Compensation: Chapter 17- Government and Legal Issues in Compensation (Test 1)

Following conditions must be met: Effort, skill, and/or responsibility (ESR) must be substantially greater The task involving added ESR must consume a significant amount of time for all employees whose additional wages are in question The extra ESR must have a value commensurate with the questioned pay differential

How do you support a claim of unequal work?

Demand -Government employs about 16% of U.S. labor workforce -Government purchasing and financial policy decisions Supply -Legislation protecting specific groups -Licensing requirements -Immigration policies

How does government affect the labor market?

Legislation that provides an income floor for workers in society's least productive jobs. States can have their own minimum wage laws (45 and DC do) - higher rate prevails. Direct (pay) and indirect (spillover) effects to workers. Controversy: increasing minimum wage will decrease labor demand.

How is minimum wage with FLSA?

Requires payment of one-and-a-half times standard pay for working more than 40 hours/week. Intended to make hiring more workers less costly than giving more hours to current employees, but certain conditions work against this: Higher skilled workers = higher training costs Higher benefits, fixed per employee

How is overtime and hours worked with FLSA?

Gunther v. County of Washington established that wage discrimination could be brought under Title VII even in situations where jobs were not the same Evidence of Discrimination: -Use of market data (legal standard) -Jobs of comparable worth --Jobs with dissimilar content must be declared of equal value to the employer or "in some sense comparable"

What is pay discrimination and dissimilar jobs?

The degree of accountability required in the performance of a job

What is responsibility?

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

What is skill?

looks at the pay women and minorities receive for jobs they perform -Equal pay for equal work -Controversy: should include comparable worth

What is valuation discrimination?

To qualify for Administrative Exemption, must meet all of the following: 1. Compensated by salary not less than $455 per week 2. Primary duty is office or non-manual work 3. Uses discretion and independent judgement in the job

What qualifies a person for administrative exemption?

To quality for Computer Employee Exemption, must meet all of the following: 1. Compensated at least $455/week salary or $27.63/hour 2. Employed as a skilled worker in the computer field 3. 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 combination of these

What qualifies a person for computer employee exemption?

To qualify for Executive Exemption, must meet all of the following: 1. Compensated by salary not less than $455 per week 2. Primary duty must be managing 3. Directs the work of at least two fulltime employees 4. Must have authority to hire or fire other employees

What qualifies a person for executive exemption?

To qualify for Highly Compensated Employees Exemption, must meet all of the following: 1. Is paid annual total compensation of $100,000 or more, including $455 per week - salary basis 2. Primary duty of performing office, non-manual work. NOTE: no matter how highly paid, manual workers, first responders, or other blue-collar workers are not eligible for exemption. Includes any work involving repetitive operations with their hands, psychical skills, and energy

What qualifies a person for highly compensated employees exemption?

To qualify for Outside Sales Exemption, must meet all of the following: 1. Primary duty is making sales or obtaining orders 2. Customarily engaged away from employer's business

What qualifies a person for outside sales exemption?

To qualify for Professional Exemption, must meet all of the following: 1. Compensated by salary/fee not less than $455 per week 2. Primary duty requires advanced knowledge 3. Knowledge must be in field of science or learning 4. Knowledge gained by specialized instruction For creative professional exemption, must meet #1 above and primary duty is work requiring invention or original talent

What qualifies a person for professional exemption?

Hours worked = hours "on-the-clock" OSHA specifies breaks in an 8-hour workday. Portal-to-Portal Act: time spent on activities before the beginning of 'principle activity' is not compensable. Relevant issues: Time spent traveling to/from work = not compensable Time spent preparing tools = compensable "beeper pay" - if you can use on call time for your own purposes, not compensable

What time is covered with FLSA?

require equal skill, effort, and responsibility performed under similar working conditions

What is equal work?

Option to trade overtime pay for time off. 1 hour of overtime = 1 hour of compensatory time. Provides flexibility to worker and is cheaper for employer.

What is compensatory time off under FLSA?

Mental or physical - the degree of effort (not type of effort) actually expended in the performance of a job

What is effort?

1. Under 18 cannot work hazardous jobs 2. Under 16 cannot work in jobs involving interstate commerce Exceptions exist (e.g., nonhazardous work for a parent or guardian) 3. Unions play large role in publicizing child labor overseas -Child labor is declining, particularly in Latin America

What are child labor laws under FLSA?

Minimum wage Hours of work (including overtime) Child labor Also requires that records be kept of employees, hours worked, and pay.

What are the major provisions of the Fair Labor Standards Act (FLSA)?

The psychical surroundings and hazards of a job, including dimensions such as inside versus outside work, heat, cold, and poor ventilation NOTE: time of day, such as working a night shift, do not equal different working conditions

What are working conditions?

1999 advisory from the Wage and Hour Division said bonus, gain-sharing, and stock option payments should be *included for calculating overtime pay*. However, *extra burden* from bookkeeping resulted in employers not offering these forms of pay to non-exempt employees. Now, stock options and bonuses can be offered because amendment in 2000 said these can be *exempt from inclusion in overtime pay calculations*.

What income is covered under FLSA?

Protects employees age 40 and over against age discrimination

What is Age Discrimination in Employment Act (ADEA) of 1967?

Requires that "essential elements" of a job be called out. If a person with a disability can perform these essential elements, reasonable accommodation must be provided.

What is Americans with Disabilities Act (ADA) of 1990?

practices that have a different effect on members of a protected group intention does not matter (illegal even if unintentional)

What is Disparate (adverse) impact?

intentional unequal treatment resulting from different standards or policies for different groups

What is Disparate (adverse) treatment?

Employers can be liable for current pay difference that are a result of discrimination (as defined under existing laws such as Title VII) that occurred many years earlier

What is Lilly Ledbetter Fair Pay Act of 2009?

Prohibits discrimination on the basis of sex, race, color, religion, or national origin in any employment conditions, including: Hiring Firing Promotion Transfer Compensation Admission to training programs

What is Title VII of the Civil Rights Act of 1964?

the denial of particular jobs, promotions or training opportunities to qualified women and minorities

What is access discrimination?

can be legal if based on -Seniority -Merit or quality of performance -Quality or quantity of production -Some factor other than sex

What is affirmative defense?