ch 17 compensation gov and legal issues

Pay discrim

access discrim and valuation discrim

SEC Rule change on exec disclosure

adopts enhanced exec compensation disclosure reqs

noncompete agreements

agree not to work for competitor

companies respond by

altering their practices, defending their practices before the courts, or lobbying for legislative change.

demand

Federal government employs 2.73 million. State and local many times that. Overall, government employs 17% of U.S. labor force. Indirectly affects labor demand through purchases(military aircraft computer systems paper clips) and policy decisions (lowering interest rates)

EO 11246

Prohibits discrimination on the basis of race, color, religion, sex, or national origin. Requires government contractors to file affirmative action plans, with three parts. Utilization analysis compares contractor's workforce to external workforce. Goals and timetables to achieve affirmative action. Action steps for achieving goals and timetables. As of 2016, OFCCP collects pay information on every employee of a federal contractor

Min Wage

Provides an income floor for workers in society's least productive jobs. Higher rate prevails if state and federal laws cover the same jobs. Changes in minimum wage directly effects workers and indirectly raises everyone's base pay, the spillover effect.(in order to maintain differentials) Employers must comply if the wage is raised, experts fear this will decrease labor demand.

gov and legal issues in comp

The end of paying different wages based on general sociological factors was the aim of the civil rights movement and further legislation. Compliance and fairness are continuing compensation objectives. The legislative process begins when a problem is identified and corrective legislation is proposed, then passed into law.

child labor

Under 18 cannot work hazardous jobs. Under 16 cannot work in jobs involving interstate commerce, except for a parent. *Additional exceptions and limitations exist. Unions publicize child labor overseas. Child labor is declining, particularly in Latin America Still prominent in sub Saharan africa.

FMLA

12 weeks of unpaid leave for family/medical leave

skill

Experience, training, education, and ability as measured by job performance requirements

overtime and hours of work

FLSA requires one-and-a-half times standard pay for more than 40 hours/week. Objective - make hiring additional workers less costly than scheduling overtime. today it is cheaper to pay overtime due to high costs of ee benefits. hiring more ee means more long term benefits rather than just paying overtime

govs usual interests

in compensation decisions are whther procedures for determining pay are fair, safety nets for the unemployed and disadvantaged are sufficient and ee are protected from exploitation

Civil Rights Act of 1991

increases burden of proof on er ; covers intl

dodd frank

increases sex req on stock and exec compensation

davis bacon

laborers on public construction must be paid prevailing wage

Valuation discrim

looks at the pay women and minorities receive for the jobs they perform. Hinges on equal pay for equal work. Many believe valuation discrimination does not go far enough and can occur when men and women hold entirely different jobs, with the same comparable worth. Hinges on equal pay for COMPARABLE worth. Also called pay equity or gender pay equity. Not supported by federal law but several state laws require a comparable worth standard.

Mental Health act

mental illness covered same as other medical conditions

ADA

must accomodate a person able to fulfill essential elements of a job

overtime and hours worked

osha portal to portal act worker economic opportunity act

Workers economic opportunity act

overtime pay does not have to include stock plan income

Pregnancy disab act

pregnancy must be covered as medical condition

title VII

prohibits discrim on basis of race sex color religion or national origin

ADEA

prohibits ee 40+ from age discrim

exec order 11246

prohibits federal contractors from discrim basis of race sex color religion or national origin

laws are enforced by agencies through

rulings, regulations, inspections, and investigations.

FLSA

sets min wage, hours worked, overtime prohibits child labor

osha

specifies breaks in an 8-hour workday.

outside sales exemption

ee must meet primary duty is making sales or obtaining orders customarily engaged away from the er business

sec

exec compensation rules

SOX

executives cannot retain bonuses or stock if they mislead the public

Equal Pay act

equal pay for men and women doing substantially similar work

Lilly Ledbetter Fair Pay act

er liable for pay loss resulting from discrim

Worker economic opportunity act

exempts stock options and bonuses from overtime pay calculations.

Walsh Healy Public Contracts act

extends prevailing wage to suppliers of government contract

TARP

financial institutions receiving tarp funds must meet all restrictions on compensation, prohibits several pay programs

Equal pay act-FLSA

forbids wage discrimination on the basis of gender if performing equal work in the same firm. Jobs are considered equal if requiring equal skill, effort, and responsibility, performed under the same conditions . Pay difference are legal if affirmative defense: Seniority, merit or quality of performance, quality or quantity of production, or SOME FACTOR OTHER THAN SEX 58% of all working women are not in jobs substantially equal to jobs of men, so they are not covered by equal pay act. Title VII extends protections for them.

pay gap

gender gap has decreased it still persists. hispanics are consistently at the bottom for both men and women asian women earn more than white women the gap bw black and white women is less than black and white men

other exemption information

highly compensated ee who earn $100,000/year are exempt blue collar workers and first responders are not exempt must comply with state laws if they are more strict than federal law

access discrim

is the denial of particular jobs, promotions or training opportunities to qualified women or minorities. most commonly heard about discrim and reverse discrim

Government as Part of the Employment Relationship

labor demand and supply gov decisions affect conditions in the labor market

gov prevailing wage law

min wage that must be paid for work done on gov projects or purchases as a practical matter the "Union Rate" for labor becomes the going rate main laws = Davis bacon act, Walsh-Healy Public contracts Act, service contract act, and the national foundation of arts and humanities

factors other than sex

shift differentials, temporary assignments, bonafide training programs, differences based on ability training or experience and other reasons of business necessity

irs

tax and rules for exec pay

why gap exists

work occupation differences work related behavior labor market conditions firm/industry differences union differences discrimination

portal to portal

time spent on activities before beginning the 'principle activity' is not compensable og issue=miners driving to site

arbitration

to resolve indiv disputes

Exemptions

wage and hour division of the dept of labor which is charged with enforcement of FLSA provides strict criteria that must be met in order for jobs to be exempt from min wage and overtime provisions. not the job title but the actual nature of the work that matters

Compliance a proactive Approach

A proactive compensation manager can: Join professional associations to stay informed on emerging issues, and to act in concert to inform and influence public and legislative opinion. Constantly review compensation practices and their results. Should consult with legal counsel. Fair treatment of all employees is the goal of a good pay system, and legislation.

supply

Affects labor supply through legislation. Licensing requirements restricts labor supply. Immigration policy also restricts labor supply. Early legislation was basic protection, shifting to equality in the 1960's

state and local laws affect regulations

Cover employers exempt from federal laws, or include requirements that go beyond federal law

ee or independent contractor

Employers must pay Social Security, unemployment and workers compensation taxes on wages and salaries. Unless the worker is an independent contractor. How to classify? Tax law and ERISA are relevant. Two general criteria How much control the firm exercises. The type and permanence of the relationship.

effort

Mental or physical, the degree of effort actually performed on the job

living wage

Minimum wage tailored to living costs at local levels. Sometimes the laws only cover a city. Sometimes a state, such as Maryland. Popular, backed by unions and churches . Speculated objective is to reduce cost savings from outsourcing.-->More government jobs, and union members.

definition of equal

The Supreme Court ruled that jobs be substantially equal, not identical. When job descriptions differed from actual employee duties, the courts held that the ACTUAL WORK PERFORMED must be used to decide whether jobs are substantially equal

Responsibility

The degree of accountability required in the job performance

For an employer to support a claim of unequal work, the following must be met

The effort/skill/responsibility must be substantially greater in one of the jobs. Tasks with the extra effort/skill/responsibility must consume a significant amount of time for all employees' whose additional wages are in question. Extra effort/skill/responsibility must have a value commensurate with the pay differential

3 branches of us federal gov

The legislative branch - Congress. The executive branch - President. The judicial branch - the courts.

Working condition

The physical surroundings and hazards of a job; inside/outside, heat/cold, and poor ventilation Time of day, such as working a night shift, do not equal different working conditions.

title VII

Title VII prohibits discrimination. ADEA and ADA also prohibit discrimination based on age and disability, respectively. The Lilly Ledbetter Fair Pay Act increases compliance challenges for ers. The statue of limitations for filing a claim of discrim within 180 days of the date of alleged discrim employment prac Two theories of discrimination behavior: Disparate treatment. Disparate impact.

Creative professional exemption

compensated on salary/fee of not less than $455/wk primary duty is work req invention or original talent

FLSA in detail

covers all ee of companies engaged in interstate commerce or in the production of goods for interstate commerce major provisions include min wage, hours of work, and child labor records must be kept of ee their hours worked and their pay

Sec exchange act

created the SEC

federal pay regulation

davis bacon act Sec exchange act walsh healey public contracts act Fair LaborStandards Act equal pay act title VII EO 11246 ADEA Pregnancy DA ADA Civil right 1991 FMLA Mental health act worker economic opportunity act SOX FASB SEC rule change Lilly Ledbetter Fair Pay Act TARP

EO 13665

directs regulators to develop financial industry specific rules

computer ee exemption

ee must meet compensated either $455/wk or $27.63/hr employed as a skilled worker in the computer field primary duty must consist of: application of systems analysis techniques/procedures design development testing etc of systems/programs design testing etc of machine operating system programs a combo of these

Executive exemption

ee must meet all of the following: compensated by salary not less than $455/wk primary duty must be managing directs the work of at least two full time ee must have authority to hire or fire other ee

Admin exemption

ee must meet the following compensated by salary not less than 455/wk ***now in 2016 $913/wk primary duty is office or non manual work uses discretion and independent judgment in the job

Professional exemption

ee must meet the following compensated on salary/fee of not less than $455/wk primary duty is work req advanced knowledge knowledge must be in a field of science or learning knowledge gained by specialized instruction

FASB

ee stock options must be expensed on financial statements rules governing exec and ee compensation

federal trade comission

enforces antitrust laws