Chapter 10 (Federal Employment & Labor Laws)

What is the purpose and function of Social Security and Medicare?

The Social Security Act provides for old-age (retirement), survivors', and disability insurance. The act is therefore often referred to as OASDI. Both employers and employees must "contribute" under the Federal Insurance Contributions Act (FICA) to help pay for benefits that will partially make up for the employees' loss of income on retirement. Retired workers are eligible to receive monthly payments from the Social Security Administration, which administers the Social Security Act. Social Security benefits are fixed by statute but increase automatically with increases in the cost of living. Medicare is a federal government health-insurance program administered by the Social Security Administration for people sixty-five years of age and older and for some under age sixty-five who are disabled. Medicare now offers additional coverage options and a prescription-drug plan. People who have Medicare hospital insurance can obtain additional federal medical insurance if they pay small monthly premiums. Like Social Security, Medicare is funded by "contributions" from the employer and the employee, but there is no cap on the amount of wages subject to the Medicare tax. In 2013, both the employer and the employee were required to pay 1.45 percent of all wages and salaries to finance Medicare.

Define the term "collective bargaining"

The process by which labor and management negotiate the terms and conditions of employment, including working hours and workplace conditions.

What are some exceptions to the employment at will doctrine?

(Exception Based on Contract Theory) some courts have held that an implied employment contract exists between the employer and the employee If the employee is fired outside the terms of the implied contract, he or she may succeed in an action for breach of contract even though no written employment contract exists. Generally, the key consideration in determining whether an employment manual creates an implied contractual obligation is the employee's reasonable expectations. (Exceptions Based on Tort Theory) In some situations, the discharge of an employee may give rise to an action for wrongful discharge under tort theories. Abusive discharge procedures may result in a lawsuit for intentional infliction of emotional distress or defamation. In addition, some courts have permitted workers to sue under the tort theory of fraud when an employer made false promises to a prospective employee. (Exceptions Based on Public Policy) The most common exception to the employment-at-will doctrine is made on the basis that the employer's reason for firing the employee violates a fundamental public policy of the jurisdiction. Generally, the courts require that the public policy involved be expressed clearly in the statutory law governing the jurisdiction. The public-policy exception may apply to an employee who is discharged for whistleblowing—that is, telling government authorities, upper-level managers, or the media that her or his employer is engaged in some unsafe or illegal activity.

Describe "Employment at Will"

A common law doctrine under which either party may terminate an employment relationship at any time for any reason, unless a contract specifies otherwise.

Define and describe the Occupational Safety and Health Act (OSHA)

At the federal level, the primary legislation protecting employees' health and safety is the Occupational Safety and Health Act, which is administered by the Occupational Safety and Health Administration (OSHA). The act imposes on employers a general duty to keep the workplace safe. To this end, OSHA has established specific safety standards that employers must follow depending on the industry. For instance, OSHA regulations require the use of safety guards on certain mechanical equipment and set maximum levels of exposure to substances in the workplace that may be harmful to a worker's health. The act requires that employers post certain notices in the workplace, maintain specific records, and submit reports. Employers with eleven or more employees are required to keep occupational injury and illness records for each employee. OSHA compliance officers may enter and inspect the facilities of any establishment covered by the Occupational Safety and Health Act. Employees may also file complaints of violations. Under the act, an employer cannot discharge an employee who files a complaint or who, in good faith, refuses to work in a high-risk area if bodily harm or death might result.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Federal law also enables employees to continue health-care coverage after their jobs have been terminated and they are no longer eligible for group health-insurance plans. The Consolidated Omnibus Budget Reconciliation Act (COBRA) prohibits an employer from eliminating a worker's medical, vision, or dental insurance on the voluntary or involuntary termination of the worker's employment. A worker has sixty days (from the date that the group coverage would stop) to decide whether to continue with the employer's group insurance plan. If the worker chooses to discontinue the coverage, the employer has no further obligation. If the worker chooses to continue coverage, the employer is obligated to keep the policy active for up to eighteen months (twenty-nine months if the worker is disabled). The coverage must be the same as that provided to the worker prior to the termination or reduction of work. If family members were originally included, COBRA prohibits their exclusion. Generally, an employer can require the employee to pay all of the premiums, plus a 2 percent administrative charge. If the worker fails to pay the premiums, becomes eligible for Medicare, or obtains coverage under another plan (or if the employer completely eliminates its group plan), the employer is relieved of further responsibility.

Describe the types of employee privacy acts

Employees of private (nongovernment) employers have some privacy protection under tort law and state constitutions. The Electronic Communications Privacy Act prohibits employers from intercepting an employee's personal electronic communications unless they are made on devices and systems furnished by the employer. When determining whether an employer should be held liable for violating an employee's privacy rights, the courts generally weigh the employer's interests against the employee's reasonable expectation of privacy. Normally, if employees have been informed that their communications are being monitored, they cannot reasonably expect those interactions to be private. Also, if the employer provided the e-mail system or blog that the employee used for communications, a court will typically hold that the employee did not have a reasonable expectation of privacy. Today, the Employee Polygraph Protection Act generally prohibits employers from requiring employees or job applicants to take lie-detector tests or suggesting or requesting that they do so. The Fourth Amendment does not apply to drug testing conducted by private employers. Hence, the privacy rights and drug testing of private-sector employees are governed by state law, which varies from state to state. Many states have statutes that allow drug testing by private employers but put restrictions on when and how the testing may be performed.

Describe Fair Labor Standards Act (FLSA) as it pertains to child labor, minimum wages, and overtime.

Child Labor The FLSA prohibits oppressive child labor. Children under fourteen years of age are allowed to do only certain types of work, such as deliver newspapers, work for their parents, and be employed in entertainment and (with some exceptions) agriculture. Children aged fourteen and fifteen are allowed to work, but not in hazardous occupations. There are also numerous restrictions on how many hours per day and per week children can work. Minimum Wages The FLSA provides that a minimum wage of $7.25 per hour must be paid to employees in covered industries. Congress periodically revises this minimum wage. Additionally, many states have minimum wages. When the state minimum wage is greater than the federal minimum wage, the employee is entitled to the higher wage. When an employee receives tips while on the job, the employer is required to pay only $2.13 an hour in direct wages—if that amount, plus the tips received, equals at least the federal minimum wage. If an employee's tips and direct wages do not equal the federal minimum wage, the employer must make up the difference. Overtime Under the FLSA, any employee who works more than forty hours per week must be paid no less than 1.5 times her or his regular pay for all hours over forty. The FLSA overtime provisions apply only after an employee has worked more than forty hours per week, so employees who work ten hours a day, four days per week, are not entitled to overtime pay.

Describe the Norris-LaGuardia Act

Congress protected peaceful strikes, picketing, and boycotts in 1932 in the Norris-LaGuardia Act. The statute restricted the power of federal courts to issue injunctions against unions engaged in peaceful strikes. In effect, this act declared a national policy permitting employees to organize.

Under what conditions can/can't a union strike?

In the following situations, the conduct of the strikers may cause the strikes to be illegal: 1) Violent strikes. The use of violence (including the threat of violence) against management employees or substitute workers is illegal. 2) Massed picketing. If the strikers form a barrier and deny management or other nonunion workers access to the plant, the strike is illegal. 3) Sit-down strikes. Strikes in which employees simply stay in the plant without working are illegal. 4) No-strike clause. A strike may be illegal if it contravenes a no-strike clause that was in the previous collective bargaining agreement between the employer and the union. 5) Secondary boycotts. A secondary boycott is an illegal strike that is directed against someone other than the strikers' employer, such as the companies that sell materials to the employer. 6) Wildcat strikes. A wildcat strike occurs when a small number of workers, perhaps dissatisfied with a union's representation, call their own strike. The union is the exclusive bargaining representative of a group of workers, and only the union can call a strike. Therefore, a wildcat strike, unauthorized by the certified union, is illegal.

Define the term "lockout"

Occurs when an employer shuts down to prevent employees from working typically because it cannot reach a collective bargaining agreement with the union.

Describe the National Labor Relations Act

One of the foremost statutes regulating labor is the National Labor Relations Act (NLRA) of 1935. This act established the rights of employees to engage in collective bargaining and to strike. The act also specifically defined a number of employer practices as unfair to labor: 1) Interference with the efforts of employees to form, join, or assist labor organizations or to engage in concerted activities for their mutual aid or protection. 2) An employer's domination of a labor organization or contribution of financial or other support to it. 3) Discrimination in the hiring of or the awarding of tenure to employees for reason of union affiliation. 4) Discrimination against employees for filing charges under the act or giving testimony under the act. 5) Refusal to bargain collectively with the duly designated representative of the employees.

What is the purpose of State Worker's Compensation laws?

State workers' compensation laws establish an administrative procedure for compensating workers injured on the job. Instead of suing, an injured worker files a claim with the state agency or board that administers local workers' compensation claims. In general, the only requirements to recover benefits under state workers' compensation laws are: 1) The existence of an employment relationship and 2) An accidental injury that occurred on the job or in the course of employment, regardless of fault. If an employee accepts workers' compensation benefits, he or she may not sue for injuries caused by the employer's negligence. By barring lawsuits for negligence, workers' compensation laws also prevent employers from avoiding liability by using defenses, such as contributory negligence or assumption of risk. A worker may sue an employer who intentionally injures the worker, however.

Describe the Family and Medical Leave Act

The FMLA requires employers that have fifty or more employees to provide an employee with up to twelve weeks of unpaid family or medical leave during any twelve-month period. The FMLA expressly covers private and public (government) employees who have worked for their employers for at least a year. An eligible employee may take up to twelve weeks of leave within a twelve-month period for any of the following reasons: 1)To care for a newborn baby within one year of birth 2) To are for an adopted or foster child within one year of the time the child is placed with the employee 3) To care for the employee's spouse, child, or parent who has a serious health condition 4) If the employee suffers from a serious health condition and is unable to perform the essential functions of her or his job and 5) For any qualifying exigency (nonmedical emergency) arising out of the fact that the employee's spouse, son, daughter, or parent is a covered military member on active duty.

Define and describe HIPAA

The Health Insurance Portability and Accountability Act (HIPAA) also affects employer-sponsored group health plans. HIPAA does not require employers to provide health insurance, but it does establish requirements for those that do. Under HIPAA, employers must give credit to employees for previous health coverage (including COBRA coverage) to decrease any waiting period before their coverage becomes effective. In addition, HIPAA restricts the manner in which employers collect, use, and disclose the health information of employees and their families. Employers must train employees, designate privacy officials, and distribute privacy notices to ensure that employees' health information is not disclosed to unauthorized parties.

What is the purpose of ICRA?

The IRCA makes it illegal to hire, recruit, or refer for a fee someone not authorized to work in this country. Through Immigration and Customs Enforcement officers, the federal government conducts random compliance audits and engages in enforcement actions against employers who hire undocumented workers.

Explain the purpose of the Immigration Act

The Immigration Act of 1990 placed caps on the number of visas (entry permits) that can be issued to immigrants each year. Most temporary visas are set aside for workers who can be characterized as "persons of extraordinary ability," members of the professions holding advanced degrees, or other skilled workers and professionals.

Describe the Labor Management Relations Act

The Labor-Management Relations Act (LMRA or Taft-Hartley Act) of 1947 was passed to proscribe certain unfair union practices, such as the closed shop. A closed shop is a firm that requires union membership as a condition of employment. Although the act made the closed shop illegal, it preserved the legality of the union shop. A union shop is a firm that does not require union membership as a prerequisite for employment but can, and usually does, require that workers join the union after a specified amount of time on the job.The LMRA also prohibited unions from refusing to bargain with employers, engaging in certain types of picketing, and featherbedding (causing employers to hire more employees than necessary). In addition, the act allowed individual states to pass their own right-to-work laws—laws making it illegal for union membership to be required for continuedemployment in any establishment. Thus, union shops are technically illegal in the twenty-four states that have right-to-work laws.

Explain how unions can be organized

Typically, the first step in organizing a union at a particular firm is to have the workers sign authorization cards. An authorization card usually states that the worker desires to have a certain union, such as the United Auto Workers, represent the workforce. If a majority of the workers sign authorization cards, the union organizers (unionizers) present the cards to the employer and ask for formal recognition of the union. If the employer refuses to voluntarily recognize the union after a majority of the workers sign authorization cards, the union organizers present the cards to the NLRB with a petition for an election. If less than 50 percent of the workers sign the cards, the unionizers may still petition for an election. For an election to be held, they must demonstrate that at least 30 percent of the workers to be represented support a union or an election on unionization. The proposed union must represent an appropriate bargaining unit. Not every group of workers can form a single union. One key requirement to being an appropriate bargaining unit is a mutuality of interest among all the workers to be represented by the union. Factors considered in determining whether there is a mutuality of interest include the similarity of the jobs of all the workers to be unionized and their physical location. If all of these requirements are met, an election is held. The NLRB supervises the election and ensures secret voting and voter eligibility. If the proposed union receives majority support in a fair election, the NLRB certifies the union as the bargaining representative for the employees.

Explain the purpose of the Affordable Care Act, and when it applies to businesses.

Under the Affordable Care Act (ACA, commonly referred to as Obamacare), most employers with fifty or more full-time employees are required to offer health-insurance benefits. Any business offering health benefits to its employees (even if not legally required to do so) may be eligible for tax credits of up to 35 percent to offset the costs. An employer who fails to provide health benefits as required under the statute can be fined up to $2,000 for each employee after the first thirty people. (This is known as the 50/30 rule: employers with fifty employees must provide insurance, and those failing to do so will be fined for each employee after the first thirty.) An employer who offers a plan that costs an employee more than 9.5 percent of the employee's income may receive a penalty of $3,000. Employers will be fined for failing to provide benefits only if one of their employees receives a federal subsidy to buy health insurance through a state health-insurance exchange. The act established state exchanges to provide a marketplace for business owners and individuals to compare premiums and purchase policies.

Walsh-Healey Act

applies to U.S. government contracts. It requires that a minimum wage, as well as overtime pay at 1.5 times regular pay rates, be paid to employees of manufacturers or suppliers entering into contracts with agencies of the federal government.

Explain the purpose of the Worker Adjustment and Retraining Notification (WARN) Act

applies to employers with at least one hundred full-time employees. It requires an employer to provide sixty days' notice before implementing a mass layoff or closing a plant that employs more than fifty full-time workers. A mass layoff is a layoff of at least one-third of the full-time employees at a particular job site.

Davis-Bacon Act

requires contractors and subcontractors working on federal government construction projects to pay "prevailing wages" to their employees