Rd.

Pikeville, KY 41501

(606) 432-0943

MSHA District 7 Office

HC 66, Box 1762

Barbourville, KY 40906

(606) 546-5123

MSHA District 10 Office

100 YMCA Dr.

Madisonville, KY 42431

(502) 821-4180

MSHA District 9 Office

P.O. Box 25367

Denver, CO 80225

(303) 231-5468

Metal and Nonmetal Mining

MSHA Northeastern District Office

230 Executive Dr.

Mars, PA 16046

(412) 772-2333

MSHA Southeastern District Office

35 Gemini Circle, S. 212

Birmingham, AL 35209

(205) 290-7294

MSHA North Central District Office

515 W. First St.

No. 228

Duluth, MN 55802

(218) 720-5448

MSHA South Central District Office

1100 Commerce St., Room 4650

Dallas, TX 75242

(214) 767-8401

MSHA Rocky Mountain District Office

P.O. Box 25367

Denver, CO 80225

(303) 231-5465

MSHA Western District Office

3333 Vaca Valley Parkway, S. 600

Vacaville, CA 95688

(707) 447-9844

Longshore and Harbor Workers

OWCP/DLHWC

U.S. Department of Labor, ESA

Room C-4315

200 Constitution Ave., N.W.

Washington, D.C. 20210

(202) 219-8572

District NO. 1 (MA, ME, NH, VT, RI, and CT)

OWCP/DLHWC

U.S. Department of Labor, ESA

One Congress St., 11th Fl.

Boston, MA 02114

(617) 565-2103

District NO. 2 (NY, NJ, and Puerto Rico)

OWCP/DLHWC

U.S. Department of Labor, ESA

P.O. Box 249

201 Varick St., Room 750

New York, NY 10014

(212) 337-2033

District NO. 3 (PA, DE, and WV)

OWCP,DLHWC

U.S. Department of Labor, ESA

P.O. Box 7336

Gateway Building, Room 13180

3535 Market St.

Philadelphia, PA 19104

(215) 596-5570

District NO. 7 (LA and AR)

OWCP/DLHWC

U.S. Department of Labor, ESA

Room 13032

701 Loyola Ave.

New Orleans, LA 70113

(504) 589-3664

District NO. 8 (TX, OK, and NM)

OWCP/DLHWC

U.S. Department of Labor, ESA

One South Green Building, Room 105

12600 N. Featherwood Dr.

Houston, TX 77034

(713) 481-9750

District No. 10 (IL, IN, IA, KS, MI, MN, MO, NE, OH, and WI)

OWCP/DLHWC

U.S. Department of Labor, ESA

Room 800

230 South Dearborn St.

Chicago, IL 60604

(312) 353-8883

District NO. 18 (That part of the State of California south of the

northern boundaries of the counties of San Luis Obispo, Kern,

and San Bernardino)

OWCP/DLHWC

U.S. Department of Labor, ESA

S. 720

401 E. Ocean Boulevard

Long Beach, CA 90802

(213) 514-6226

District NO. 40 (Processes cases under the District of Columbia

Workmen's Compensation Act of 1928)

Labor Standards

D.C. Department of Employment Services

1200 Upshur St., N.W.

Washington, DC 20011

(202) 576-6265

District NO. 4 (MD and DC)

OWCP/DLHWC

U.S. Department of Labor, ESA

Federal Building, Room 1026

31 Hopkins Plaza

Baltimore, MD 21201

(410) 962-3677

District NO. 5 (VA)

OWCP/DLHWC

U.S. Department of Labor, ESA

Federal Building, Room 212

200 Granby Mall

Norfolk, VA 23510

(804) 441-3071

District NO. 6 (FL, NC, KY, TN, SC, GA, AL, and MS)

OWCP/DLHWC

U.S. Department of Labor, ESA

Edward Ball Building, Fl. 10

214 Hogan St.

Jacksonville, FL 32202

(904) 791-2881

District No. 13 (AZ NV, and that part of the State of California

north of the northern boundaries of the counties of San Luis

Obispo, Kern, and San Bernardino)

OWCP/DLHWC

U.S. Department of Labor, ESA

P.O. Box 3770

71 Stevenson St., Room 210

San Francisco, CA 94119

(415) 744-6869

District NO. 14 (AK, CO, ID, MT, ND, SD, OR, UT, WA, and WY)

OWCP/DLHWC

U.S. Department of Labor, ESA

1111 3rd. Ave., S. 620

Seattle, WA 98101

(206) 442-4471

Dallas Office

OWCP

U.S. Department of Labor, ESA

Griffin Square Building, Room 407

525 Griffin Square

Dallas, TX 75202

(214) 767-4712

District NO. 15 (Hawaii)

OWCP/DLHWC

U.S. Department of Labor, ESA

P.O. Box 50209, Room 5108

300 Ala Moana Boulevard

Honolulu, HI 96850

(808) 551-1983

JOBS FOR TOMORROW

2007-12-05T00:36:00.002-08:00

JOBS FOR TOMORROW

Tomorrow's Jobs

Every 2 years, the Bureau of Labor Statistics develops

projections of the labor force, economic growth, industry

output and employment, and occupational employment under

three sets of alternative assumptions. These projections usually

cover a 10- to 15-year period and provide a framework for the

discussion of job outlook in each occupational statement in the

Handbook. All of the approximately 250 statements in this

edition of the Handbook identify the principal factors

affecting job prospects and indicate how these factors are

expected to affect the occupation in the future. This chapter

uses the moderate alternative of each projection to provide a

framework for the individual job outlook discussions.

Population Trends

Population trends affect employment opportunities in a

number of ways. First of all, changes in the size and

composition of the population influence the demand for goods

and services--for example, the population aged 85 and over will

grow more than three times as fast as the total population

between 1990 and 2005, increasing the demand for health

services. Equally important, population changes produce

corresponding changes in the size and characteristics of the

labor force.

The U.S. civilian noninstitutional population, aged 16 and

over, is expected to grow more slowly over the next 15 years

than it did during the previous 15-year period, increasing from

about 188 million to 218 million. However, even slower

population growth will increase the demand for goods and

services, as well as the demand for workers in many occupations

and industries.

The age structure will shift toward relatively fewer

children and youth and a growing proportion of middle-aged and

older people well into the 21st century. The decline in the

proportion of children and youth reflects the lower birth rates

that prevailed during the 1970's and 1980's; the impending

large increase in the middle-aged population reflects the aging

of the "baby boom" generation born after World War II; and the

very rapid growth in the number of old people is attributable

to high birth rates prior to the Great Depression of the

1930's, together with improvements in medical technology that

have made it possible for most Americans to survive into old

age.

Minorities and immigrants will constitute a larger share

of the U.S. population in 2005 than they do today. Substantial

increases in the number of Hispanics, Asians, and blacks are

anticipated, reflecting net immigration, and higher birth rates

among blacks and Hispanics. Substantial inflows of immigrants,

both documented and undocumented, are expected to continue.

The arrival of immigrants from every comer of the world has

significant implications for the labor force, because

immigrants tend to be of working age but of different

educational and occupational backgrounds than the U.S.

population as a whole.

Population growth varies greatly among geographic regions,

affecting the demand for goods and services and, in turn,

workers in various occupations and industries. Between 1980

and 1990, the population of the Midwest and the Northeast grew

by only 1.4 percent and 3.4 percent, respectively, compared with

13.4 percent in the South and 22.2 percent in the West. These

differences reflect the movement of people seeking new jobs or

retiring, as well as higher birth rates in some areas than in

others.

Projections by the Bureau of the Census indicate that the

West will continue to be the fastest growing region, increasing

about 19 percent between 1990 and 2005. In the South, the

population is expected to increase about 15 percent. The number

of people in the Northeast is projected to increase slightly,

by about 4 percent, while the Midwest population is expected to

remain about the same.

Geographic shifts in the population alter the demand for

and the supply of workers in local job markets. Moreover, in

areas dominated by one or two industries, local job markets may

be extremely sensitive to the economic fortunes of those

industries. For these and other reasons, local employment

opportunities may differ substantially from the projections for

the Nation as a whole presented in the Handbook. Sources of

information on State and local employment prospects are

identified on page 441.

Labor Force Trends

Population is the single most important factor governing

the size and composition of the labor force, which includes

people who are working, or looking for work. The civilian labor

force totaled 125 million in 1990 and is expected to reach 151

million by 2005. This projected increase -- 21 percent

-- represents a slowdown in both the number added to the labor

force and the rate of labor force growth, largely due to slower

population growth (chart 1).

America's workers will be an increasingly diverse group as

we approach the year 2005. White non-Hispanic men will make

up a smaller share of the labor force, and women and minority

group members will comprise a larger share than in 1990. White

non-Hispanics have historically been the largest component of

the labor force, but their share has been dropping and is

expected to fall from 79 percent in 1990, to 73 percent by

2005. Whites are projected to grow more slowly than blacks,

Asians, and others, but will experience the largest numerical

increase. Hispanics will add about 7 million workers to the

labor force from 1990 to 2005, increasing by 75 percent.

Despite this dramatic growth, Hispanics' share of the labor

force will only increase from 8 percent to 11 percent, as shown

in chart 2. Blacks, Hispanics, and Asian and other racial

groups will account for roughly 35 percent of all labor force

entrants between 1990 and 2005.

Women will continue to join the labor force in growing

numbers. The number of women in the labor force will increase

faster than the total labor force, but more slowly than between

1975 and 1990. In the late 1980's, the labor force

participation of women under age 40 began to increase more

slowly than in the past, in part because of the increases in

births that have occurred in recent years. Nevertheless, women

were only 40 percent of the labor force in 1975; by 2005, they

are expected to constitute 47 percent.

The changing age structure of the population will directly

affect tomorrow's labor force. As the proportion of young

workers declines, the pool of experienced workers will increase

(chart 3). In 1990, the median age of the labor force was 36.6

years; by 2005, it will be 40.6 years.

Between 1975 and 1990, the youth labor force (16 to 24

years of age) dropped by 1.4 million, a 6-percent decline. In

contrast, the number of youths in the labor force will increase

by 2.8 million over the 1990-2005 period, reflecting an

increase of 13 percent, still growing more slowly than the

total labor force. As a result, young people are expected to

comprise a slightly smaller percentage of the labor force in

2005 than in 1990. Among youths, the teenage labor force (16 to

19 years of age) will increase by 18 percent over the 1990-2005

period, a numerical increase of 1.4 million. The labor force 20

to 24 years of age is projected to increase by 10 percent, also

a numerical increase of 1.4 million. The total youth labor

force accounted for 24 percent of the entire labor force in

1975, fell to 17 percent in 1990, and should decline further to

16 percent by 2005.

The scenario should be different for prime-age workers (25

to 54 years of age). The baby boom generation will continue to

add members to the labor force, but their share of the labor

force peaked in 1985. These workers accounted for 61 percent of

the labor force in 1975, and rose significantly to 71 percent

in 1990, but should decline slightly to 69 percent by 2005. The

growing proportion of workers between the ages of 45 and 54 is

particularly striking. These workers should account for 24

percent of the labor force by the year 2005, up from 16 percent

in 1990. Because workers in their mid-forties to mid-fifties

usually have substantial work experience and tend to be more

stable than younger workers, this could result in improved

productivity and a larger pool of experienced applicants from

which employers may choose.

The number of older workers, aged 55 and above, is

projected to grow about twice as fast as the total labor force

between 1990 and 2005, and about five times as fast as the

number of workers aged 55 and above grew between 1975 and

1990.

As the baby boomers grow older, the number of workers aged 55

to 64 will increase; they exhibit higher labor force

participation than their older counterparts. By 2005, workers

aged 55 and over will comprise 15 percent of the labor force,

up from 12 percent in 1990.

In recent years, the level of educational attainment of

the labor force has risen dramatically. Between 1975 and 1990,

the proportion of the labor force aged 25 to 64 with at least 1

year of college increased from 33 to 47 percent, while the

proportion with 4 years of college or more increased from 18 to

26 percent (chart 4). Projected rates of employment growth are

faster for occupations requiting higher levels of education or

training than for those requiting less.

The emphasis on education will continue. Three out of the

4 fastest growing occupational groups will be executive,

administrative, and managerial; professional specialty; and

technicians and related support occupation's. These occupations

generally require the highest levels of education and skill,

and will make up an increasing proportion of new jobs. Office

and factory automation, changes in consumer demand, and

substitution of imports for domestic products are expected to

cause employment to stagnate or decline in many occupations

that require little formal education -- apparel workers and

textile machinery operators, for example. Opportunities for

high school dropouts will be increasingly limited, and workers

who cannot read and follow directions may not even be

considered for most jobs.

Employed high school dropouts are more likely to have low

paying jobs with little advancement potential, while workers in

occupations requiring higher levels of education have higher

incomes. In addition, many of the occupations projected to grow

most rapidly between 1990 and 2005 are among those with

higher earnings.

Nevertheless, even slower growing occupations that have a

large number of workers will provide many job openings

resulting from the need to replace workers who leave the labor

force or transfer to other occupations. Consequently, workers

with all levels of education and training will continue to be

in demand, although advancement opportunities will be best for

those with the most education and training.

Employment Change

Total employment is expected to increase from 122.6

million in 1990 to 147.2 million in 2005, or by 20 percent.

Reflecting a slowdown in labor force growth, this is only

slightly more than half the rate of increase recorded during

the previous 15-year period.

The 24.6 million jobs that will be added to the U.S.

economy by 2005 will not be evenly distributed across major

industrial and occupational groups -- causing some restructuring

of employment. Continued faster than average employment

growth among occupations that require relatively high levels of

education or training is expected. The following two sections

examine projected employment change from both industrial and

occupational perspectives. The industrial profile is discussed

in terms of wage and salary employment, except for agriculture,

forestry, and fishing, which includes self-employed and unpaid

family workers. The occupational profile is viewed in terms of

total employment (wage and salary, self-employed, and unpaid

family workers).

Industrial Profile

The long-term shift from goods-producing to

service-producing employment is expected to continue (chart 5).

For example, service-producing industries--including

transportation, communications, and utilities; retail and

wholesale trade; services; government; and finance, insurance,

and real estate -- are expected to account for approximately 23

million of the 24.6 million new jobs created by the year 2005.

In addition, the services division within this sector -- which

includes health, business, and educational services -- contains

16 of the 20 fastest growing industries, and 12 of the 20

industries adding the most jobs. Expansion of service sector

employment is linked to a number of factors, including changes

in consumer tastes and preferences, legal and regulatory

changes, advances in science and technology, and changes in

the way businesses are organized and managed. Specific factors

responsible for varying growth prospects in major industry

divisions are discussed below.

Service-Producing Industries

Services. Services is both the largest and the fastest

growing division within the service-producing sector (chart 6).

This division provided 38 million jobs in 1990; employment is

expected to rise 34.7 percent to 50.5 million by 2005,

accounting for almost one-half of all new jobs. Jobs will be

found in small firms and in large corporations, in State and

local governments, and in industries as diverse as banking,

hospitals, data processing, and management consulting. The two

largest industry groups in this division, health services and

business services, are projected to continue to grow very fast.

In addition, social, legal, and engineering and management

services industries further illustrate this division's strong

growth.

Health care will continue to be one of the fastest growing

industries in the economy. Employment in the health services

industries is projected to grow from 8.9 to 12.8 million.

Improvements in medical technology, and a growing and aging

population will increase the demand for health services.

Employment in home health care services -- the fastest growing

industry in the economy -- nursing homes, and offices and

clinics of physicians and other health practitioners is

projected to increase the most rapidly throughout this period.

However, not all health industries will grow at the same rapid

rate. For example, hospitals, both public and private, will

continue to be the largest, but slowest growing health care

industry.

Business services industries also will generate many jobs.

Employment is expected to grow from 5.2 million in 1990 to 7.6

million in 2005. Personnel supply services, made up primarily

of temporary help agencies, is the largest sector in this group

and will continue to add many jobs. However, due to the

slowdown in labor force participation by young women, and the

proliferation of personnel supply firms in recent years, this

industry will grow more slowly than during the 197590 period,

although still faster than the average for all industries.

Business services also includes one of the fastest growing

industries in the economy -- computer and data processing

services. This industry's rapid growth stems from advances in

technology, world wide trends toward office and factory

automation, and increases in demand from business firms,

government agencies, and individuals.

Education, both private and public, is expected to add 2.3

million jobs to the 9.4 million in 1990. This increase reflects

population growth and, in turn, rising enrollments projected

for elementary, secondary, and postsecondary schools. The

elementary school age population (ages 5-13) will rise by 3.8

million between 1990 and 2005, the secondary school age (14-

17) by 3.2 million, and the traditional postsecondary school age

(18-24) by 1.4 million. In addition, continued rising

enrollments of older, foreign, and part-time students are

expected to enhance employment in postsecondary education.

Not all of the increase in employment in education, however, will

be for teachers; teacher aides, counselors, and administrative

staff also are projected to increase.

Employment in social services is expected to increase by

1.1 million, bringing the total to 2.9 million by 2005,

reflecting the growing elderly population. For example,

residential care institutions, which provide around-the-clock

assistance to older persons and others who have limited ability

for self-care, is projected to be one of the fastest growing

industries in the U.S. economy. Other social services

industries that are projected to grow rapidly include child

daycare services and individual and miscellaneous social

services, which includes elderly daycare and family social services.

Retail and wholesale trade. Employment in retail and

wholesale trade is expected to rise by 26 and 16 percent,

respectively; from 19.7 to 24.8 million in retail trade and

from 6.2 to 7.2 million in wholesale trade. Guided by higher

levels of personal income and continued increases in women's

labor force participation, the fastest projected job growth in

retail trade is in apparel and accessory stores and eating and

drinking establishments, with the latter employing the most

workers in this sector. Substantial numerical increases in

retail employment are anticipated in food stores, automotive

dealers and service stations, and general merchandise stores.

Finance, insurance, and real estate. Employment is

expected to increase by 21 percent -- adding 1.4 million jobs

to the 1990 level of 6.7 million. The demand for financial

products and services is expected to continue unabated, but

bank mergers, consolidations, and closings-resulting from

overexpansion and competition from nonbank corporations that

offer bank-like services -- are expected to limit job growth.

The fastest growing industry within this sector is expected to

be nondepository holding and investment offices, which includes

businesses that compete with banks, such as finance companies

and mortgage brokers.

Transportation, communications, and public utilities.

Overall employment will increase by 15 percent. Employment in

the transportation sector is expected to increase by 25

percent, from 3.6 to 4.4 million jobs. Truck transportation

will account for 47 percent of all new jobs; air transportation

will account for 32 percent. The projected gains in

transportation jobs reflect the continued shift from rail to

road freight transportation, rising personal incomes, and

growth in foreign trade. In addition, deregulation in the

transportation industry has increased personal and business

travel options, spurring strong job growth in the passenger

transportation arrangement industry, which includes travel

agencies. Reflecting laborsaving technology and industry

competition, employment in communications is projected to

decline by 13 percent. Employment in utilities, however, is

expected to grow about as fast as the average, adding 160,000

new jobs, highlighted by one of the fastest growing industries

in the economy -- water supply and sanitary services.

Government. Between 1990 and 2005, government employment,

excluding public education and public hospitals, is expected to

increase 14 percent, from 9.5 million to 10.8 million jobs.

This growth will occur in State and local government;

employment in the Federal Government is expected to decline by

31,000 jobs.

Goods-Producing Industries

Employment in this sector peaked in the late 1970's, and

has not recovered from the recessionary period of the early

1980's and the trade imbalances that began in the mid-1980's.

Although overall employment in goods-producing industries is

expected to show little change, growth prospects within the

sector vary considerably.

Construction. Construction, the only goods-producing

industry projected to grow, is expected to add 923,000 jobs

between 1990 and 2005. Construction employment is expected

to increase by 18 percent, from 5.1 to 6.1 million. Increases in

road and bridge construction will offset the slowdown in demand

for new housing, reflecting the slowdown in population growth

and the overexpansion of office building construction in recent

years.

Manufacturing. Manufacturing employment is expected to

decline by 3 percent from the 1990 level of 19.1 million. The

projected loss of manufacturing jobs reflects productivity

gains achieved from increased investment in manufacturing

technologies as well as a winnowing out of less efficient operations.

The composition of manufacturing employment is expected to

shift since most of the jobs that will disappear are production

jobs. The number of professional, technical, and managerial

positions in manufacturing firms will increase.

Mining. Mining employment is expected to decline from

712,000 to 669,000 -- a 60 percent decline. Underlying this

projection is the assumption that domestic oil production will

drop and oil imports will rise sharply, reducing employment in

the crude petroleum industry. However, the expected rise in oil

prices should spark exploration and, consequently, a slight

increase in employment in the oil field services industry. In

addition, employment in coal mining should continue to decline

sharply due to the expanded use of laborsaving machinery.

Agriculture, forestry, and fishing. Overall employment in

agriculture, forestry, and fishing has been declining for many

decades and this trend is expected to continue -- the number of

jobs is projected to decline by 6 percent, from 3.3 million to 3.1

million.

The decline in agricultural, forestry, and fishing jobs

reflects a decrease of 410,000 in the number of self-employed

workers. Wage and salary positions are expected to increase by

214,000 -- with especially strong growth in the agricultural

services industry, which includes landscape, horticultural, and

farm management services.

Occupational Profile

Continued expansion of the service-producing sector

conjures up an image of a work force dominated by cashiers,

retail sales workers, and waiters. However, although service

sector growth will generate millions of clerical, sales, and

service jobs, it also will create jobs for financial managers,

engineers, nurses, electrical and electronics technicians, and

many other managerial, professional, and technical workers. In

fact, the fastest growing occupations will be those that

require the most formal education and training.

This section furnishes an overview of projected employment

in 12 categories or "clusters" of occupations based on the

Standard Occupational Classification (SOC). The SOC is used

by all Federal agencies that collect occupational employment

data, and is the organizational framework for grouping statements

in the Handbook.

In the discussion that follows, projected employment

change is described as growing faster, slower, or the same as

the average for all occupations. (These phrases are explained

on page 2.) While occupations that are growing fast generally

offer good opportunities, the numerical change in employment

also is important because large occupations, such as retail

sales worker, may offer many more new jobs than a small,

fast-growing occupation, such as paralegal (chart 7).

Technicians and related support occupations. Workers in

this group provide technical assistance to engineers,

scientists, and other professional workers, as well as operate

and program technical equipment. Employment in this cluster is

expected to increase by 37 percent, from 4.2 to 5.8 million,

making it the fastest growing occupational cluster in the

economy (chart 8). It also contains one of the fastest growing

occupations -- paralegals. Employment of paralegals is expected

to increase much faster than average as utilization of these

workers in the rapidly expanding legal services industry

increases. Health technicians and technologists, such as

radiologic and surgical technologists, and computer

programmers will add large numbers of jobs. Growth in other

occupations, such as broadcast technicians, will be limited by

laborsaving technological advances.

Professional specialty occupations. Workers in these

occupations perform a wide variety of duties, and are employed

in almost every industry. Employment in this cluster is

expected to grow by 32 percent, from 15.8 to 20.9 million jobs,

continuing to grow faster than average, and significantly

increasing its share of total employment by 2005. Much of this

growth is a result of rising demand for computer specialists;

social and recreation workers; lawyers; health diagnosing and

treating occupations; and engineers.

Service occupations. This group includes a wide range of

workers in protective services, food and beverage preparation,

health services, and cleaning and personal services. Employment

in these occupations is expected to grow by 29 percent, faster

than average, from 19.2 to 24.8 million. An expanding

population and economy, combined with higher personal incomes

and increased leisure time, will spur demand for many different

types of services. For example, employment of flight

attendants, homemaker-home health aides, and preschool

workers should all grow much faster than average.

Executive, administrative, and managerial occupations.

Workers in this cluster establish policies, make plans,

determine staffing requirements, and direct the activities of

businesses, government agencies, and other organizations.

Those in management support occupations provide technical

assistance to managers. Employment in this cluster is expected

to increase by 27 percent, from 12.5 to 15.9 million, reflecting

faster than average growth. Growth will be spurred by the

increasing number and complexity of business operations and

result in large employment gains, especially in the services

industry division. However, many businesses will streamline

operations, reducing administrative costs and employing fewer

managers, thus offsetting increases in employment.

Employment in these occupations tends to be driven by

industry growth. For example, employment of health services

managers will grow much faster than average, while only average

growth is expected for wholesale and retail buyers and

merchandise managers.

Hiring requirements in many managerial and administrative

jobs are becoming more stringent. Work experience, specialized

training, or graduate study will be increasingly necessary.

Familiarity with computers will continue to be important as a

growing number of firms rely on computerized management

information systems.

Marketing and sales occupations. Workers in this cluster

sell goods and services, purchase commodities and property for

resale, and stimulate consumer interest. Employment in this

cluster is projected to increase by 24 percent, from 14.1 to

17.5 million jobs, about as fast as average. Demand for

services sales representatives, travel agents, and securities

and financial services sales workers is expected to grow much

faster than average due to strong growth in the industries that

employ them. Many part- and full-time job openings are expected

for retail sales workers and cashiers due to the large size,

high turnover, and faster than average employment growth in

these occupations. Opportunities for higher paying sales jobs,

however, will tend to be more competitive.

Transportation and material moving occupations. Workers in

this cluster operate the equipment used to move people and

equipment. Employment in this group is expected to increase by

21 percent, from 4.7 to 5.7 million jobs. Faster than average

growth is expected for busdrivers, while average growth is

expected for truckdrivers, reflecting rising school enrollments

and growing demand for transportation services. Equipment

improvements and automation should result in materials moving

equipment operators increasing more slowly than the average. In

addition, railroad transportation workers and water

transportation workers are projected to show little change in

employment as technological advances increase productivity.

Construction trades and extractive occupations. Workers in

this group construct, alter, and maintain buildings and other

structures, and operate drilling and mining equipment. Overall

employment in this group is expected to rise from 4 to 4.8

million. Virtually all of the new jobs will be in construction.

Spurred by new projects and alterations to existing structures,

average employment growth is expected in construction. On the

other hand, increased automation, continued stagnation in the

oil and gas industries, and slow growth in demand for coal,

metal, and other materials will result in little change in

employment of extractive workers.

Mechanics, installers, and repairers. These workers

adjust, maintain, and repair automobiles, industrial equipment,

computers, and many other types of equipment. Overall

employment in these occupations is expected to grow by 16

percent -- from 4.9 to 5.7 million -- due to increased use of

mechanical and electronic equipment. One of the fastest growing

occupations in this group is expected to be computer and office

machine repairers, reflecting the increased use of these types

of machines. Communications equipment mechanics, installers,

and repairers, and telephone installers and repairers, in sharp

contrast, are expected to record a decline in employment due to

laborsaving advances.

Administrative support occupations, including clerical.

Workers in this largest major occupational group perform the

wide variety of administrative tasks necessary to keep

organizations functioning smoothly. The group as a whole is

expected to grow by 13 percent, from 22.0 to 24.8 million jobs,

more slowly than average. Technological advances are projected

to slow employment growth for stenographers and typists, word

processors, and data entry keyers. Others, such as

receptionists and information clerks, will grow much faster

than average, spurred by rapidly expanding industries such as

business services. Because of their large size and substantial

turnover, clerical occupations will offer abundant

opportunities for qualified jobseekers in the years ahead.

Handlers, equipment cleaners, helpers, and laborers.

Workers in this group assist skilled workers and perform

routine, unskilled tasks. Overall employment is expected to

increase by only 8 percent, slower than average, from 4.9 to

5.3 million jobs as routine tasks are automated. Employment of

construction laborers, however, is expected to increase about

as fast as average, reflecting growth in the construction

industry.

Agriculture, forestry, and fishing occupations. Workers in

these occupations cultivate plants, breed and raise animals,

and catch fish. Although demand for food, fiber, and wood is

expected to increase as the world's population grows, the use

of more productive farming and forestry methods and the

consolidation of smaller farms are expected to result in only a

5-percent increase in employment, from 3.5 to 3.7 million jobs.

Employment of farm operators and farm workers is expected to

rapidly decline, reflecting greater productivity; the need for

skilled farm managers, on the other hand, should result in

average employment growth in that occupation.

Production occupations. Workers in these occupations set

up, install, adjust, operate, and tend machinery and equipment

and use handtools and hand-held power tools to fabricate and

assemble products. Employment is expected to decline by 4

percent, from 12.8 to 12.3 million. Increases in imports,

overseas production, and automation -- including robotics and

advanced computer techniques -- will result in little change or

slight declines in overall employment. Relative to other

occupations, employment in many production occupations is

more sensitive to fluctuations in the business cycle and

competition from imports.

Replacement Needs

Most jobs through the year 2005 will become available as a

result of replacement needs. Thus, even occupations with little

or no employment growth or slower than average employment

growth may still offer many job openings.

Replacement openings occur as people leave occupations.

Some transfer to other occupations as a step up the career

ladder or to change careers. Others stop working in order to

return to school, to assume household responsibilities, or to

retire.

The number of replacement openings and the proportion of

job openings made up by replacement needs varies by

occupation.

Occupations with the most replacement openings generally are

large, with low pay and status, low training requirements, and

a high proportion of young and part-time workers. The

occupations with relatively few replacement openings, on the

other hand, are those with high pay and status, lengthy

training requirements, and a high proportion of prime working

age, full-time workers. Workers in these occupations generally

have spent several years acquiring education or training that

often is not applicable to other occupations. For example,

among professional specialty occupations, only 46 percent of

total job opportunities result from replacement needs, as

opposed to 69 percent among administrative support

occupations (chart 9).

Interested in More Detail?

Readers interested in more information about projections

and detail on the labor force, economic growth, industry and

occupational employment, or methods and assumptions should

consult the November 1991 Monthly Labor Review or Outlook

1990-2005, BLS Bulletin 2402. Information on the limitations

inherent to economic projections also can be found in either of

these two publications. For additional occupational data, as

well as statistics on educational and training completions, see

the 1992 edition of Occupational Projections and Training Data,

BLS Bulletin 2401.

Leads To More Information

This chapter describes many other ways to find information

about occupations, counseling, education and training,

financial aid, and finding a job. Also, look at the end of each

occupational statement in the Handbook, under Sources of

Additional Information, for organizations you can contact to

obtain information about that particular occupation.

Career Information

A good place to start collecting information you need is

from the people closest to you, your family and friends. These

personal contacts are often overlooked, but can be extremely

helpful. They may be able to answer your questions directly or,

more importantly, put you in touch with someone else who can.

This "networking" can lead to an "informational interview,"

where you can meet with someone who is willing to answer your

questions about a career or a company, and who can provide

inside information on related fields and other helpful hints.

This is a highly effective way to learn the recommended type of

training for certain positions, how someone in that position

entered and advanced, and what he or she likes and dislikes

about the work. While developing your network of contacts, you

may want to begin exploring other avenues.

Public libraries, career centers, and guidance offices

have a great deal of career material. To begin your library

search, look in the card catalog or at the computer listings

under "vocations" or "careers" and then under specific fields.

Also, leaf through the file of pamphlets that describe

employment in different organizations. Check the periodicals

section, where you will find trade and professional magazines

and journals about specific occupations and industries.

Familiarize yourself with the concerns and activities of

potential employers by skimming their annual reports and other

information they distribute to the public.

You can also find occupational information on video

cassettes, in kits, and through computerized information

systems. Check career centers for programs such as individual

counseling, group discussions, guest speakers, field trips, and

career days.

Always assess career guidance materials carefully.

Information should be current. Beware of materials produced by

schools for recruitment purposes that seem to glamorize the

occupation, overstate the earnings, or exaggerate the demand

for workers.

You may wish to seek help from a counselor. Counselors are

trained to help you discover your strengths and weaknesses,

guide you through an evaluation of your goals and values, and

help you determine what you want in a career. The counselor

will not tell you what to do, but will administer interest

inventories and aptitude tests, interpret the results, and help

you explore your options. Counselors also may be able to

discuss local job markets, and the entry requirements and costs

of the schools, colleges, or training programs offering

preparation for the kind of work that interests you. You can

find counselors in:

-- high school guidance offices,

-- college career planning and placement offices,

-- placement offices in private vocational/technical

schools and institutions,

-- vocational rehabilitation agencies,

-- counseling services offered by community organizations,

-- private counseling agencies and private practices,

-- State employment service offices affiliated with the U.S.

Employment Service.

Before employing the services of a private counselor or

agency, seek recommendations and check their credentials. The

International Association of Counseling Services (IACS)

accredits counseling services throughout the country. To

receive the listing of accredited services for your region,

send a self-addressed, stamped, business-size envelope to

IACS, 101 South Whiting St., Suite 211, Alexandria, VA 22304.

The Directory of Counseling Services, an IACS publication

providing employment counseling and other assistance, may be

available in your library or school career counseling center. For a

list of certified career counselors by State, contact the National

Board of Certified Counselors, P.O. Box 5406, Greensboro, NC

27435. Phone: (919) 547-0607.

Professional societies, trade associations, labor unions,

business firms, and educational institutions provide a variety

of free or inexpensive career material. Many of these are

identified in the Sources of Additional Information section of

each Handbook statement. For information on occupations not

covered in the Handbook, consult directories in your library's

reference section for the names of potential sources. You may

need to start with The Guide to American Directories or The

Directory of Directories. Another useful resource is The

Encyclopedia of Associations, an annual multivolume publication

listing trade associations, professional societies, labor

unions, and fraternal and patriotic organizations.

The National Audiovisual Center, a central source for all

audiovisual material produced by the U.S. Government, rents and

sells material on jobs and careers. For a catalog, contact the

National Audiovisual Center, 8700 Edgeworth Dr., Capitol

Heights, MD 20743. Phone: (301) 763-1896.

For first-hand experience in an occupation, you may wish

to intern, or take a summer or part-time job. Some internships

offer academic credit or pay a stipend. Check with guidance

offices, college career resource centers, or directly with

employers.

State and Local Information

The Handbook provides information for the Nation as a

whole. For help in locating State or local area information,

contact your State occupational information coordinating

committee (SOICC). These committees may provide the

information directly, or refer you to other sources. Refer to the

chapter beginning on page 000 for addresses and telephone

numbers of the SOICC's.

Most States have career information delivery systems

(CIDS). Look for these systems in secondary schools,

postsecondary institutions, libraries, job training sites,

vocational rehabilitation centers, and employment service

offices. Jobseekers can use the systems' computers, printed

material, microfiche, and toll-free hotlines to obtain

information on occupations, educational opportunities, student

financial aid, apprenticeships, and military careers. Ask

counselors and SOICC's for specific locations.

State employment security agencies develop detailed

information about local labor markets, such as current and

projected employment by occupation and industry,

characteristics of the work force, and changes in State and

local area economic activity. Addresses and telephone numbers

of the directors of research and analysis in these agencies are

listed in the chapter beginning on page 000.

Education and Training Information

Check with professional and trade associations for lists

of schools that offer career preparation in a particular field.

The Sources of Additional Information section of many Handbook

statements directs you to organizations that can provide training

information.

Refer to various directories, such as those that follow,

for descriptions of courses of study, admissions requirements,

expenses, and student financial aid information for colleges,

universities, and other training institutions. Guidance

offices, libraries, and large bookstores usually carry copies.

Be sure to use the most recent edition because these

directories are revised frequently. Guidance offices and

libraries also have collections of college catalogs that list

their specific programs, requirements, and expenses.

The Directory of Educational Institutions, published

annually, lists schools accredited by the Accrediting

Commission for Independent Colleges and Schools of the Career

College Association. Most of these institutions are business

schools, offering programs such as secretarial science,

business administration, accounting, data processing, court

reporting, paralegal studies, fashion merchandising, travel and

tourism, culinary arts, drafting, and electronics. The Career

College Association also distributes the Handbook of Accredited

Private Trade and Technical Schools, which lists schools

accredited by the Accrediting Commission for Trade and

Technical Schools. For copies of these directories, write to

the Career College Association, 750 1st St. NE., Washington,

DC 20002. Phone: (202) 659-2460.

Information about home study programs appears in the

Directory of Accredited Home Study Schools, published by the

National Home Study Council. Send requests for the Directory,

as well as a list of other publications, to the National Home

Study Council, 1601 18th St. NW., Washington, DC 20009.

Phone: (202) 234-5100.

Local labor unions, school guidance counselors, and State

employment offices provide information about apprenticeships.

Copies of The National Apprenticeship Program and

Apprenticeship Information are available from the Bureau of

Apprenticeship and Training, U.S. Department of Labor, 200

Constitution Ave. NW., Washington, DC 20210. Phone: (202)

535-0545.

Financial Aid Information

Information about financial aid is available from a

variety of sources. Contact your high school guidance counselor

and college financial aid officer for information concerning

scholarships, fellowships, grants, loans, and work-study

programs. In addition, every State administers financial aid

programs; contact State Departments of Education for

information. Banks and credit unions can provide information

about student loans. You also may want to study the directories

and guides to sources of student financial aid available in

guidance offices and public libraries.

The Federal Government provides grants, loans, work-study

programs, and other benefits to students. Information about

programs administered by the U.S. Department of Education is

presented in The Student Guide to Federal Financial Aid

Programs, updated annually. To get a copy, write to Federal

Student Aid Programs, P.O. Box 84, Washington, DC 20044, or

phone, toll-free, 1-800-433-3243.

Meeting College Costs, an annual publication of the

College Board, explains how student financial aid works and how

to apply for it. The current edition is available to high

school students through guidance counselors.

Need a Lift?, an annual publication of the American

Legion, contains career and scholarship information. Single

copies may be obtained without charge by calling (317)

635-8411. Multiple copies cost $2 each, prepaid (including

postage), and can be obtained from the American Legion, Attn:

National Emblem Sales, 700 N. Pennsylvania St., P.O. Box 1055,

Indianapolis, IN 46204.

Some student aid programs are designed to assist specific

groups-Hispanics, blacks, native Americans, or women, for

example. Higher Education Opportunities for Minorities and

Women, published by the U.S. Department of Education, is a

guide to organizations offering assistance. This publication

can be found in libraries and guidance offices, or may be

purchased from the Superintendent of Documents, U.S.

Government Printing Office, Washington, DC 20402. Phone (202)

783-3238 for price and ordering information.

The Armed Forces have several educational assistance

programs. These include the Reserve Officers' Training Corps

(ROTC), the New G.I. bill, and tuition assistance. Information

can be obtained from military recruiting centers, located in most

cities.

Information on Finding a Job

It takes some people a great deal of time and effort to

find a job they enjoy. Others may walk right into an ideal

employment situation. Don't be discouraged if you have to

pursue many leads. Friends, neighbors, teachers, and counselors

may know of available jobs in your field of interest. Read the

want ads. Consult State employment service offices and private

or nonprofit employment agencies or contact employers directly.

Where To Learn About Job Openings

* State employment service offices

* Civil service announcements (Federal, State, local) Classified ads

-- Local and out-of-town newspapers

-- Professional journals

-- Trade magazines

* Labor unions

* Professional associations (State and local chapters)

Libraries and community centers

* Women's counseling and employment programs

* Youth programs

* School or college placement services

* Employment agencies and career consultants

* Employers

* Parents, friends, and neighbors

Tips for Finding the Right Job, a U.S. Department of Labor

pamphlet, offers advice on determining your job skills,

organizing your job search, writing a resume, and making the

most of an interview. Check with your State employment service

office, or order a copy from the Superintendent of Documents,

U.S. Government Printing Office, Washington, DC 20402. Phone

(202) 783-3238 for price and ordering information.

Getting Back to Work, another Department of Labor

publication, is designed to assist laid off workers, in

particular. It also provides information on searching for and

landing a job, in addition to detailed information on 250

occupations that are most likely to require the skills of

displaced workers. This booklet is available in most State

employment service offices, or may be obtained, free of charge,

from the Bureau of Labor Statistics, Office of Employment

Projections, 600 E St. NW., Room 9216, Washington, DC 20212.

Phone: (202) 272-5381.

Informal job search methods. It is possible to apply

directly to employers without a referral. You may locate a

potential employer in the Yellow Pages, in directories of local

chambers of commerce, and in other directories that provide

information about employers. When you find an employer you are

interested in, you can file an application even if you don't

know for certain that an opening exists.

Want ads. The "Help Wanted" ads in newspapers list

hundreds of jobs. Realize, however, that many job openings are

not listed there. Also, be aware that the classified ads

sometimes do not give some important information. Many offer

little or no description of the job, working conditions, or

pay. Some ads do not identify the employer. They may simply

give a post office box for sending your resume. This makes

followup inquiries very difficult. Furthermore, some ads offer

out-of-town jobs; others advertise employment agencies rather

than employment.

Keep the following in mind if you are using want ads:

-- Do not rely solely on the classifieds to find a job; follow other leads

as well.

-- Answer ads promptly, since openings may be filled quickly,

even before the ad stops appearing in the paper.

-- Follow the ads diligently. Check them every day, as early

as possible, to give yourself an advantage.

-- Beware of "no experience necessary" ads. These ads often

signal low wages, poor working conditions, or straight commission

work.

-- Keep a record of all ads to which you have responded.

Public employment service. The State employment service,

sometimes called the Job Service, operates in coordination with

the Labor Department's U.S. Employment Service. About 1,700

local offices, also known as employment service centers, help

jobseekers locate employment and help employers find qualified

workers at no cost to themselves. To find the office nearest

you, look in the State government telephone listings under "Job

Service" or "Employment."

Job Interview Tips

Preparation:

* Learn about the organization.

* Have a specific job or jobs in mind.

* Review your qualifications for the job.

* Prepare answers to broad questions about yourself.

* Review your resume.

* Practice an interview with a friend or relative.

* Arrive before the scheduled time of your interview.

Personal Appearance:

* Be well groomed.

* Dress appropriately.

* Do not chew gum or smoke.

The Interview:

* Answer each question concisely.

* Respond promptly.

* Use good manners. Learn the name of your interviewer and

shake hands as you meet.

* Use proper English and avoid slang.

* Be cooperative and enthusiastic.

* Ask questions about the position and the organization.

* Thank the interviewer, and follow up with a letter.

Test (if employer gives one):

* Listen closely to instructions.

* Read each question carefully.

* Write legibly and clearly.

* Budget your time wisely and don't dwell on one question.

Information To Bring to an Interview:

* Social Security number.

* Driver's license number.

* Resume. Although not all employers require applicants to

bring a resume, you should be able to furnish the

interviewer with information about your education,

training, and previous employment.

* Usually an employer requires three references. Get

permission from people before using their names, and make

sure they will give you a good reference. Try to avoid

using relatives. For each reference, provide the following

information: Name, address, telephone number, and job title.

Job matching and referral. At a State employment service

office, an interviewer will determine if you are "job ready" or

if counseling and testing services would be helpful before you

begin your job search. After you are "job ready," you may

examine the Job Bank, a computerized listing of public- and

private-sector job openings that is updated daily. Select

openings that interest you, then get more details from a staff

member who can describe the job openings in detail and arrange

for interviews with prospective employers.

Counseling and testing. Centers can test for occupational

aptitudes and interests and then help you choose and prepare

for a career.

Services for special groups. By law, veterans are entitled

to priority at State employment service centers. Veterans'

employment representatives can inform you of available

assistance and help you deal with any problems.

Summer Youth Programs provide summer jobs in city, county,

and State government agencies for low-income youth. Students,

school dropouts, or graduates entering the labor market who are

between 16 and 21 years of age are eligible. In addition, the

Job Corps, with more than 100 centers throughout the United

States, helps young people learn skills or obtain education.

Service centers also refer applicants to opportunities

available under the Job Training Partnership Act (JTPA) of

1982. JTPA prepares economically disadvantaged persons and

those facing barriers to employment for jobs.

Call the Federal Job Information Center, operated by the

Office of Personnel Management, for information about

employment with the U.S. Government. The phone number is

(202) 606-2700, or write to Federal Job Information Center, 1900

E St. NW., Room 1416, Washington, DC 20415.

Private employment agencies. These agencies can be very

helpful, but don't forget that they are in business to make

money. Most agencies operate on a commission basis, with the

fee dependent upon a successful match. You or the hiring

company will have to pay a fee for the matching service. Find

out the exact cost and who is responsible for paying it before

using the service.

While employment agencies can help you save time and

contact employers who otherwise may be difficult to locate, in

some cases, your costs may outweigh the benefits. Consider any

guarantee they offer when figuring the cost.

What Goes Into a Resume

A resume summarizes your qualifications and employment

history. It usually is required when applying for managerial,

administrative, professional, or technical positions. Although

there is no set format, it should contain the following

information:

* Name, address, and telephone number.

* Employment objective. State the type of work or specific

job you are seeking.

* Education, including school name and address, dates of

attendance, curriculum, and highest grade completed or

degree awarded.

* Experience, paid or volunteer. Include the following for

each job: Job title, name and address of employer, and

dates of employment. Describe your job duties.

* Special skills, knowledge of machinery, proficiency in

foreign languages, honors received, awards, or membership

in organizations.

* Note on your resume that "references are available upon

request." On a separate sheet, list the name, address,

telephone number, and job title of three references.

College career planning and placement offices. College

placement offices facilitate matching job openings with

suitable jobseekers. You can set up schedules and use available

facilities for interviews with recruiters or scan lists of

part-time, temporary, and summer jobs maintained in many of

these offices. You also can get counseling, testing, and job

search advice and take advantage of their career resource

library. Here you also will be able to identify and evaluate

your interests, work values, and skills; attend workshops on

such topics as job search strategy, resume writing, letter

writing, and effective interviewing; critique drafts of resumes

and videotapes of mock interviews; explore files of resumes and

references; and attend job fairs conducted by the office.

Community agencies. Many nonprofit organizations offer

counseling, career development, and job placement services,

generally targeted to a particular group, such as women, youth,

minorities, ex-offenders, or older workers.

Many communities have career counseling, training,

placement, and support services for employment. These

programs are sponsored by a variety of organizations, including

churches and synagogues, nonprofit organizations, social service

agencies, the State employment service, and vocational

rehabilitation agencies. Many cities have commissions that

provide services for these special groups.

Organizations for Specific Groups

The organizations listed below provide information on

career planning, training, or public policy support for

specific groups.

Disabled: President's Committee on Employment of People

with Disabilities, 1331 F St. NW., 3rd Floor, Washington, DC

20004. Phone: (202) 376-6200.

The blind: Job Opportunities for the Blind Program,

National Federation for the Blind, 1800 Johnson St., Baltimore,

MD 21230. Phone: toll-free, 1-800-638-7518.

Minorities: National Association for the Advancement of

Colored People (NAACP), 4805 Mount Hope Dr., Baltimore, MD

21215-3297. Phone: (212) 358-8900.

National Urban League, Employment Department, 500 E. 62nd

St., New York, NY 10021. Phone: (301) 310-9000.

National Urban League, Washington Operations, 1111 14th

St. NW., 6th Floor, Washington, DC 20005. Phone: (202)

898-1604.

Older workers: National Association of Older Workers

Employment Services, c/o National Council on the Aging, 409 3rd

St. SW., Suite 2000, Washington, DC 20024. Phone: (202)

479-1200.

American Association of Retired Persons, Worker Equity,

601 E St. NW., Floor A5, Washington, DC 20049. Phone: (202)

434-2040.

Association Nacional Por Personas Mayores (National

Association for Hispanic Elderly), 2727 W. 6th St., Suite 270,

Los Angeles, CA 90057. Phone: (213) 487-1922. This

organization specifically serves low-income, minority older

persons.

National Caucus/Center on Black Aged, Inc., 1424 K St.

NW., Suite 500, Washington, DC 20005. Phone: (202) 637-8400.

Veterans: Contact the nearest regional office of the

Veterans Administration.

Women: U.S. Department of Labor, Women's Bureau, 200

Constitution Ave. NW., Washington, DC 20210. Phone: (202)

523-6652.

Catalyst, 250 Park Ave. South, 5th floor, New York, NY

10003. Phone: (212) 777-8900. (Ask for the free referral

pamphlet called Career Development Resources.)

Wider Opportunities for Women, 1325 G St. NW., Lower

Level, Washington, DC 20005. Phone: (202) 638-3143.

Federal laws, executive orders, and selected Federal grant

programs bar discrimination in employment based on race, color,

religion, sex, national origin, age, and handicap. Information

on how to file a charge of discrimination is available from

U.S. Equal Employment Opportunity Commission offices around

the country. Their addresses and telephone numbers are listed in

telephone directories under U.S. Government, EEOC, or are

available from the Equal Employment Opportunity Commission,

1801 L St. NW., Washington, DC 20507. Phone: (202) 663-4264.

Information on Federal laws concerning fair labor

standards such as the minimum wage and equal employment

opportunity can be obtained from the Office of Information and

Consumer Affairs, Employment Standards Administration, U.S.

Department of Labor, Room C-4331,200 Constitution Ave. NW.,

Washington, DC 20210. Phone: (202) 523-8743.

Sources of State and Local Job Outlook Information

State and local job market and career information is

available from State employment security agencies and State

Occupational Information Coordinating Committees (SOICC's).

State employment security agencies develop occupational

employment projections and other job market information.

SOICC's provide or help locate labor market and career

information. The following list provides the title, address,

and telephone number of State employment security agency

directors of research and SOICC directors.

Alabama

Director, Labor Market Information, Alabama Department of

Industrial Relations, 649 Monroe St., Room 422, Montgomery, AL

36130. Phone: (205) 242-8855.

Director, Alabama Occupational Information Coordinating

Committee, Bell Bldg., 207 Montgomery St., Suite 400,

Montgomery, AL 36130. Phone: (205) 242-2990.

Alaska

Chief, Research and Analysis, Alaska Department of Labor, P.O.

Box 25501, Juneau, AK 99802-5501. Phone: (907) 465-4500.

Executive Director, Alaska Department of Labor, Research and

Analysis Section, P.O. Box 25501, Juneau, AK 99802-5501.

Phone: (907) 465-4518.

American Samoa

Program Director, American Samoa State Occupational

Information Coordinating Committee, Office of Manpower

Resources, American Samoa Government, Pago Pago, AS

96799. Phone: (684) 633-4485.

Arizona

Research Administrator, Arizona Department of Economic

Security, 1789 West Jefferson, P.O. Box 6123, Site Code 733A,

Phoenix, AZ 85005. Phone: (602) 542-3871.

Executive Director, Arizona State Occupational Information

Coordinating Committee, P.O. Box 6123, Site Code 897J, 1788

West Jefferson St., First Floor North, Phoenix, AZ 85005.

Phone: (602) 542-3680.

Arkansas

State and Labor Market Information, Arkansas Employment

Security Division, P.O. Box 2981, Little Rock, AR 72203. Phone:

(501) 682-1543.

Executive Director, Arkansas Occupational Information

Coordinating Committee, Arkansas Employment Security

Division, Employment and Training Services, P.O. Box 2981,

Little Rock, AR 72203. Phone: (501) 682-3159.

California

Acting Chief, Employment Data and Research Division,

California Employment Development Department, P.O. Box

942880, M IC 57,Sacramento, CA 94280-0001. Phone: (916)

427-4675.

Executive Director, California Occupational Information

Coordinating Committee, 800 Capitol Mall, MIC-67, Sacramento,

CA 95814. Phone: (916) 323-6544.

Colorado

Director, Labor Market Information, Chancey Building, 8th

Floor, 1120 Lincoln St., Denver, CO 80203. Phone: (303)

894-2589.

Director, Colorado Occupational Information Coordinating

Committee, State Board Community College, 1391 Speer Blvd.,

Suite 600, Denver, CO 80204-2554. Phone: (303) 866-4488.

Connecticut

Director, Research and Information, Employment Security

Division, Connecticut Labor Department, 200 Folly Brook Blvd.,

Wethersfield, CT 06109. Phone: (203) 566-2120.

Executive Director, Connecticut Occupational Information

Coordinating Committee, Connecticut Department of Education,

25 Industrial Park Rd., Middletown, CT 06457. Phone: (203)

638-4042.

Delaware

Chief, Office of Occupational and Labor Market Information,

Delaware Department of Labor, University Plaza, Building D,

P.O. Box 9029, Newark, DE 19702-9029. Phone: (302) 368-

6962.

Executive Director, Office of Occupational and Labor Market

Information, Delaware Department of Labor, University Office

Plaza, P.O. Box 9029, Newark, DE 19714-9029. Phone: (302)

368-6963.

District of Columbia

Chief of Labor Market Information, District of Columbia

Department of Employment Services, 500 C St. NW., Room 201,

Washington, DC 20001. Phone: (202) 639-1642.

Executive Director, District of Columbia Occupational

Information Coordinating Committee, Department of Employment

Security Services, 500 C St. NW, Room 215, Washington, DC

20001. Phone: (202) 639-1090.

Florida

Chief, Bureau of Labor Market Information, Florida Department

of Labor and Employment Security, 2012 Capitol Circle, SE,

Room 200, Hartman Building, Tallahassee, FL 32399-0674.

Phone : (904)488-1048.

Manager, Florida Department of Labor and Employment Security,

Bureau of Labor Market Information, 2012 Capitol Circle, SE.,

Hartman Bldg., Suite 200, Tallahassee, FL 32399-0673. Phone:

(904) 488-7397.

Georgia

Director, Labor Information System, Georgia Department of

Labor, 223 Courtland St., NE., Atlanta, GA 30303. Phone: (404)

656-3177.

Executive Director, Georgia Occupational Information

Coordinating Committee, Department of Labor, 148 International

Blvd., Sussex Place, Atlanta, GA 30303. Phone: (404) 656-9639.

Guam

Executive Director, Guam State Occupational Information

Coordinating Committee, Human Resource Development

Agency, Jay Ease Bldg., Third Floor, P.O. Box 2817, Agana, GU

96910. Phone: (871) 646-9341.

Hawaii

Chief, Research and Statistics Office, Hawaii Department of

Labor and Industrial Relations, 830 Punchbowl St., Room 304,

Honolulu, HI 96813. Phone: (808) 548-7639.

Executive Director, Hawaii Occupational Information

Coordinating Committee, 830 Punchbowl St., Room 315,

Honolulu, HI 96813. Phone: (808) 548-3496.

Idaho

Chief, Research and Analysis, Idaho Department of Employment,

317 Main St., Boise, ID 83735. Phone: (208) 334-6169.

Director, Idaho Occupational Information Coordinating

Committee, Len B. Jordan Bldg., Room 301, 650 West State St.,

Boise, ID 83720. Phone: (208) 334-3705.

Illinois

Director, Economic Information and Analysis, Illinois

Department of Employment Security, 401 South State St., 2

South, Chicago, IL 60605. Phone: (312) 793-2316.

Executive Director, Illinois Occupational Information

Coordinating Committee, 217 East Monroe, Suite 203,

Springfield, IL 62706. Phone: (217) 785-0789.

Indiana

Director, Labor Market Information, Indiana Department of

Employment and Training Services, 10 North Senate Ave.,

Indianapolis, IN 46204. Phone: (317) 232-8456.

Executive Director, Indiana Occupational Information

Coordinating Committee, 309 West Washington St., Room 309,

Indianapolis, IN 46204. Phone: (317) 232-8528.

Iowa

Supervisor, Audit and Analysis Department, Iowa Department of

Employment Services, 1000 East Grand Ave., Des Moines, IA

50319. Phone: (515) 281-8181.

Executive Director, Iowa Occupational Information Coordinating

Committee, Iowa Department of Economic Development, 200

East Grand Ave., Des Moines, IA 50309. Phone: (515) 242-4890.

Kansas

Chief, Labor Market Information Services, Kansas Department of

Human Resources, 401 Topeka Ave., Topeka, KS 66603.

Phone: (913) 296-5058.

Director, Kansas Occupational Information Coordinating

Committee, 401 Topeka Ave., Topeka, KS 66603. Phone: (913)

296-1865.

Kentucky

Manager, Labor Market Research and Analysis, Kentucky

Department for Employment Services, 275 East Main St.,

Frankfort, KY 40621. Phone: (502) 564-7976.

Information Liaison/Manager, Kentucky Occupational Information

Coordinating Committee, 275 East Main St. - 1 East, Frankfort,

KY 40621-0001. Phone: (502) 564-4258.

Louisiana

Director, Research and Statistics Division, Louisiana

Department of Employment and Training, P.O. Box 94094, Baton

Rouge, LA 70804-9094. Phone: (504) 342-3141.

Coordinator, Louisiana Occupational Information Coordinating

Committee, P.O. Box 94094, Baton Rouge, LA 70804-9094.

Phone: (504) 342-5149.

Maine

Director, Division of Economic Analysis and Research, Maine

Department of Labor, Bureau of Employment Security, 20 Union

St., Augusta, ME 04330. Phone: (207) 289-2271.

Executive Director, Maine Occupational Information Coordinating

Committee, State House Station 71, Augusta, ME 04333. Phone:

(207) 289-2331.

Maryland

Director, Office of Labor Market Analysis and Information,

Maryland Department of Economic and Employment

Development, 1100 North Eutaw St., Room 601, Baltimore, MD

21201. Phone: (301) 333-5000.

Coordinator, Maryland Occupational Information Coordinating

Committee, Department of Employment and Training, 1100 North

Eutaw St., Room 600, Baltimore, MD 21201. Phone: (301)

333-5478.

Massachusetts

Director of Research, Massachusetts Division of Employment

Security, 19 Staniford St., 2nd Floor, Boston, MA 02114. Phone:

(617) 727-6868.

Director, Massachusetts Occupational Information Coordinating

Committee, Massachusetts Division of Employment Security,

Charles F. Hurley Bldg., 2nd Floor, Government Center, Boston,

MA 02114. Phone: (617) 727-6718.

Michigan

Director, Bureau of Research and Statistics, Michigan

Employment Security Commission, 7310 Woodward Ave.,

Detroit, MI 48202. Phone: (313) 876-5445.

Executive Coordinator, Michigan Occupational Information

Coordinating Committee, Victor Office Center, Third Floor, 201

North Washington Square, Box 30015, Lansing, MI 48909.

Phone: (517) 373-0363.

Minnesota

Director, Research and Statistical Services, Minnesota

Department of Jobs and Training, 390 North Robert St., 5th

Floor, St. Paul, MN 55101. Phone: (612) 296-6546.

Director, Minnesota Occupational Information Coordinating

Committee, Minnesota Department of Economic Security, 690

American Center Bldg., 150 East Kellogg Blvd., St. Paul, MN

55101. Phone: (612) 296-2072.

Mississippi

Chief, Labor Market Information Department, Mississippi

Employment Security Commission, P.O. Box 1699, Jackson, MS

39215-1699. Phone: (601) 961-7424.

Acting Executive Director, Department of Economic and

Community Development, Labor Assistance Division, Mississippi

Occupational Information Coordinating Committee Office, 301

West Pearl St., Jackson, MS 39203-3089. Phone: (601) 949-

2002.

Missouri

Chief, Research and Analysis, Missouri Division of Employment

Security, P.O. Box 59, Jefferson City, MO 65104. Phone: (314)

751-3591.

Director, Missouri Occupational Information Coordinating

Committee, 421 East Dunklin St., Jefferson City, MO 65101.

Phone: (314) 751-3800.

Montana

Chief, Research and Analysis, Montana Department of Labor and

Industry, P.O. Box 1728, Helena, MT 59624. Phone: (406)

444-2430.

Program Manager, Montana Occupational Information

Coordinating Committee, P.O. Box 1728, 1327 Lockey St.,

Second Floor, Helena, MT 59624. Phone: (406) 444-2741.

Nebraska

Research Administrator, Labor Market Information, Nebraska

Department of Labor, 550 South 16th St., P.O. Box 94600,

Lincoln, NE 68509. Phone: (402) 471-9964.

Administrator, Nebraska Occupational Information Coordinating

Committee, P.O. Box 94600, State House Station, Lincoln, NE

68509-4600. Phone: (402) 471-4845.

Nevada

Chief, Employment Security Research, Nevada Employment

Security Department, 500 East Third St., Carson City, NV 89713.

Phone: (702) 687-4550.

Executive Director, Nevada Occupational Information

Coordinating Committee, 1923 North Carson St., Suite 211,

Carson City, NV 89710. Phone: (702) 687-4577.

New Hampshire

Director, Labor Market Information, New Hampshire Department

of Employment Security, 32 South Main St., Concord, NH 03301-

4587.Phone: (603) 228-4123.

Director, New Hampshire State Occupational Information

Coordinating Committee, 64B Old Suncook Rd., Concord, NH

03301. Phone: (603) 228-3349.

New Jersey

Assistant Commissioner, Policy and Planning, New Jersey

Department of Labor, John Fitch Plaza, Room 1010, Trenton, NJ

08625-0056. Phone: (609) 292-2643.

Staff Director, New Jersey Occupational Information

Coordinating Committee, 1008 Labor and Industry Bldg., CN

056, Trenton, NJ 08625-0056. Phone: (609) 292-2682.

New Mexico

Chief, Economic Research and Analysis Bureau, New Mexico

Department of Labor, 401 Broadway Boulevard, NE, P.O. Box

1928, Albuquerque, NM 87103. Phone: (505) 841-8645.

Director, New Mexico Occupational Information Coordinating

Committee, Tiwa Bldg., 401 Broadway NE., P.O. Box 1928,

Albuquerque, NM 87103. Phone: (505) 841-8455.

New York

Director, Division of Research and Statistics, New York State

Department of Labor, State Campus, Bldg. 12, Room 400,

Albany, NY 12240-0020. Phone: (518) 457-6181.

Executive Director, New York Occupational Information

Coordinating Committee, Department of Labor, Research and

Statistics Division, State Campus, Bldg. 12, Room 400, Albany,

NY 12240. Phone: (518) 457-6182.

North Carolina

Director, Labor Market Information Division, North Carolina

Employment Security Commission, P.O. Box 25903, Raleigh, NC

27611. Phone: (919) 733-2936.

Executive Director, North Carolina Occupational Information

Coordinating Committee, 1311 St. Mary's St., Suite 250, P.O.

Box 27625, Raleigh, NC 27611. Phone: (919) 733-6700.

North Dakota

Director, Research and Statistics, Job Service of North Dakota,

P.O. Box 1537, Bismarck, ND 58502. Phone: (701) 224-2868.

Coordinator, North Dakota Occupational Information

Coordinating Committee, 1600 East Interstate, Suite 14, P.O.

Box 1537, Bismarck, ND 58502-1537. Phone: (701) 224-2197.

Ohio

Labor Market Information Division, Ohio Bureau of Employment

Services, 145 South Front St., Columbus, OH 43215. Phone:

(614) 644-2689.

Director, Ohio Occupational Information Coordinating Committee,

Division of LMI, Ohio Bureau of Employment Services, 1160

Dublin Rd., Bldg. A, Columbus, OH 43215. Phone: (614) 644-

2689.

Oklahoma

Director, Research Division, Oklahoma Employment Security

Commission, 308 Will Rogers Memorial Ofc. Bldg., Oklahoma

City, OK 73105. Phone: (405) 557-7116.

Executive Director, Oklahoma Occupational Information

Coordinating Committee, Department of Voc/Tech Education,

1500 W. 7th Ave., Stillwater, OK 74074. Phone: (405) 743-5198.

Oregon

Assistant Administrator for Research and Statistics, Oregon

Employment Division, 875 Union St. NE., Salem, OR 97311.

Phone: (503) 378-3220.

Executive Director, Oregon Occupational Information

Coordinating Committee, 875 Union St. NE., Salem, OR 97311.

Phone: (503) 378-8146.

Pennsylvania

Director, Research and Statistics Division, Pennsylvania

Department of Labor and Industry, 1216 Labor and Industry

Building, Harrisburg, PA 17121. Phone: (717) 787-3265.

Director, Pennsylvania Occupational Information Coordinating

Committee, Pennsylvania Department of Labor and Industry,

1224 Labor and Industry Bldg., Harrisburg, PA 17120. Phone:

(717) 787-8646.

Puerto Rico

Director, Research and Statistics Division, Puerto Rico

Department of Labor and Human Resources, 505 Munoz Rivera

Ave.,20th Floor, Hato Rey, PR 00918. Phone: (809) 754-5385.

Executive Director, Puerto Rico Occupational Information

Coordinating Committee, 202 Del Cristo St., P.O. Box 6212, San

Juan, PR 00936-6212. Phone: (809) 723-7110.

Rhode Island

Administrator, Labor Market Information and Management

Services, Rhode Island Department of Employment and Training,

101 Friendship St., Providence, RI 02903-3740. Phone: (401)

277-3730.

Director, Rhode Island Occupational Information Coordinating

Committee, 22 Hayes St., Room 133, Providence, RI 02908.

Phone: (401) 272-0830.

South Carolina

Director, Labor Market Information, South Carolina Employment

Security Commission, P.O. Box 995, Columbia, SC 29202.

Phone: (803) 737-2660.

Director, South Carolina Occupational Information Coordinating

Committee, 1550 Gadsden St., P.O. Box 995, Columbia, SC

29202.

Phone: (803) 737-2733.

South Dakota

Director, Labor Information Center, South Dakota Department of

Labor, P.O. Box 4730, Aberdeen, SD 57402-4730. Phone: (605)

622-2314.

Director, South Dakota Occupational Information Coordinating

Committee, South Dakota Department of Labor, 420 South

Roosevelt St., P.O. Box 4730, Aberdeen, SD 57402-4730.

Phone: (605) 622-2314.

Tennessee

Director, Research and Statistics Division, Tennessee

Department of Employment Security, 500 James Robertson

Pkwy., 11th Floor, Nashville, TN 37245-1000. Phone: (615) 741-

2284.

Director, Tennessee Occupational Information Coordinating

Committee, 500 James Robertson Pkwy., 11th Floor Volunteer

Plaza, Nashville, TN 37219. Phone: (615) 741-6451.

Texas

Director, Economic Research and Analysis, Texas Employment

Commission, 15th and Congress Ave., Room 208T, Austin, TX

78778. Phone: (512) 463-2616.

Director, Texas Occupational Information Coordinating

Committee, Texas Employment Commission Building, Room

526T, 15th and Congress, Austin, TX 78778. Phone: (512) 463-

2399.

Utah

Director, Labor Market Information and Research, Utah

Department of Employment Security, 140 East 300 South, P.O.

Box 11249, Salt Lake City, UT 84147. Phone: (801) 536-7400.

Executive Director, Utah Occupational Information Coordinating

Committee-c/o Utah Department of Employment Security, P.O.

Box 11249, 174 Social Hall Ave., Salt Lake City, UT 84147-0249.

Phone: (801) 533-2274.

Vermont

Director, Policy and Information, Vermont Department of

Employment and Training, 5 Green Mountain Dr., P.O. Box 488,

Montpelier, VT 05602. Phone: (802) 229-0311.

Director, Vermont Occupational Information Coordinating

Committee, Green Mountain Dr., P.O. Box 488, Montpelier, VT

05601-0488. Phone: (802) 229-0311.

Virginia

Director, Economic Information Service Division, Virginia

Employment Commission, P.O. Box 1358, Richmond, VA 23211.

Phone: (804) 786-7496.

Executive Director, Virginia Occupational Information

Coordinating Committee, Virginia Employment Commission, 703

East Main St., P.O. Box 1358, Richmond, VA 23211. Phone:

(804) 786-7496.

Virgin Islands

Chief, Research and Analysis, Virgin Islands Department of

Labor, P.O. Box 3159, St. Thomas, VI 00801. Phone: (809)

776-3700.

Coordinator, Virgin Islands Occupational Information

Coordinating Committee, P.O. Box 3359, St. Thomas, VI 00801.

Phone: (809) 776-3700.

Washington

Labor Market Information, Washington Employment Security

Department, 212 Maple Park, Mail Stop KG-11, Olympia, WA

98504-5311. Phone: (206) 753-5114.

Director, Washington Occupational Information Coordinating

Committee, 212 Maple Park, MS KG-11, Olympia, WA 98504-

5311. Phone: (206) 438-4803.

West Virginia

Assistant Director, Labor and Economic Research, West Virginia

Bureau of Employment Programs, 112 California Ave.,

Charleston, WV 25305-0112. Phone: (304) 348-2660.

Executive Director, West Virginia Occupational Information

Coordinating Committee, One Dunbar Plaza, Suite E, Dunbar,

WV 25064. Phone: (304) 293-5314.

Wisconsin

Director, Labor Market Information Bureau, Wisconsin

Department of Industry, Labor, and Human Relations, 201 East

Washington Ave., Room 221, P.O. Box 7944, Madison, WI

53707. Phon e: (608)266-5843.

Administrative Director, Wisconsin Occupational Information

Coordinating Council, Division of Employment and Training

Policy, 201 East Washington Ave., P.O. Box 7972, Madison, WI

53707. Phone: (608) 266-8012.

Wyoming

Manager, Research and Planning, Division of Administration,

Wyoming Department of Employment, P.O. Box 2760, Casper,

WY 82602. Phone: (307) 235-3646.

Executive Director, Wyoming Occupational Information

Coordinating Council, Post Office Box 2760, 100 West Midwest,

Casper, WY 82602. Phone: (307) 235-3642.

Related Publications

Occupational Projections and Training Data, 1992 Edition

This supplement to the Occupational Outlook Handbook

provides the statistical and technical data supporting the

information presented in the Handbook. Education and training

planners, career counselors, and jobseekers can find valuable

information that ranks occupations by employment growth,

earnings, susceptibility to unemployment, separation rates, and

part-time work.

Outlook 1990-2005

Every 2 years, the Bureau of Labor Statistics produces

detailed projections of the U.S. economy and labor force. This

bulletin presents the Bureau's latest analyses of economic and

industrial growth, the labor force, and trends in occupational

employment into the 21st century. An overview article focuses

on important issues raised by these projections.

Note:

At press time, prices for these publications were not

available. For prices and ordering information, contact any of

the Bureau of Labor Statistics Regional Offices listed on the

inside of the front cover, or the Division of Occupational

Outlook, Bureau of Labor Statistics, Washington, DC 20212.

New from BLS

Do you want to know more about work in industries?

* Number of jobs

* Geographic areas having the most jobs

* Size of establishments

* Goods and services produced

* Kinds of workers employed--what types of work is done

* Common working conditions and hazards

* Jobs that can be entered from high school; from college

* Jobs that do not require specialized education or training

* Opportunities for acquiring skills

* Prospects for upward mobility

* Long-term employment outlook

* Reasons for changing staffing patterns

* Earnings of key occupations

Then, don't miss this new publication!

Career Guide to Industries

Career Guide to Industries, BLS Bulletin 2403, was

produced by the same staff that prepares the Occupational

Outlook Handbook -- the Federal Government's premier career

guidance publication. This new book is a must for guidance

counselors, individuals planning their careers, job seekers,

and others who want the latest word on career information from

an industry perspective.

INVESTMENT SWINDLES:

2007-12-05T00:36:00.001-08:00

INVESTMENT SWINDLES:

How They Work and How to Avoid Them

Including 16 questions that can

turn off an investment crook

While the vast majority of persons in the futures industry

and other sectors of the investment community serve the

investing public conscientiously and ethically, there are

inevitably those few who seek to exploit the trust which others

have labored so hard to earn.

This booklet has been prepared as a part of NFA's

continuing public education efforts to assist you in recognizing

and avoiding such individuals.

Contents

The Multi-Billion Dollar Business of Investment Fraud

Who are the Investment Swindlers?

Who are the Victims of Investment Fraud?

How Investment Swindlers Find (or Attract) Their Victims

Techniques Investment Swindlers Use

Several Investment Swindles and How They Worked

Questions That Can Turn Off an Investment Swindler

Before You Invest, Investigate

Finally, Don't Lose Touch with Your Money

The Multi-Billion Dollar Business of Investment Fraud

Americans are investors. We purchase stocks and bonds,

contribute to savings programs, own real estate, participate in

futures and options markets, acquire collectibles, provide

start-up capital for new business ventures, buy franchises, and

the list goes on. The strength of our economy is in large

measure the product of our combined investments.

Perhaps more so than any people in the world, we enjoy an

ever-expanding variety of investments to choose from, coupled

with the freedom to make our own investment decisions. It's our

money and we can invest it as we wish.

Unfortunately, some unscrupulous promoters abuse our

freedom to choose by concocting investment schemes that have

zero possibility of making money for anyone other than

themselves. Such persons promise investment rewards they

cannot possibly deliver and have no intention of delivering.

They are swindlers.

Many of them are very good at it. Their annual take

through lying and deceit is in the billions of dollars. If one

estimate of $10 billion a year lost to investment fraud is

accurate, that's more money than the combined annual profits of

the nation's three major automakers! Some say even that

estimate may be too low.

Successful investment swindlers use every trick in the

book, and some that aren't even recorded, to convince you that

none of the descriptions and precautions in the following pages

apply to them. After all, they are offering you a

once-in-a-lifetime opportunity to make a lot of money quickly

and you do trust them, don't you? As will be seen, some of

their methods of gaining your trust are truly ingenious.

Who are the Investment Swindlers?

They are a faceless voice on a telephone. Or a friend of a

friend. They may perform surgery on their victims' savings from

a dingy back office or boiler-room or from an opulent suite in

the new bank building. They may wear three-piece suits or they

may wear hard hats. They may have no apparent connection to

the investment business or they may have an alphabet-soup of

impressive letters following their names. They may be glib and

fast-talking or so seemingly shy and soft-spoken that you feel

almost compelled to force your money on them.

The first rule of protecting yourself from an investment

swindle is thus to rid yourself of any notions you might have

as to what an investment swindler looks like or sounds like.

Indeed, some swindlers don't start out to be swindlers. There

are case histories in which individuals who held positions of

trust and esteem-accountants, attorneys, bona fide investment

brokers and even doctors-have sacrificed their ethics for the

fast buck of running an investment scam.

In still other cases, investment programs that began with

legitimate intentions went sour through happenstance or poor

management--leading the promoter to mishandle or abscond with

investors' capital. Whether an investment is planned as a scam

or simply becomes one, the result is the same.

This is why, as we will discuss, protecting your savings

against fraud involves at least three steps: Carefully check

out the person and firm you would be dealing with; take a close

and cautious look at the investment offer itself; and continue

to monitor any investment that you decide to make. No one of

these precautions alone may be sufficient.

Who are the Victims of Investment Fraud?

If you are absolutely certain it could never be you, the

investment swindler starts with a big advantage. Investment

fraud generally happens to people who think it couldn't happen

to them.

Just as there is no typical profile for swindlers, neither

is there one for their victims. While some scams target persons

who are known or thought to have deep pockets, most swindlers

take the attitude that everyone's money spends the same. It

simply takes more small investors to fund a large fraud. In

fact, some swindlers deliberately seek out families that may

have limited means or financial difficulties--figuring such

persons may be particularly receptive to a proposal that offers

fast and large profits. A favorite pitch is that small

investors can become rich only if they learn and employ the

investment strategies used by wealthy persons. Naturally, the

swindler will teach them!

Although victims of investment fraud can differ from one

another in many ways, they do, unfortunately, have one trait in

common: Greed that exceeds their caution. Plus a willingness to

believe what they want to believe. Movie actors and athletes,

professional persons and successful business executives,

political leaders and internationally famous economists have all

fallen victim to investment fraud. So have hundreds of thousands

of others, including widows, retirees and working people--people

who made their money the hard way and lost it the fast way.

How Investment Swindlers Find (or Attract) Their Victims

Swindlers attempt to mimic the sales approaches of

legitimate investment firms and salespersons. Thus, the fact

that someone may contact you in a particular way--by phone,

mail, or even through a referral--should not in itself be viewed

as an indication that the investment is or isn't shady. Many

totally reputable firms also use the same methods to effectively

and economically identify individuals who may have an interest

in their investment products and services.

Bearing in mind that investigate before you invest is good

advice no matter how you are approached, these are some of the

methods con men commonly employ to contact their victims-to- be.

* Telephone

So-called telephone boiler-rooms remain a favorite way for

swindlers and their sales squads to quickly contact large

numbers of potential investors. Even if a swindler has to make

100 or 200 phone calls to find a mooch (one of the terms

swindlers use for their victims), he figures that the

opportunity to pocket thousands of dollars of someone's savings

is still good pay for the time and cost involved.

* Mail

Some sellers of fraudulent investment deals buy bona fide

mailing lists--names and addresses of persons who, for example,

subscribe to a particular investment-related publication, who

have responded to previous direct mail offers, or who have

other characteristics that swindlers look for. In the hope of

avoiding notice by postal authorities, mail order swindlers may

not make a direct or immediate pitch for your money. Rather,

they often seek to entice you to write or phone for more

information. Then comes a call from the salesperson or the

person who closes the deal. Some may phone even if you didn't

respond to the mailing.

* Advertisements

A newspaper or magazine ad may offer (or at least hint

at)profit opportunities far more attractive than available

through conventional investments. Once you've taken the bait,

the swindler will then attempt to "set the hook." Even though

investment crooks know that regulatory agencies regularly

monitor ads in major publications, some nevertheless use such

publications in the hope of being able to hit-and-run before an

investigator shows up. Others advertise in narrowly circulated

publications they think regulators may be less likely to see.

* Referrals

One of the oldest schemes going involves paying fast, large

profits to initial investors (actually from their own or other

peoples' investments) knowing that they are likely to recommend

the investment to their friends. And these friends will tell

their friends. Soon, the swindler no longer needs to find new

victims; they will find him. (See page 16.)

* The "Reputable" Business

Some swindlers go first class. Using profits from previous

swindles, they rent plush offices, hire an interior decorator

and professional-sounding receptionist and open what has the

appearance--but not the reality of a reputable investment firm.

You may even have to phone for an appointment, and once there

don't be surprised to be kept waiting (that's intended to make

you all the more eager). This kind of swindler's success

depends on how long he can keep his victims from knowing they

are being cheated. Investors are assured that their large

profits are being reinvested to earn even larger profits. Such

a swindler may join local civic groups, contribute to

charities, and generally play the role of solid citizen.

Techniques Investment Swindlers Use

Their techniques are as varied as their methods of

establishing contact. If there is a common denominator, however,

it is their ability to be convincing. The skills that make them

successful are essentially the same skills that enable any good

salesperson to be successful.

But swindlers have a decided advantage: They don't have to

make good on their promises. In the absence of this

responsibility, they have no reluctance to promise whatever it

takes to persuade you to part with your money. These are some

of their techniques:

* Expectation of Large Profits

The profits a swindler talks about are generally large

enough to make you interested and eager to invest--but not so

large as to make you overly skeptical. Or he may mention a

profit figure he thinks you will consider believable and then,

as a further enticement, suggest that the potential profit is

actually far greater than that. The latter figure, of course, is

the one he hopes you will focus on. Generally speaking, if an

investment proposal sounds too good to be true, it probably is.

* Low Risk

Some are so blatant as to suggest there's no risk--that the

investment is a sure money maker. Obviously, the last thing a

swindler wants you to think about is the possibility of losing

your money. (If you ask how you can be certain your money is

safe, you can count on a plausible-sounding answer. Besides, at

this point, he figures you will believe what you want to believe.)

To make his pitch more credible, a swindler may

acknowledge that there could be some risk--then quickly assure

you it's minimal in relation to the profits you will almost

certainly make. A con man may become impatient or even

aggressive if the question of risk is raised--perhaps suggesting

that he has better things to do than waste time with people who

lack the courage and foresight needed to make money! With this

kind of put down, he hopes you won't bring up the subject again.

* Urgency

There's usually some compelling reason why it's essential

for you to invest right now. Perhaps because the investment

opportunity can "be offered to only a limited number of people."

Or because delaying the investment could mean missing out on a

large profit (after all, once the information he has confided to

you becomes generally known, the price is sure to go up, right?).

Urgency is important to a swindler. For one thing, he

wants your money as quickly as possible with a minimum of

effort on his part. And he doesn't want you to have time to

think it over, discuss it with someone who might suggest you

become suspicious, or check him or his proposal out with a

regulatory agency. Besides, he may not plan on remaining in

town very long.

* Confidence

They don't call them con men for nothing! They sound

confident about the money you are going to make so that you will

become confident enough to let go of your savings. Their

message is that they are doing you a favor by offering the

investment opportunity. A swindler may even threaten (pleasantly

or otherwise) to end the discussion by suggesting that if you are

not really interested there are many other people who will be.

Once you protest that you are interested, he figures your

savings are practically in his pocket.

Although you can't necessarily spot a con man by the way

he talks, most are strong-willed, articulate individuals who

will dominate the conversation-even if they do it in a low-key,

friendly sort of way. The more they talk, the less chance you

have to ask questions.

Several Investment Swindles and How They Worked

There's a saying among swindlers that it's not the scam

that counts, it's the sell. Judging from the number of arcane

and often outlandish schemes that have been employed to

separate otherwise prudent people from their money, the saying

would seem to reflect reality. The evidence is that if people

can be made believers, they can be sold practically anything.

Consider several of the ways in which hustlers of phony

investments have won the confidence of persons whom they

planned to victimize.

The Old-Fashioned Ponzi Scheme

It's become one of the oldest and most often employed

investment schemes because it's proven to be one of the most

lucrative. While there are innumerable variations, here is how

a person we will call Frank C. practiced it. At the outset,

Frank approached a relatively small number of influential

persons in the community and offered them the opportunity to

invest--with a guaranteed high return--in a computer-generated

program of arbitrage in foreign currency fluctuations. To be

sure, it sounded high tech and sophisticated but Frank had his

eye on sophisticated and well-heeled victims.

Within a short period of time, he approached and sold the

scheme to still other investors--then promptly used a portion

of the money invested by these persons to pay large profits to

the original group of investors. As word spread of Frank's

genius for making money and paying profits, even more would-be

investors anxiously put up even larger sums of money. Some of

it was used to recycle the fictitious profit payments and, like

a pebble in the water, the word of fast and fabulous rewards

produced an ever-widening circle of eager investors. And more

money poured in.

And Frank C. left town a wealthy man.

The Infallible Forecaster

Jim L. (among his many aliases) had a full-time job in the

daytime, but with assets that consisted only of a phone,

patience and an easy way of talking he managed to parlay a

nighttime sideline into an ill-gotten fortune. The routine went

like this.

Jim would phone someone we'll call Mrs. Smith and quickly

assure her that, "No," he didn't want her to invest a single

cent. "Never invest with someone you don't know," he preached.

But he said he would like to demonstrate his firm's "research

skill" by sharing with her the forecast that so-and-so a

commodity was about to experience a significant price increase.

Sure enough, the price soon went up.

A second phone call didn't solicit an investment either.

Jim simply wanted to share with Mrs. Smith a prediction that

the price of so-and-so a commodity was about to go down. "Our

forecasts will help you decide whether ours is the kind of firm

you might someday want to invest with," he added. As predicted,

the price of the commodity subsequently declined.

By the time Mrs. Smith received a third call, she was a

believer. She not only wanted to invest but insisted on it--with

a big enough investment to make up for the opportunities she had

already missed out on.

What Mrs. Smith had no way of knowing was that Jim had

begun with a calling list of 200 persons. In the first call, he

told 100 that the price of so-and-so a commodity would go up

and the other 100 were told it would go down. When it went up,

he made a second call to the 100 who had been given the

"correct forecast." Of these, 50 were told the next price move

would be up and 50 were told it would be down.

The end result: Once the predicted price decline occurred,

Jim had a list of 50 persons eager to invest. After all, how

could they go wrong with someone so obviously infallible in

forecasting prices?

But go wrong they did, the moment they decided to send Jim

a half million dollars from their collective savings accounts.

All That Glitters

Not only did the two brothers have a fancy office building

with their own company name on it, but the investment offer

seemed sound and straightforward: "Instead of buying gold

outright and holding it for appreciation, make a small

downpayment that the firm could use to secure financing that

would permit much larger quantities of gold to be bought and

held for the investor's account." That way, when the price of

gold rose--as was "sure to happen"--investors stood to realize

highly leveraged profits.

The company provided storage vaults where investors could

view the wall-to-wall stacks of glittering bullion. By the time

authorities caught wind of the scheme's suspicious smell and

looked for themselves, it turned out the only thing gold was

the color of the paint on the cardboard used to construct

look-alike bars of bullion.

The counterfeit gold, however, proved far easier to find

than the millions of dollars of investors' money. Most of that

is still missing.

16 Questions That Can Turn Off an Investment Swindler

The first line of defense against investment fraud is your

inalienable right to ask questions and--until you get the right

answers--to say "No." And mean no. Not surprisingly, this is

usually an investment swindler's first point of attack. To keep

you from asking questions, he asks them! Invariably, the

questions have "yes" answers, such as "You would at least be

interested in hearing about such a fantastic investment

opportunity, wouldn't you?" or "You would like to make a large

amount of money in a short period of time with little or no risk, right?"

One difference between a reputable investment firm and a

swindler is that reputable firms encourage you to ask

questions, to obtain as much information as possible, to

clearly understand the risks involved, and to be entirely

comfortable with any investment decision you make. The only

thing a swindler wants is your money These are some of the

questions that swindlers don't like to hear:

1. Where did you get my name?

If the response is that you were chosen from a "select list

of intelligent and prudent investors," that select list may be

the telephone directory, or a purchased list of persons who've

bought certain types of books, subscribed to particular

magazines, or responded to newspaper ads. If you have made

ill-advised investments in the past, you can be pretty sure

your name is on someone's alumni list. It's the list swindlers

prize most: Easy preys who are eager to recoup (but are doomed

to repeat) their earlier losses.

2. What risks are involved in the proposed investment?

Except for obligations of the U.S. Treasury, which are

considered risk-free, all investments involve some degree of

risk. And some investments, by their nature, involve greater

risks than others. Keep in mind that if the salesman had

knowledge of a sure-thing, big-profit investment opportunity,

he wouldn't be on the phone talking with you.

3. Can you send me a written explanation of your investment

so I can consider it at my leisure?

For someone peddling fraudulent investments, that can be a

double turnoff. For one thing, most crooks are reluctant to put

anything in writing that might cause them to run afoul of

postal authorities or provide material that, at some point,

might become evidence in a fraud trial. Secondly, swindlers

don't want you to do anything at your leisure. They want your

money now.

Accordingly, it's a good rule of thumb that any investment

which "absolutely has to be made immediately" shouldn't be

made at all. You may not always be right, but you are less likely to

be sorry.

4. Would you mind explaining your investment proposal to some

third party, such as my attorney, accountant, investment

advisor or banker?

If the answer goes something along the lines of "normally,

I'd be glad to, but there isn't time for that," or if the

salesman snaps back by asking "can't you make your own

investment decisions." these are virtually certain clues that

your final answer should be an emphatic "No."

5. Can you give me the names of your firm's principals and officers?

Although some persons who establish and operate dishonest

firms change their own names as often as they change their

firms' names, even the hint that you are the kind of investor

who checks into things like that can be a fast turn-off for a

swindler.

6. Can you provide references?

Not just another list of other investors who supposedly

became fabulously wealthy (the names you get may be the

salesman's boss or someone sitting at the next phone), but

reputable and reliable recommendations such as a bank or

well-known brokerage firm that you can easily contact.

7. Do you have any documents such as a prospectus or risk

disclosure statement that you can provide?

This may not be available in connection with all types of

investments but in many investment areas--such as securities,

futures and options trading--it's required. And there can be

requirements that you be provided with this information and

acknowledge in writing that you have read and understood it.

Obviously, it's not the sort of information a swindler is likely

to distribute.

8. Are the investments you are offering traded on a regulated

exchange, such as a securities or futures exchange?

Some bona fide investments are and some aren't, but

fraudulent investments never are. Exchanges have strict rules

designed to assure fair dealing and competitive price

determination. There are also in-place mechanisms to provide

for rule enforcement and to impose severe sanctions against

those who fail to observe the rules.

9. What governmental or industry regulatory supervision is

your firm subject to?

If the salesman rattles off a list that ranges from the FBI

to the Boy Scouts, tell him you'd like to check the firm's good

standing before making an important investment decision. Then

verify the response. Few things discourage a swindler faster

than the thought that his first visitor the next morning may be

from a regulatory agency.

If, on the other hand, you are told his particular area of

investment isn't subject to regulation (perhaps because

everyone in his business is an ethical, upstanding citizen),

take that explanation for whatever you think it's worth. At the

very least, keep in mind that any ongoing supervision which

isn't being provided by a regulatory organization or agency

will have to be provided by you.

10. How long has your company been in business?

In any kind of business activity, there can be advantages

to dealing with a known, established company. This isn't to say

that new businesses aren't starting up all the time or that the

vast majority aren't perfectly reputable. But if you find

yourself talking with someone who doesn't seem to have a past,

it can be worthwhile to find out why. Many swindlers have been

running scams for years but understandably aren't anxious to

talk about it.

11. What has your track record been?

Before you accept a salesman's assurance that he can make

money for you, you have the right to know what his performance

has been in making money for others. And ask to have the

information (if there is any) in writing. Boasting over the

phone is one thing; putting it down on paper is quite another.

In any case, even if you are able to obtain a documented

performance record, don't lose sight of the fact that past

performance in itself provides no assurance of future

performance.

12. When and where can I meet with you or with another

representative of your firm?

Chances are a crooked operator--particularly if he is

operating out of a telephone boiler-room--isn't going to take

the time to visit with you and even more certainly doesn't want

you to see his place of business.

13. Where, exactly, will my money be? And what type of regular

accounting statements do you provide?

In many investment areas, such as futures trading, firms

are required to maintain their customers' funds in segregated

accounts at all times. Any mingling of investors' funds with

those of the firm or its principals is prohibited. You might

also want to find out what, if any, routine outside audits the

firm's account records are subject to.

14. How much of my money would go for commissions,

management fees and the like?

And ask whether there will be other costs such as interest

or storage charges, or whether the investment agreement

involves any type of profit sharing arrangement in which the firms'

principals participate. Insist on specific answers, not glib

and evasive responses such as "that's not important" or "what's

really important is how much money you are going to make." And,

again, get it in writing, just as you would any other type of contract.

15. How can I liquidate (i.e. sell the item I'd be investing

in) if and when I decide I want my money?

If you find that the investment is illiquid, or there would

be substantial costs if liquidated, or that you are unable to

get straight and solid answers, these are all things to consider

in deciding whether you want to invest.

16. If disputes should arise, how can they be resolved?

Short of having to go to court to sue someone, does the

company or regulatory organization provide a mechanism for

resolving disputes equitably and inexpensively through

arbitration, mediation, or a reparations procedure? Aside from

seeking important information, you may be able to detect whether

the salesperson is uncomfortable or impatient with this line of

questioning. Swindlers generally will be.

Before You Invest, Investigate

Asking some or even all of the questions just suggested

isn't likely to produce straight answers from a crooked

investment promoter but, as indicated, the very fact that you

are asking such questions can be a turn-off. Bear in mind,

however, that no matter how persistently or skillfully you pose

the questions, experienced con men are at least equally skilled

in evading them, in providing downright dishonest answers, and

in refocusing the conversation on your "tremendous profit

opportunity."

Bear in mind also that, while separating you from your

money is the swindler's primary goal, the very last thing he

wants you to do is check him out. That could cause you not to

invest or, worse still, alert regulators that someone they know

well has set up shop in a new area or is running a new scam.

For this reason, most con men deliberately make themselves

difficult to investigate: By tailoring their schemes to operate

in regulatory cracks where federal or national regulatory

organizations may lack clear-cut jurisdiction; by operating in

states or communities where authorities are known to be

short-staffed or occupied with more pressing criminal

activities; by changing their names or modus operandi, by

stressing the urgency of the investment so you won't have time

to investigate; and by targeting victims who may not know how

or where to check them out.

Moreover, as described in swindle scenarios on pages 8,

9, and 10 of this booklet, con men have numerous and ingenious

ways of seeking to convince you there is no need to investigate.

For example, your friends, neighbors or business associates

invested and they made money, right? That, of course, is why

ever-popular Ponzi schemes (named after the first person to

perfect the referral technique) are so prevalent--and why you

should never make investments based on tips, no matter how

trustworthy the source.

While there is no way to know for certain whether a

particular investment will make money or lose money, there is

one thing you can be certain of: Any money you hand over to an

investment swindler is lost the moment you part with it. The

question is, how do you check out someone who is offering what

sounds like an irresistible investment offer? Here are some of

the ways:

* Find out whether the local police department or Better

Business Bureau has complaints on file.

If so, you can make your investment decision accordingly.

But be aware that the absence of local complaints doesn't

necessarily mean a firm or individual is on the up-and-up.

It may simply mean that investors haven't yet become aware

that they've been bilked. Or it may mean you will have the

distinction of becoming the first victim in town. It could

also mean that other victims have been too embarrassed to

report their losses. Regrettably, that's not uncommon.

* Make a phone call to the financial editor of your local newspaper.

Although newspapers don't give endorsements or make

investment recommendations, they may be aware of a swindler

who is working a scam in the area--and may even have

published a warning article that you happened to miss. Then

too, if readers are being pitched with suspicious-sounding

investment offers, that's something an investigative

reporter might want to look into.

* If the investment offer isn't local, don't be reluctant to

make a long distance phone call or two.

It could be that the police, Better Business Bureau or

newspaper in the community where the offer is coming from

will be able to provide information. Again, however, even

the absence of such complaints doesn't necessarily mean the

firm is legitimate. Some swindlers--particularly telephone

boiler-room operators--try to maintain a low profile in

their local areas. That lessens the likelihood of their

coming to the attention of local authorities; it prevents

prospects from dropping by to see their operations; and it

makes it more difficult for out-of-towners to discover what

they are up to.

* Check to see if your city or state has a consumer

protection agency.

Many do. If so, there may be information there about the

person or firm that's offering the investment you are

interested in. In any case, the agency should be able to

provide names, addresses and phone numbers of other places

you can check.

* Contact regulators.

The majority of individuals and companies offering

investments to the public are subject to some sort of

regulation--and may be subject to multiple regulation.

Those which trade in futures contracts and options on

futures contracts are regulated by the Commodity Futures

Trading Commission, a federal agency, and by National

Futures Association, an industry-wide self-regulatory

organization authorized by Congress. In the securities and

securities options business, the federal regulatory agency

is the Securities and Exchange Commission. There is also an

industry self-regulatory organization, the National

Association of Securities Dealers.

The Federal Trade Commission has jurisdiction over

advertising, franchises and business opportunities. Deals

involving interstate promotion of land sales are regulated by

the federal Department of Housing and Urban Development.

By contacting the appropriate regulatory organization, you

can generally find out whether the firm or person is properly

registered to engage in that type of business and whether any

public disciplinary actions have been taken against them. A

list of some of the regulators you can check with is provided

on the inside back cover of this booklet.

* Write or phone law enforcement agencies.

Whether or not a person or firm is subject to the scrutiny

of a regulatory organization, the fact is that fraud is against

the law in every state of the nation. And if it involves

interstate commerce--including the use of the mails or phone

lines--federal criminal statutes apply. If an investment sounds

suspicious, check with the appropriate agency. They may be able

to furnish information or conduct an investigation of their own.

The following are some you could contact:

The office of the local public prosecutor, the state

attorney general, and the state securities administrator.

Someone in the local courthouse should be able to give you

names, addresses and phone numbers.

If the mails are used in promoting or operating a phony

investment scheme, federal Postal Inspectors want to know about

it. The postmaster in your community can put you in touch with

them. Fraud involving any form of interstate commerce is also

of interest to the Federal Bureau of Investigation. The nearest

office should be listed in your phone directory. The listing on

the inside back cover of this booklet includes headquarter

addresses of the U.S. Postal Inspector in Charge and the FBI.

Sure it can take some time, effort and possibly expense to

thoroughly check out an investment proposal, but if you have

any doubt about whether it's worth the trouble, talk with people

who didn't and wish they had!

Finally, Don't Lose Touch with Your Money

The need to exercise good financial sense doesn't stop once

you've decided to invest. It's possible, all your precautions

notwithstanding, that you may have turned your money over to a

swindler. It's also possible that what didn't start out to be a

swindle may turn into one if the promoter finds himself in

financial trouble or with too many poor investments on his

hands. That can lead to cover-up bookkeeping or, worse yet, a

decision by the promoter to take flight with what's left of his

customers' money.

It's important to continuously monitor your investments

and to be alert for any telltale signs that things aren't quite

the way they should be. The person who sold you the investment,

for example, may suddenly become inaccessible--continuously

tied up on the telephone or unwilling to return your calls,

busy with clients, or out-of-town on important business

matters. Or various documents or accounting statements you

were promised don't arrive. Or information you do receive is

vague or at variance from what you had been led to expect. Or

money that was supposed to have been paid to you isn't

received, and instead of checks you get excuses.

If you become suspicious or overly uncomfortable with an

investment you've made--and if you are unable to totally

resolve your concerns--the best thing you can do is try to get

out of it. And do so as quickly as possible. That means

demanding your money back, accompanied, if necessary, by

threats to contact authorities.

You might or might not get it. The best you can hope for,

if indeed there's fraud involved, is that the swindler may

decide to refund your money rather than risk having you blow

the whistle while he is still on the prowl for new investors.

If that happens, consider yourself more fortunate than most.

Be aware, if you do decide to try and get a refund, that

the person who was smooth-talking enough to get your money in

the first place will unleash all his skills to persuade you to

leave it with him. No doubt, he will have some answer for all

of your concerns. And some explanation for all apparent

irregularities. And, no doubt you will be told that backing out

now would be anything from contractually illegal to a terrible

financial mistake. Swindlers figure that every once in a while

some of their more fidgety investors simply have to be

reconvinced. He may tell you that you are so close to making

really big money, or the investment now looks even more

profitable than originally expected.

Believe him at your own peril.

If you do insist on a refund of your investment, insist on

it immediately Ask to pick it up yourself, or offer to pay the

cost of having it sent by overnight mail or wired directly to

your bank. Don't settle for "it will take a week or two" or

"the check is in the mail." As everyone knows, checks seem to

be lost more often than any other type of mail!

If you don't get your investment back (and chances are you

won't), or even if you do and still suspect a swindle, report

it promptly to the appropriate authorities and regulatory

officials. They may be able to conduct an investigation and, if

called for, seek legal action to impound whatever funds the

firm still has.

Bottom line, the unfortunate reality is that very few

victims of investment fraud ever again see a cent of their

money. It's also a reality that the business of swindling will

continue to flourish as long as unwary investors provide prey

for unscrupulous promoters. Hopefully, the information in this

booklet--if heeded--will help to assure that a swindler's next

fortune won't be made at the expense of your misfortune.

6/92

Below is a list of names, addresses and phone numbers of

organizations and agencies noted in this brochure:

Commodity Futures Trading Commission

2033 K St., N.W.

Washington, D.C. 20581

202.254.6387

Federal Bureau of Investigation

Justice Department

9th St. & Pennsylvania Ave., N.W.

Washington, D.C. 20535

202.234.3691

Federal Trade Commission

6th St. & Pennsylvania Ave., N.W.

Washington, D.C. 20580

202.326.3650

Housing and Urban Development Department

Interstate Land Sales Registration

HUD Building

451 7th St., S.W. Room 6262

Washington, D.C. 20410-8000

202.755.0502

National Association of Securities Dealers

1735 K St., N.W.

Washington, D.C. 20006

202.728.8044

National Futures Association

200 W. Madison, Suite 1600

Chicago, IL 60606-3447

Toll Free: 800.621.3570

In IL: 800.572.9400

Securities and Exchange Commission

450 Fifth St., N.W.

Washington, D.C. 20006

202.728.8233

United States Postal Service

Chief Postal Inspector

Room 3021

Washington, D.C. 20260-2100

202.268.4267

[Graphic Omitted]

INVEST WISELY

2007-12-05T00:35:00.002-08:00

INVEST WISELY

An Introduction To Mutual Funds

Advice From The U.S. Securities and Exchange Commission

TABLE OF CONTENTS

I. A MUTUAL FUND CHECKLIST

II. WHY MUTUAL FUNDS?

III. HOW MUTUAL FUNDS WORK

HOW TO BUY AND SELL SHARES

TERMS TO KNOW

HOW FUNDS CAN EARN YOU MONEY

TAXES

IV. KINDS OF MUTUAL FUNDS

MONEY MARKET FUNDS

BOND (FIXED INCOME) FUNDS

STOCK (EQUITY) FUNDS

A WORD ABOUT DERIVATIVES

V. COMPARING DIFFERENT FUNDS

VIEWING PAST PERFORMANCE

TIPS FOR COMPARING PERFORMANCE

COMPARING COSTS

TERMS TO KNOW

TIPS FOR COMPARING COSTS

OTHER SOURCES OF INFORMATION

VI. IF YOU HAVE PROBLEMS OR QUESTIONS

SEC OFFICES

I. A MUTUAL FUND CHECKLIST

* Mutual funds are NOT guaranteed or insured by any bank or

government agency. Even if you buy through a bank and the

fund carries the bank's name, there is no guarantee. You

can lose money. (see Part IV "Kinds of Mutual Funds")

* Mutual funds ALWAYS carry investment risks. Some types

carry more risk than others. (see Part IV "Kinds of Mutual Funds")

* Understand that a higher rate of return typically involves

a higher risk of loss. (see Part IV "Kinds of Mutual Funds")

* Past performance is not a reliable indicator of future

performance. Beware of dazzling performance claims.

(see Part V "Comparing Different Funds")

* ALL mutual funds have costs that lower your investment

returns. (see Part V "Comparing Different Funds")

* You can buy some mutual funds by contacting them directly.

Others are sold mainly through brokers, banks, financial

planners, or insurance agents. If you buy through these

financial professionals, you generally will pay an extra

sales charge for the benefit of their advice.

* Shop around. Compare a mutual fund with others of the

same type before you buy.

October, 1994

II. WHY MUTUAL FUNDS?

Mutual funds can be a good way for people to invest in stocks,

bonds, and other securities. Why?

* Mutual funds are managed by professional money managers.

* By owning shares in a mutual fund instead of buying individual

stocks or bonds directly, your investment risk is spread out.

* Because your mutual fund buys and sells large amounts of

securities at a time, its costs are often lower than what you

would pay on your own.

This document explains the basics of mutual fund investing --

how a mutual fund works, what factors to consider before

investing, and how to avoid common pitfalls.

There are sources of information that you should consult before

you invest in mutual funds. The most important of these is the

prospectus of any fund you are considering. The prospectus is

the fund's selling document and contains information about costs,

risks, past performance, and the fund's investment goals.

Request a prospectus from a fund, or from a financial

professional if you are using one. Read the prospectus before

you invest.

Before you buy a mutual fund, make sure it is right for you.

III. HOW MUTUAL FUNDS WORK

A mutual fund is a company that brings together money from

many people and invests it in stocks, bonds, or other securities.

(The combined holdings of stocks, bonds, or other securities and

assets the fund owns are known as its portfolio.) Each investor

owns shares, which represent a part of these holdings.

HOW TO BUY AND SELL SHARES

You can buy some mutual funds by contacting them directly.

Others are sold mainly through brokers, banks, financial

planners, or insurance agents. All mutual funds will redeem (buy

back) your shares on any business day and must send you the

payment within seven days.

You can find out the value of your shares in the financial pages

of major newspapers; after the fund's name, look for the column

marked "NAV."

TERMS TO KNOW

Net Asset Value per share (NAV): NAV is the value of one share

in a fund.

When you buy shares, you pay the current NAV per share, plus

any sales charge (also called a sales load). When you sell your

shares, the fund will pay you NAV less any other sales load

(See Part V "Comparing Different Funds"). A fund's NAV goes

up or down daily as its holdings change in value.

Example: You invest $1,000 in a mutual fund with an NAV of

$10.00. You will therefore own 100 shares of the fund. If the

NAV drops to $9.00 (because the value of the fund's portfolio

has dropped), you will still own 100 shares, but your investment is

now worth $900. If the NAV goes up to $11.00, your investment

is worth $1,100. (This example assumes no sales charge.)

HOW FUNDS CAN EARN YOU MONEY

You can earn money from your investment in three ways.

First, a fund may receive income in the form of dividends and

interest on the securities it owns. A fund will pay its

shareholders nearly all of the income it has earned in the form

of dividends.

Second, the price of the securities a fund owns may increase.

When a fund sells a security that has increased in price, the

fund has a capital gain. At the end of the year, most funds

distribute these capital gains (minus any capital losses) to investors.

Third, if a fund does not sell but holds on to securities that

have increased in price, the value of its shares (NAV) increases.

The higher NAV reflects the higher value of your investment. If

you sell your shares, you make a profit (this also is a capital

gain).

Usually funds will give you a choice: the fund can send you

payment for distributions and dividends, or you can have them

reinvested in the fund to buy more shares, often without paying

an additional sales load.

TAXES

You will owe taxes on any distributions and dividends in the year

you receive them (or reinvest them). You will also owe taxes on

any capital gains you receive when you sell your shares. Keep

your account statements in order to figure out your taxes at the

end of the year.

If you invest in a tax-exempt fund (such as a municipal bond

fund), some or all of your dividends will be exempt from federal

(and sometimes state and local) income tax. You will, however,

owe taxes on any capital gains.

IV. KINDS OF MUTUAL FUNDS

You take risks when you invest in any mutual fund. You may lose

some or all of the money you invest (your principal), because the

securities held by a fund go up and down in value. What you

earn on your investment also may go up or down.

Each kind of mutual fund has different risks and rewards.

Generally, the higher the potential return, the higher the risk of loss.

Before you invest, decide whether the goals and risks of any fund

you are considering are a good fit for you. To make this

decision, you may need the help of a financial adviser. There

are also investment books and services to guide you.

The three main categories of mutual funds are money market

funds, bond funds, and stock funds. There are a variety of types

within each category.

1. MONEY MARKET FUNDS have relatively low risks,

compared to other mutual funds. They are limited by law to

certain high- quality, short-term investments. Money market

funds try to keep their value (NAV) at a stable $1.00 per share,

but NAV may fall below $1.00 if their investments perform poorly.

Investor losses have been rare, but they are possible.

A WORD ABOUT BANKS AND MUTUAL FUNDS

Banks now sell mutual funds, some of which carry the bank's

name. But mutual funds sold in banks, including money market

funds, are not bank deposits. Don't confuse a "money market

fund" with a "money market deposit account." The names are

similar, but they are completely different:

* A money market fund is a type of mutual fund. It is not

guaranteed, and comes with a prospectus.

* A money market deposit account is a bank deposit. It is

guaranteed, and comes with a Truth in Savings form.

2. BOND FUNDS (also called FIXED INCOME FUNDS) have

higher risks than money market funds, but seek to pay higher

yields. Unlike money market funds, bond funds are not restricted

to high-quality or short-term investments. Because there are

many different types of bonds, bond funds can vary dramatically

in their risks and rewards.

Most bond funds have credit risk, which is the risk that

companies or other issuers whose bonds are owned by the fund

may fail to pay their debts (including the debt owed to holders of

their bonds). Some funds have little credit risk, such as those

that invest in insured bonds or U.S. Treasury bonds. But be

careful: nearly all bond funds have interest rate risk, which

means that the market value of the bonds they hold will go down

when interest rates go up. Because of this, you can lose money

in any bond fund, including those that invest only in insured

bonds or Treasury bonds.

Long-term bond funds invest in bonds with longer maturities

(length of time until the final payout). The values (NAVs) of

long-term bond funds can go up or down more rapidly than those

of shorter-term bond funds.

3. STOCK FUNDS (also called EQUITY FUNDS) generally

involve more risk than money market or bond funds, but they also

can offer the highest returns. A stock fund's value (NAV) can rise

and fall quickly over the short term, but historically stocks have

performed better over the long term than other types of

investments.

Not all stock funds are the same. For example, growth funds

focus on stocks that may not pay a regular dividend but have the

potential for large capital gains. Others specialize in a

particular industry segment such as technology stocks.

A WORD ABOUT DERIVATIVES

Some funds may face special risks if they invest in derivatives.

Derivatives are financial instruments whose performance is

derived, at least in part, from the performance of an underlying

asset, security or index. Their value can be affected

dramatically by even small market movements, sometimes in

unpredictable ways.

There are many types of derivatives with many different uses.

They do not necessarily increase risk, and may in fact reduce

risk. A fund's prospectus will disclose how it may use

derivatives. You may also want to call a fund and ask how it

uses these instruments.

V. COMPARING DIFFERENT FUNDS

Once you identify the types of funds that interest you, it is

time to look at particular funds in those categories.

VIEWING PAST PERFORMANCE

A fund's past performance is not as important as you might think.

Advertisements, rankings, and ratings tell you how well a fund

has performed in the past. But studies show that the future is

often different. This year's "number one" fund can easily become

next year's below average fund. (NOTE: Although past

performance is not a reliable indicator of future performance,

volatility of past returns is a good indicator of a fund's future

volatility.)

TIPS FOR COMPARING PERFORMANCE

* Check the fund's total return. You will find it in the

Financial Highlights, near the front of the prospectus.

Total return measures increases and decreases in the value

of your investment over time, after subtracting costs.

* See how total return has varied over the years. The

Financial Highlights in the prospectus show yearly total

return for the most recent 10-year period. An impressive

10-year total return may be based on one spectacular year

followed by many average years. Looking at year-to-year

changes in total return is a good way to see how stable

the fund's returns have been.

COMPARING COSTS

Costs are important because they lower your returns. A fund that

has a sales load and high expenses will have to perform better

than a low-cost fund, just to stay even with the low-cost fund.

Find the fee table near the front of the fund's prospectus, where

the fund's costs are laid out. You can use the fee table to

compare the costs of different funds.

The fee table breaks costs into two main categories:

1. sales loads and transaction fees (paid when you buy, sell,

or exchange your shares), and

2. ongoing expenses (paid while you remain invested in the

fund).

Sales Loads

The first part of the fee table will tell you if the fund charges

any sales loads.

No-load funds do not charge sales loads. When you buy no-load

funds, you make your own choices, without the assistance of a

financial professional. There are no-load funds in every major

fund category. Even no-load funds have ongoing expenses,

however, such as management fees.

When a mutual fund charges a sales load, it usually pays for

commissions to people who sell the fund's shares to you, as well

as other marketing costs. Sales loads buy you a broker's

services and advice; they do not assure superior performance.

In fact, funds that charge sales loads have not performed better

on average (ignoring the loads) than those that do not charge

sales loads.

TERMS TO KNOW

Front-end load: A front-end load is a sales charge you pay when

you buy shares. This type of load, which by law cannot be higher

than 8.5% of your investment, reduces the amount of your

investment in the fund.

Example: If you have $1,000 to invest in a mutual fund with a 5%

front-end load, $50 will go to pay the sales charge, and $950

will be invested in the fund.

Back-end load: A back-end load (also called a deferred load) is

a sales charge you pay when you sell your shares. It usually

starts out at 5% or 6% for the first year and gets smaller each

year after that until it reaches zero (say, in year six or seven

of your investment).

Example: You invest $1,000 in a mutual fund with a 6% back-

end load that decreases to zero in the seventh year. Let's

assume for the purpose of this example that the value of your

investment remains at $1,000 for seven years. If you sell your

shares during the first year, you only will get back $940 (ignoring

any gains or losses). $60 will go to pay the sales charge. If you

sell your shares during the seventh year, you will get back

$1,000.

Ongoing Expenses

The second part of the fee table tells you the kinds of ongoing

expenses you will pay while you remain invested in the fund. The

table shows expenses as a percentage of the fund's assets,

generally for the most recent fiscal year. Here, the table will

tell you the management fee (which pays for managing the fund's

portfolio), along with any other fees and expenses.

High expenses do not assure superior performance. Higher

expense funds do not, on average, perform better than lower

expense funds. But there may be circumstances in which you

decide it is appropriate for you to pay higher expenses. For

example, you can expect to pay higher expenses for certain

types of funds that require extra work by its managers, such as

international stock funds, which require sophisticated research.

You may also pay higher expenses for funds that provide special

services, like toll-free telephone numbers, check-writing and

automatic investment programs.

A difference in expenses that may look small to you can make a

big difference in the value of your investment over time.

Example: Say you invest $1,000 in a fund. Let's assume for the

purpose of this example that you receive a flat rate of return of

5% before expenses. If the fund has expenses of 1.5%, after 20

years you would end up with roughly $1,990. If the fund has

expenses of 0.5%, you would end up with more than $2,410.

This is a 22% difference.

TERMS TO KNOW

Rule 12b-1 fee: One type of ongoing fee that is taken out of

fund assets has come to be known as a rule 12b-1 fee. It most

often is used to pay commissions to brokers and other

salespersons, and occasionally to pay for advertising and other

costs of promoting the fund to investors. It usually is between

0.25% and 1.00% of assets annually.

Funds with back-end loads usually have higher rule 12b-1 fees.

If you are considering whether to pay a front-end load or a back-

end load, think about how long you plan to stay in a fund. If

you plan to stay in for six years or more, a front-end load may

cost less than a back-end load. Even if your back-end load has

fallen to zero, over time you could pay more in rule 12b-1 fees

than if you paid a front-end load.

TIPS FOR COMPARING COSTS

* Beware of a salesperson who tells you, "This is just like

a no-load fund." Even if there is no front-end load,

check the fee table in the prospectus to see what other

loads or fees you may have to pay.

* Check the fee table to see if any part of a fund's fees or

expenses has been waived. If so, the fees and expenses

may increase suddenly when the waiver ends (the part of

the prospectus after the fee table will tell you by how much).

* Many funds allow you to exchange your shares for shares of

another fund managed by the same adviser. The first part

of the fee table will tell you if there is any exchange fee.

Shop wisely. Compare fees and expenses before you invest.

V. OTHER SOURCES OF INFORMATION

Read the sections of the prospectus that discuss the risks,

investment goals, and investment policies of any fund that you

are considering. Funds of the same type can have significantly

different risks, objectives and policies.

All mutual funds must prepare a Statement of Additional

Information (SAI, also called Part B of the prospectus). It

explains a fund's operations in greater detail than the

prospectus. If you ask, the fund must send you an SAI.

You can get a clearer picture of a fund's investment goals and

policies by reading its annual and semi-annual reports to

shareholders. If you ask, the fund will send you these reports.

You can also research funds at most libraries. Helpful resources

include fund investment books, investor magazines and newspapers.

The fund companies themselves can also provide information.

VI. IF YOU HAVE PROBLEMS OR QUESTIONS

If you encounter a problem or have a question concerning a

mutual fund that you believe can be addressed by the SEC,

contact an SEC consumer specialist at one of the offices listed

on the next page.

Remember: There are no guarantees in mutual fund investing.

Inform yourself and exercise your judgment carefully before you invest.

SEC OFFICES

U.S. Securities and Exchange Commission Headquarters

Office of Consumer Affairs

450 Fifth Street, N.W.

Washington, D.C. 20549.

(202) 942-7040.

Northeast Regional Office

7 World Trade Center, Suite 1300

New York, NY 10048

(212) 748-8000

Boston District Office

73 Tremont Street, Suite 600

Boston, MA 02108-3912

(617) 424-5900

Philadelphia District Office

601 Walnut Street, Suite 1005 E

Philadelphia, PA 19106-3322

(215) 597-3100

Southeast Regional Office

1401 Brickell Avenue, Suite 200

Miami, FL 33131

(305) 536-5765

Atlanta District Office

3475 Lenox Road, N.E., Suite 1000

Atlanta, GA 30326-1232

(404) 842-7600

Midwest Regional Office

500 West Madison Street, Suite 1400

Chicago, IL 60661-2511

(312) 353-7390

Central Regional Office

1801 California Street, Suite 4800

Denver, CO 80202-2648

(303) 391-6800

Fort Worth District Office

801 Cherry Street, 19th Floor

Fort Worth, TX 76102

(817) 334-3821

Pacific Regional Office

5670 Wilshire Boulevard, 11th Floor

Los Angeles, CA 90036-3648

(213) 965-3998

San Francisco District Office

44 Montgomery Street, Suite 1100

San Francisco, CA 94104

(415) 705-2500_

SWINDLERS ARE CALLING

2007-12-05T00:35:00.001-08:00

SWINDLERS ARE CALLING

8 THINGS You Should Know About Telemarketing Fraud

1 Most telephone sales calls are made by legitimate

businesses offering legitimate products or services.

But wherever honest firms search for new customers, so do

swindlers. Phone fraud is a multi-billion dollar business that

involves selling everything from bad or non-existent

investments to the peddling of misrepresented products and

services. Everyone who has a phone is a prospect; whether you

become a victim is largely up to you.

2 There is no way to positively determine whether a sales

call is on the up and up simply by talking with someone on

the phone.

No matter what questions you ask or how many you ask,

skilled swindlers have ready answers. That's why sales calls

from persons or organizations that are unknown to you should

always be checked out before you actually buy or invest.

Legitimate callers have nothing to hide.

3 Phone swindlers are likely to know more about you than you

know about them.

Depending on where they got your name in the first place,

they may know your age and income, health and hobbies,

occupation and marital status, education, the home you live in,

what magazines you read, and whether you've bought by phone

in the past.

Even if your name came from the phone book, telephone con

men (and women) assume that, like most people, you would be

interested in having more income, that you're receptive to a

bargain, that you are basically sympathetic to people in need,

and that you are reluctant to be discourteous to someone on the

phone. As admirable as such characteristics may be, they help

make the swindler's job easier. Swindlers also exploit less

admirable characteristics, such as greed.

4 Fraudulent sales callers have one thing in common: They

are skilled liars and experts at verbal camouflage.

Their success depends on it. Many are coached to "say

whatever it takes" by operators of the "boilerrooms" where they

work at rows of phone desks making hundreds of repetitious

calls, hour after hour. The first words uttered by most victims

of phone fraud are, "the caller sounded so believable..."

5 Perpetrators of phone fraud are extremely good at sounding

as though they represent legitimate businesses.

They offer investments, sell subscriptions, provide

products for homes and offices, promote travel and vacation

plans, describe employment opportunities, solicit donations,

and the list goes on. Never assume you'll "know a phone scare

when you hear one." Even if you've read lists of the kinds of

schemes most commonly practiced, innovative swindlers

constantly devise new ones.

6 The motto of phone swindlers is, "just give us a few good

'mooches,'" one of the terms they use to describe their victims.

Notwithstanding that most victims are otherwise

intelligent and prudent people, even boilerroom operators

express astonishment at how many people "seem to keep their

checkbooks by the telephone!" Sadly, some families part with

savings they worked years to accumulate on the basis of little

more than a 15-minute phone conversation -- less time than

they'd spend considering the purchase of a household appliance.

7 The person who "initiates" the phone call may be you.

It's not uncommon for phone crooks to use direct mailings

and advertise in reputable publications to encourage prospects

to make the initial contact. It's another way swindlers imitate

the perfectly acceptable marketing practices of legitimate

businesses. Thus, just because you may have written or phoned

for "additional information" about an investment, product, or

service doesn't mean you should be any less cautious about

buying by phone from someone you don't know.

8 Victims of phone fraud seldom get their money back -- or,

at best, no more than a few cents on the dollar.

Despite efforts of law enforcement and regulatory agencies

to provide what help they can to victims, swindlers generally

do the same thing other people do when they get money: they

spend it!

9 TIP-OFFS

That a Caller Could be a Crook

1 High-pressure sales tactics.

The call may not begin that way, but if the swindler

senses you're not going to be an easy sale, he or she may shift

to a hard sell. This is in contrast to legitimate businesses,

most of which respect an individual's right to be "not

interested."

High-pressure sales tactics take a variety of forms but the

common denominator is usually a stubborn reluctance to accept

"no" as an answer. Some callers may resort to insult and

argument, questioning the prospect's intelligence or ability to

make a decision, often ending with a warning that "you're going

to be very sorry if you don't do such and such." Or, "you'll

never get rich if you don't take a chance."

2 Insistence on an immediate decision.

If it's an investment, the caller may say something like,

"the market is starting to move even as we talk." For a product

or service, the urgency pitch may be that "there are only a few

left" or "the offer is about to expire." The bottom line is

that swindlers often insist that you should (or must) make your

decision right now. And they always give a reason.

3 The offer sounds too good to be true.

The oldest advice around is still the best: "An offer that

sounds too good to be true probably is." Having said this,

however, you should be aware that some phone swindlers are

becoming more sophisticated. They may make statements that

sound just reasonable enough (if only barely) to keep you from

hanging up. Or they may make three or four statements you know

to be true so that when they spring the big lie for what

they're selling, you'll be more likely to believe that, too.

That's where the verbal camouflage comes in.

4 A request for your credit card number for any purpose

other than to make a purchase.

A swindler may ask you for your credit card number -- or,

in the most brash cases, several credit card numbers -- for

"identification," or "verification" that you have won

something, or merely as an "expression of good faith" on your

part. Whatever the ploy, once a swindler has your card number

it is likely that unauthorized charges will appear on your

account.

5 An offer to send someone to your home or office to pick up

the money, or some other method such as overnight mail to

get your funds more quickly.

This is likely to be part of their "urgency" pitch. It

could be an effort to avoid mail fraud charges by bypassing

postal authorities or simply a way of getting your money before

you change your mind.

6 A statement that something is "free," followed by a

requirement that you pay for something.

While honest firms may promote free phone offers to

attract customers, the difference with swindlers is that you

generally have to pay in some way to get whatever it is that's

"free." The cost may be labeled as a handling or shipping

charge, or as payment for an item in addition to the "prize."

Whatever you receive "free" -- if anything -- most likely will

be worth much less than what you've paid.

7 An investment that's "without risk."

Except for obligations of the U.S. Government, all

investments have some degree of risk. And if there were any

such thing as a risk-free investment with big profits assured,

the caller certainly wouldn't have to dial through the phone

book to find investors!

8 Unwillingness to provide written information or references

(such as a bank or names of satisfied customers in your

area) that you can contact.

Swindlers generally have a long list of reasons: "There

isn't time for that," or "it's a brand new offer and printed

material isn't available yet," or "customer references would

violate someone's privacy." Even with references, be cautious,

some swindlers pay off a few customers to serve as references.

The caller may also be reluctant to answer questions by

phone -- such as inquiries about the firm or even how and where

you can contact the firm. The swindler may insist on contacting

you "for your convenience."

9 A suggestion that you should make a purchase or investment

on the basis of "trust."

Trust is a laudable trait, but it shouldn't be dispensed

indiscriminately -- certainly not to unknown persons calling on

the phone and asking that you send them money. Even so, "trust

me" is a pitch that swindlers sometimes employ when all else fails.

10 WAYS

To Avoid Becoming a Victim

1 Don't allow yourself to be pushed into a hurried decision.

No matter what you're told to the contrary, the reality is

that at least 99 percent of everything that's a good deal today

will still be a good deal a week from now! And the other one

percent isn't generally worth the risk you'd be taking to find out.

There may be times when you'll want to make a prompt

decision, but those occasions shouldn't involve an irrevocable

financial commitment to purchase a product or make an

investment that you're not familiar with from a caller that you

don't know. And purchase decisions should never be made

under pressure.

2 Always request written information, by mail, about the

product, service, investment or charity and about the

organization that's offering it.

For legitimate firms, this shouldn't be a problem.

Swindlers, however, may not want to give you time for adequate

consideration, may not have written material available, or may

not want to risk a run-in with legal or regulatory authorities

by putting fraudulent statements in writing.

Also insist on having enough time to study any information

provided before being contacted again or agreeing to meet with

anyone in person. Some high-pressure telephone sales calls are

solely for the purpose of persuading you to meet with an even

higher-pressure sales person in your home!

3 Don't make any investment or purchase you don't fully

understand.

A beauty of the American economy is the diversity of

investment vehicles and other products available. But it's a

diversity that includes the bad as well as the good. Unless you

fully understand what you'd be buying or investing, you can be

badly burned. Swindlers intentionally seek out individuals who

don't know what they are doing! They often attempt to flatter

prospects into thinking they are making an informed decision.

4 Ask what state or federal agencies the firm is regulated

by and/or is required to be registered with.

And if you get an answer, ask for a phone number or

address that you can use to contact the agency and verify the

answer yourself. If the firm says it's not subject to any

regulation, you may want to increase your level of caution accordingly.

5 Check out the company or organization.

If you assume a firm wouldn't provide you with

information, references, or regulatory contacts unless the

information was accurate and reliable, that's precisely what

swindlers want you to assume. They know that most people

never bother to follow through. Look at it this way: Most victims of

fraud contact a regulatory agency after they've lost their

money; it's far better to make the contact and obtain whatever

information is available while you still have your money.

6 If an investment or major purchase is involved, request

that information also be sent to your accountant,

financial advisor, banker, or attorney for evaluation and

an opinion.

Swindlers don't want you to seek a second opinion. Their

reluctance or evasiveness could be your tip-off.

7 Ask what recourse you would have if you make a purchase

and aren't satisfied.

If there's a guarantee or refund provision, it's best to

have it in writing and be satisfied that the business will

stand behind its guarantee before you make a final financial

commitment.

8 Beware of testimonials that you may have no way of

checking out.

They may involve nothing more than someone being paid a

fee to speak well of a product or service.

9 Don't provide personal financial information over the

phone unless you are absolutely certain the caller has a

bona fide need to know.

That goes especially for your credit card numbers and bank

account information. The only time you should give anyone your

credit card number is if you've decided to make a purchase and

want to charge it. If someone says they'll send a bill later

but they need your credit card number in the meantime, be

cautious and be certain you're dealing with a reputable company.

10 If necessary, hang up.

If you're simply not interested, if you become subject to

high-pressure sales tactics, if you can't obtain the

information you want or get evasive answers, or if you hear

your own better judgment whispering that you may be making a

serious mistake, just say good-bye.

SWINDLERS ARE CALLING

is prepared as a service to the public by:

National Partners Association

Public Affairs and Education

200 West Madison Street

Suite 1600

Chicago, Illinois 60606-3447

800-621-3570

800-572-9400 (in Illinois)

in association with:

Commodity Futures Trading Commission

2033 K Street, N.W.

Washington, DC 20581

Federal Trade Commission

6th & Pennsylvania Avenue, N.W.

Washington, DC 20580

Alliance Against Fraud in Telemarketing

c/o National Consumers League

815 15th Street, N.W.

Suite 516

Washington, DC 20005

202-639-8140

NINE WAYS TO LOWER

2007-12-05T00:34:00.000-08:00

NINE WAYS TO LOWER

YOUR AUTO INSURANCE COSTS

You may not realize it, but the insurance rates you pay

for your car can vary dramatically depending on the insurance

company, agent or broker you choose, the coverages you

request and the kind of car you drive. Listed below are a

number of things you can do right now to lower your insurance

costs.

1. COMPARISON SHOP.

Prices for the same coverage can vary by hundreds of

dollars, so it pays to shop around. Ask your friends, check the

yellow pages or call your state insurance department (phone

numbers are on back page). You can also check consumer

guides, insurance agents or companies. This will give you an

idea of price ranges and tell you which companies or agents

have the lowest prices. But don't shop price alone.

The insurer you select should offer both fair prices and

excellent service. Quality personal service may cost a bit

more, but provides added conveniences, so talk to a number

of insurers to get a feeling for the quality of their service. Ask

them what they would do to lower your costs. Check the

financial ratings of the companies too. Then, when you've

narrowed the field to three insurers, get price quotes.

2. ASK FOR HIGHER DEDUCTIBLES.

Deductibles represent the amount of money you pay before

you make a claim. By requesting higher deductibles on

collision and comprehensive (fire and theft) coverage, you can

lower your costs substantially. For example, increasing your

deductible from $200 to $500 could reduce your collision cost

by 15% to 30%.

3. DROP COLLISION AND/OR COMPREHENSIVE

COVERAGES ON OLDER CARS.

It may not be cost-effective to have collision or

comprehensive coverages on cars worth less than $1000

because any claim you make would not substantially exceed

annual cost and deductible amounts. Auto dealers and banks

can tell you the worth of cars.

4. ELIMINATE DUPLICATE MEDICAL COVERAGES.

If you have adequate health insurance, you may be paying

for duplicate medical coverage in your auto policy. In some

states, eliminating this coverage could lower your personal

injury protection (PIP) cost by up to 40%.

5. BUY A "LOW PROFILE" CAR.

Before you buy a new or used car, check into insurance

costs. Cars that are expensive to repair, or that are favorite

targets for thieves, have much higher insurance costs. Write to

the Insurance Institute for Highway Safety, 1005 North Glebe

Road, Arlington, VA 22201 and ask for the Highway Loss Data Chart.

6. CONSIDER AREA INSURANCE COST IF YOU ARE

MAKING A MOVE.

Costs tend to be lowest in rural communities and highest

in center cities where there is more traffic congestion.

7. TAKE ADVANTAGE Of LOW MILEAGE DISCOUNTS.

Some companies offer discounts to motorists who drive

fewer than a predetermined number of miles a year.

8. FIND OUT ABOUT AUTOMATIC SEAT BELT OR AIR BAG

DISCOUNTS.

You may be able to take advantage of discounts on some

coverages if you have automatic seat belts and/or air bags.

9. INQUIRE ABOUT OTHER DISCOUNTS.

Some insurers offer discounts for more than one car, no

accidents in three years, drivers over 50 years of age, driver

training courses, anti-theft devices, anti-lock brakes and good

grades for students. See the following page for a guide to

these and other discounts.

INQUIRE ABOUT DISCOUNTS FOR:

COMPANY A COMPANY B COMPANY C

$500 deductible _______ _______ _______

$1,000 deductible _______ _______ _______

More than 1 car _______ _______ _______

No Accidents

in 3 Years _______ _______ _______

No Moving Violations

in 3 Years _______ _______ _______

Drivers Over 50 Years

of Age _______ _______ _______

Driver Training Course _______ _______ _______

Anti-Theft Device _______ _______ _______

Low Annual Mileage _______ _______ _______

Automatic Seat Belt _______ _______ _______

Air Bag _______ _______ _______

Anti-Lock Brakes _______ _______ _______

Good Grades for

Students _______ _______ _______

Auto and Homeowners

Coverage with the

Same Company _______ _______ _______

College Students

Away From Home

Without a Car _______ _______ _______

OTHER DISCOUNTS:

_______________ _______ _______ _______

YOU CAN REACH YOUR STATE INSURANCE DEPARTMENT AT:

AL: 205-269-3550

AK: 907-465-2515

AS: 684-633-4116

AZ: 602-255-5400

AR: 501-686-2900

CA: 800-927-4357

CO: 303-894-7499

CT: 203-297-3800

DE: 800-282-8611

DC: 202-727-8002

FL: 800-342-2762

GA: 404-656-2056

GU: 671-477-5144

HI: 800-468-4644

ID: 208-334-2250

IL: 217-782-4515

IN: 800-622-4461

IA: 515-281-5705

KS: 800-432-2484

KY: 502-564-3630

LA: 504-342-5900

ME: 207-582-8707

MD: 800-492-6116

MA: 617-727-3357

MI: 517-373-9273

MN: 800-652-9747

MS: 601-359-3569

MO: 314-751-2640

MT: 800-332-6148

NE: 402-471-2201

NV: 800-992-0900

NH: 800-852-3416

NJ: 609-292-5363

NM: 505-827-4500

NY: 212-602-0203

NC: 800-662-7777

ND: 800-247-0560

OH: 800-686-1526

OK: 405-521-2828

OR: 503-378-4271

PA: 717-787-5173

PR: 809-722-8686

RI: 401-277-2223

SC: 803-737-6117

SD: 605-773-3563

TN: 800-342-4029

TX: 512-463-6464

UT: 801-530-6400

VT: 802-828-3301

VI: 809-774-2991

VA: 800-552-7945

WA: 800-562-6900

WV: 800-642-9004

WI: 800-236-8517

WY: 307-777-7401

FOR MORE INFORMATION, CALL THE NATIONAL

INSURANCE CONSUMER HELPLINE (NICH) AT 1-800-942-

4242

BUYING A USED CAR

2007-12-05T00:32:00.002-08:00

BUYING A USED CAR

This year, more than 16 million Americans will buy a used

car. If that's what you are planning, this guide may help you.

It explains your protections under the FTC's Used Car Rule and

offers some shopping suggestions, even if you are not buying

from a used car dealer.

Before you begin looking at used cars, think about what

car models and options you want and how much you are able or

willing to spend. You can learn about car models, options, and

prices by reading newspaper ads, both display and classified.

Also, your local library and book stores have magazines that

discuss and compare car models, options, and costs, as well as

provide information about frequency-of-repair records, safety

tests, and mileage. The U.S. Department of Transportation Auto

Safety Hotline (800-424-9393) will tell you if a car model has

ever been recalled and send you information about that recall.

Before You Look For a Used Car, Consider Costs.

Remember, the real cost of a car includes more than

the purchase price: it includes loan terms, such as interest

rates and the length of the loan. If you plan to finance the

car, you need to know how much money you can put down and

how much you can pay monthly. Dealers and lending institutions

offer a variety of interest rates and payment schedules, so you

will want to shop for terms. If, for example, you need low

monthly payments, consider making a large down payment or

getting financing that will stretch your payments over five

years, rather than the usual three. Of course, this longer

payment period means paying more interest and a higher total cost.

Reliability. You can learn how reliable a model is by

checking in publications for the frequency-of-repair records.

Find out what models have repair facilities in a location

convenient to you and if parts are readily available at the

repair facility.

Dealer Reputation. Find out from experienced people whose

opinions you respect which dealers in your area have good

reputations for sales and service. You may wish to call your

local consumer protection office and the Better Business Bureau

to find out if they have any complaints against particular dealers.

If You Buy a Used Car From a Dealer

If you go to a dealer for a used car, look for a "Buyers

Guide" sticker on the window of each car. The Buyers Guide,

required by the Federal Trade Commission's Used Car Rule,

gives you important information and suggestions to consider. The

Buyers Guide tells you:

* Whether the vehicle comes with a warranty and, if

so, what specific protection the dealer will provide;

* Whether the vehicle comes with no warranty ("as

is") or with implied warranties only;

* That you should ask to have the car inspected by

an independent mechanic before you buy;

* That you should get all promises in writing; and

* What some of the major problems are that may occur in any car.

The Used Car Rule requires dealers to post the Buyers

Guide on all used vehicles, including automobiles, light-duty

vans, and light-duty trucks. "Demonstrator" cars also must have

Buyers Guides. But Buyers Guides do not have to be posted on

motorcycles and most recreational vehicles. Individuals selling

fewer than six cars a year are not required to post Buyers Guides.

Whenever you purchase a used car from a dealer, you should

receive the original or an identical copy of the Buyers Guide

that appeared in the window of the vehicle you bought. The

Buyers Guide must reflect any changes in warranty coverage that

you may have negotiated with the dealer. It also becomes a part

of your sales contract and overrides any contrary provisions

that may be in that contract.

As you read this brochure, you can refer to the Buyers

Guide, shown on pages 6 through 8.

"As Is--No Warranty"

About one-half of all used cars sold by dealers come

"as is," which means there is no express or implied warranty.

If you buy a car "as is" and have problems with it, you must

pay for any repairs yourself. When the dealer offers a vehicle

for sale "as is," the box next to the "As Is--No Warranty"

disclosure on the Buyers Guide will be checked. If this box is

checked but the dealer makes oral promises to repair the

vehicle, have the dealer put those promises in writing on the

Buyers Guide.

Some states (Connecticut, Kansas, Maine, Maryland,

Massachusetts, Minnesota, Mississippi, New York, Rhode Island,

Vermont, West Virginia and the District of Columbia) do not

permit "as is" sales for most or all used motor vehicles.

"Implied Warranties Only"

Implied warranties exist under all state laws and come

with almost every purchase from a used car dealer, unless the

dealer tells you in writing that implied warranties do not

apply. Usually, dealers use the words "as is" or "with all

faults" to disclaim implied warranties. Most states require the

use of specific words.

"If the dealer makes oral promises, have the dealer put

those promises in writing."

The "warranty of merchantability" is the most common type

of implied warranty. This means that the seller promises that

the product will do what it is supposed to do. For example, a

car will run, a toaster will toast.

Another type of implied warranty is the "warranty of

fitness for a particular purpose." This applies when you buy a

vehicle on the dealer's advice that it is suitable for a

particular use. For example, a dealer who suggests that you buy

a specific vehicle for hauling a trailer warrants, in effect,

that the vehicle will be suitable for hauling a trailer.

If you buy a vehicle with a written warranty, but problems

arise that the warranty does not cover, you may still be

protected by implied warranties. Any limitation on the duration

of implied warranties must appear on the written warranty.

In those states that do not permit "as is" sales by

dealers, or if the dealer offers a vehicle with only implied

warranties, a disclosure entitled "Implied Warranties Only"

will be printed on the Buyers Guide in place of the "As Is"

disclosure. The box next to this disclosure would be checked if

the dealer chooses to sell the car with implied warranties and

no written warranty. A copy of the Buyers Guide with the

"Implied Warranties Only" disclosure is shown on page 7.

Dealer Warranties

When dealers offer a written warranty on a used vehicle,

they must fill in the warranty portion of the Buyers Guide.

Because the terms and conditions of written warranties can vary

widely, you may find it useful to compare warranty terms on

cars or negotiate warranty coverage.

Dealers may offer a full or limited warranty on all or

some of the systems or components of the vehicle. A "full"

warranty provides the following terms and conditions:

* Warranty service will be provided to anyone who owns the

vehicle during the warranty period when a problem is reported.

* Warranty service will be provided free of charge,

including such costs as returning the vehicle or removing

and reinstalling a system covered by the warranty, when necessary.

* At your choice, the dealer will provide either a

replacement or a full refund if the dealer is unable,

after a reasonable number of tries, to repair the vehicle

or a system covered by the warranty.

* Warranty service is provided without requiring you to

perform any reasonable duty as a precondition for

receiving service, except notifying the dealer that

service is needed.

* No limit is placed on the duration of implied warranties.

If any one of the above statements is not true, then the

warranty is "limited." A "full" or "limited" warranty need not

cover the entire vehicle. The dealer may specify only certain

systems for coverage under a warranty. Most used car warranties

are "limited," which usually means you will have to pay some of

the repair costs. By giving a "limited" warranty, the dealer is

telling you that there are some costs or responsibilities that

the dealer will not assume for systems covered by the warranty.

If the dealer offers a full or limited warranty, the

dealer must provide the following information in the "Warranty"

section of the Buyers Guide:

* The percentage of the repair cost that the dealer

will pay. For example, "the dealer will pay 100% of

the labor and 100% of the parts....";

* The specific parts and systems, such as the frame, body,

or brake system that are covered by the warranty. The back

of the Buyers Guide contains a list of descriptive names

for the major systems of an automobile where problems may occur;

* The duration of the warranty for each covered system. For

example, "30 days or 1,000 miles, whichever occurs first"; and

* Whether a deductible applies.

Under another federal law, the Magnuson-Moss Warranty Act,

you have a right to see a copy of the dealer's warranty before

a purchase. Examine the warranty carefully before you buy to

see what is covered and what is not. It contains more detailed

information than the Buyers Guide, such as a step-by-step

explanation of hoax to obtain repairs if a covered system or

component malfunctions. Also check who is legally responsible

for fulfilling the terms of the warranty. If a third party is

responsible, the best way to avoid potential problems is to

make sure that the third party is reputable and insured. You

can do this by asking the company for the name of their insurer

and then checking its performance record with your local Better

Business Bureau.

Unexpired Manufacturer's Warranties

If the used vehicle is still covered by the manufacturer's

original warranty, the dealer may include it in the "systems

covered/duration" section of the Buyers Guide. This does not

necessarily mean that the. dealer offers a warranty in addition

to the manufacturer's. In some cases, a manufacturer's original

warranty can be transferred to a second owner only upon payment

of a fee. If you have any questions, ask the dealer to let you

examine any unexpired warranty on the vehicle.

Service Contracts

When you buy a car, you may be offered a service contract,

which you can buy for an extra cost. In deciding whether you

want a service contract, consider:

* Whether the warranty that comes with your car already

covers the same repairs that you would get under the

service contract or whether the service contract

protection begins after the warranty runs out. Does the

service contract extend longer than the time you expect to

own the car? If so, is the service contract transferable

or is a shorter contract available?

* Whether the vehicle is likely to need repairs and their

potential costs. The value of a service contract is

determined by whether the cost of repairs is likely to be

greater than the price you pay for the service contract protection.

* Whether the service contract covers all parts and systems

of the car. Check out all claims carefully. Claims that

coverage is "bumper to bumper" may not be entirely accurate.

* Whether there is a deductible required, and, if so,

consider the amount and terms of the deductible.

* Whether the contract covers incidental expenses, such as

towing and the costs of a rental car while your car is

being serviced.

* Whether repairs and routine maintenance, such as oil

changes, can be performed at locations other than the

dealership from which you purchased the contract.

* Whether there is a cancellation and refund policy for the

service contract, and what the costs are if you cancel.

* Whether the dealer or company offering the service

contract is reputable. Read the contract carefully to

determine who is legally responsible for fulfilling the

terms of the contract. Some dealers sell service contracts

that are backed by a third party. If a third party is

responsible, you may wish to ask if the company is insured

and to check the company's performance with your local

Better Business Bureau.

If a service contract is offered, the dealer must mark the

box provided on the Buyers Guide, except in those states that

regulate service contracts under their insurance laws. If the

Buyers Guide does not include a reference to a service

contract, and you are interested, ask the salesperson whether

one is available.

When you purchase a service contract from the dealer

within 90 days of buying the vehicle, federal law prohibits the

dealer from disclaiming implied warranties on the systems

covered in that service contract. For example, if you buy a car

"as is," the car normally will not be covered by implied warranties.

But if you buy a service contract covering the engine, you

automatically get implied warranties on the engine, which may

give you protection beyond the scope of the service contract.

Make sure you receive a written confirmation that your service

contract is in effect.

Spoken Promises

The Buyers Guide warns consumers not to rely on spoken

promises. Oral promises are difficult, if not impossible, to

enforce. Make sure all promises you want are written into the

Buyers Guide and keep it.

Pre-Purchase Independent Inspection

The Buyers Guide also suggests you ask the dealer whether

you may have the vehicle inspected by your own mechanic. Some

dealers will let you take the car off the lot to get an

independent inspection. Others may have reasons, such as

insurance restrictions, for denying this request. In such a

case, the dealer may permit you to bring an independent

mechanic to the used car on the lot. A dealer who refuses to

allow any independent inspection may be telling you something

about the condition of the car.

Remember, a good-looking car, or a car that comes with a

warranty, does not necessarily run well. An independent

inspection lets you find out about the mechanical condition of

the vehicle before you buy it. Although an inspection fee by a

mechanic may seem high, when you compare it to the price of the

car, it can be worth the cost.

Vehicle Systems

The Buyers Guide includes a list of the 14 major systems

of an automobile and some of the major problems that may occur

in these systems. You may find this list helpful to evaluate

the mechanical condition of the vehicle. The list also may be

useful when comparing warranties offered on different cars or

by different dealers.

Dealer Identification and Consumer Complaint Information

On the back of the Buyers Guide, you will find the name

and address of the dealership. In the space below that, you

will find the name and telephone number of the person at the

dealership to contact if you have any complaints after the sale.

Spanish Language Sales

If you buy a used car and the sales talk is conducted in

Spanish, you are entitled to see and keep a Spanish-language

version of the Buyers Guide.

If You Buy a Used Car From a Private Party

Many cars are available privately, such as through

classified ads in a newspaper. If you are shopping for a car

from an individual, you should understand several differences

between sales made by individuals and by dealers.

* Private sellers generally are not covered by the Used Car

Rule and therefore, do not have to use the Buyers Guide.

However, you still can follow the Guide's suggestions. For

example, you can refer to the list of potential problems

displayed on the back of the Buyers Guide shown in this

brochure. In addition, ask the seller whether you may have

the vehicle inspected by your own mechanic and whether you

may take it on a test drive.

* Private sales usually are not covered by the "implied

warranties" of state law. So, a private sale probably will

be on an "as is" basis, unless your contract with the

seller specifically provides otherwise. If you have a

written contract, the seller must live up to the promises

stated in the contract.

"An independent inspection lets you find out about the

mechanical condition of the vehicle before you buy it."

Depending on its age, the car also may be covered by a

manufacturer's warranty or a separately purchased service

contract. However, warranties and service contracts may

not be transferable, or there may be limitations or costs

for a transfer. Before you purchase the car, ask the

seller to let you examine any warranty or service contract

on the vehicle.

* Many states require that dealers, but not individuals,

ensure that their vehicles will pass state inspection or

carry a minimum warranty before they offer them for sale.

Ask your state's attorney general's office or a local

consumer protection office about the requirements on

individuals and on dealers in your state.

Before You Buy Any Used Car

If you are interested in a particular car, ask the dealer

or owner if you can take it on a test drive. Try to drive the

car under many different conditions, such as on hills,

highways, and in stop-and-go traffic.

You also may want to ask the dealer or owner whether the

car has ever been in an accident. Find out as much as you can

about the car's prior history and maintenance record. Getting

an independent inspection by an experienced mechanic is a

good idea before purchasing any used car.

Be prepared to negotiate. Many dealers and individuals are

willing to bargain on price and/or on warranty coverage.

If You Have Problems

If something goes wrong with your car and you think that

it is covered by a warranty (either express or implied) or a

service contract, refer to the terms of the warranty or

contract for instructions on how to get service. If a dispute

arises concerning the problem, there are several steps you can take.

Try To Work It Out With The Dealer

First, try to resolve the problem with the salesperson or,

if necessary, speak with the owner of the dealership. Many

problems can be resolved at this level. However, if you believe

that you are entitled to service, but the dealer disagrees, you

can take other steps.

If your warranty is backed by a car manufacturer and you

have a dispute about either service or coverage, contact the

local representative of the manufacturer. This local or "zone"

representative has the authority to adjust and make decisions

about warranty service and repairs to satisfy customers.

Some manufacturers also are willing to repair certain

problems in specific models free of charge, even if the

manufacturer's warranty does not cover the problem. Ask the

manufacturer's zone representative or the service department of

a franchised dealership that sells your car model whether there

is such a policy.

Other Approaches You Can Try

If you cannot get satisfaction from the dealer or from a

manufacturer's zone representative, contact the Better Business

Bureau or a state agency, such as the office of the attorney

general, the department of motor vehicles, or a consumer

protection office. Many states also have county and city

offices that intervene or mediate on behalf of individual

consumers to resolve complaints.

You also might consider using a dispute resolution

organization to arbitrate your disagreement if you and the

dealer are willing. Under the terms of many warranties, this

may be a required first step before you can sue the dealer or

manufacturer. Check your warranty to see if this is the case.

If you bought your car from a franchised dealer, you may be

able to seek mediation through the Automotive Consumer Action

Program (AUTOCAP), a dispute resolution program coordinated

nationally by the National Automobile Dealers Association and

sponsored through state and local dealer associations in many

cities. Check with the dealer association in your area to see

if they operate a mediation program.

If none of these steps is successful, you can consider

going to small claims court, where you can resolve disputes

involving small amounts of money for a low cost, often without

an attorney. The clerk of your local small claims court can

tell you how to file a suit and what the dollar limit is in

your state.

The Magnuson-Moss Warranty Act also may be helpful. Under

this federal law, you can sue based on breach of express

warranties, implied warranties, or a service contract. If

successful, consumers can recover reasonable attorney's fees

and other court costs. A lawyer can advise you if this law

applies to your situation.

For Further Help

If you want additional information about warranties or

service contracts or about new car leasing or buying, send for

these free FTC brochures:

* Warranties

* Service Contracts

* Car Ads: Low-Interest Loans and Other Offers

* New Car Buying Guide

* A Consumer Guide to Vehicle Leasing

Write: Public Reference, Federal Trade Commission,

Washington, DC 20580.

If you have additional questions about the Used Car Rule,

contact the Federal Trade Commission Office nearest you.

Federal Trade Commission Headquarters

6th & Pennsylvania Avenue, N.W.

Washington, DC 20580

(202) 326-2222

TDD: (202) 326-2502

Federal Trade Commission Regional Offices

1718 Peachtree Street, N.W.

Atlanta, Georgia 30367

(404) 347-4836

10 Causeway Street

Boston, Massachusetts 02222

(617) 565-7240

55 East Monroe Street

Chicago, Illinois 60603

(312) 353-4423

668 Euclid Avenue

Cleveland, Ohio 44114

(216) 522-4207

100 N. Central Expressway

Dallas, Texas 75201

(214) 767-5501

1405 Curtis Street

Denver, Colorado 80202

(303) 844-2271

11000 Wilshire Boulevard

Los Angeles, California 90024

(213) 209-7575

150 William Street

New York, New York 10038

(212) 264-1207

901 Market Street

San Francisco, California 94103

(415) 744-7920

915 Second Avenue

Seattle, Washington 98174

(206) 553-4656