Employment Law

The term employment law covers an expansive list of federal and state statutes, regulations, and case law, spanning several areas of law intrinsically connected to employment issues, including laws related to contracts, collective bargaining, workplace discrimination, workplace safety, workers compensation, unemployment compensation, and pension laws.

Employment Agreements

The laws of contracts affect the formation, interpretation, and enforcement of employment agreements, which regulate the rights and responsibilities of both the employer and the employee, and deal with terms and conditions of employment.

• Express terms include duties, compensation, benefits, termination, severance pay, employee manuals, handbooks, grievance procedures, whether employment is for a term or is at-will, and a variety of other conditions of employment.
• Every employment agreement is presumed to operate in accordance with existing laws affecting the rights of the employee and the employer, which become implied terms in the agreement.
• Claims for breach are almost always appended to private suits filed for wrongful termination, violation of civil rights, age discrimination, or disability discrimination, among others.

Collective Bargaining

The National Labor Relations Act of 1935 (NLRA) governs collective bargaining by employees. Collective bargaining gives employees, usually represented by a labor union, greater leverage in negotiation with an employer. A collective bargaining agreement usually results:

• Covers rights and responsibilities, including wages, hours, benefits, and other terms of employment.
• Often includes provision for arbitration as the recourse for grievances, rather than litigation.
• The NLRA requires good faith bargaining between employers and a union’s selected representative(s).

Wages and Hours

The federal Fair Labor Standards Act of 1938 (FLSA), originally part of President Roosevelt’s “New Deal” program, imposes nationwide standards for minimum wage, overtime pay, recordkeeping, and child labor laws.

• Covers both private-sector employees and employees of federal, state, and local governments who are not exempt.
• Sets federal minimum wage at $7.25/hour, effective July 24, 2009, and overtime pay at 1-1/2 times the regular hourly rate, for all hours worked over 40 hours per workweek.
• Employers are required to maintain employee time and pay records, and they must display an official poster stating the provisions of the FLSA.
• Youth employment provisions ensure that work is safe and does not jeopardize a child’s health, education, or other well-being.

Some states still have their own minimum-wage laws and child labor laws. In the case of conflicts between state and federal provisions, the higher wage law or the law that provides greater protection to the working child controls.

Workplace Safety

The Occupational Safety and Health Act (OSHA) is the main federal statute regulating workplace safety. Employers must provide a place of employment free from recognized hazards causing or likely to cause death or serious physical harm to employees. Both employers and employees must follow all OHSA safety regulations.

• Gives employees the right to request inspections and file administrative lawsuits over violations that create unsafe conditions. Retaliation by an employer is forbidden.
• All violations are punishable by fines and injunctions.
• States may have their own safety standards, with approval from the secretary of Labor, but must provide at least as much protection, if not more.

Anti-Discrimination Laws

Several federal laws have been enacted to curtail discrimination in the workplace based on race, sex, color, religion, national origin, age, disability, or need for medical leave. They include:

• Title VII of the Civil Rights Act of 1964, which prohibits discrimination in hiring, employing, and firing on the basis of membership in certain suspect classes; namely, race, color, sex, religious beliefs, or national origin.
  • Also prohibited from retaliating against workers for reporting acts that violate Title VII
  • Employer must employ 15 or more people.
• The Age Discrimination in Employment Act (ADEA), which prohibits discrimination on the basis of age.
  • If employee is over age 40, discrimination is presumed.
  • Employer must employ 20 or more people.
• The Americans with Disabilities Act, which prohibits discrimination solely on the basis of disability.
  • Employer must make reasonable accommodations for qualified disabled person unless this would pose undue hardship on the employer.
  • Employer must employ 15 or more people.
• Workers must file a complaint with the Equal Employment Opportunity Commission (EEOC) and receive that agency’s determination, prior to filing in court.

In addition, many states have enacted their own civil rights and anti-discrimination statutes. Some states apply their laws to employers with as few as one employee. Generally, state statutes track the language used in the federal statutes, and borrow from federal court interpretations of those statutes. Some states interpret their own laws to provide employees even greater protection than what is available under federal law.

Family and Medical Leave

The federal Family and Medical Leave Act of 1993 (FMLA), protects employee’s jobs while requiring employers to give qualified employees the opportunity to take up to 12 weeks per year of unpaid leave for specified family and medical needs, including:

• Birth, care of a newborn, or care of a newly adopted or foster-care minor child;
• Care of a seriously ill parent, spouse, or adult child who is mentally or physically disabled from self-care under the Americans with Disabilities Act (ADA);
• Your own serious health condition (requiring hospitalization or continuing treatment by a health care provider) that keeps you from working (but an employer may offer you lighter duty or a reasonable accommodation, to help you work);
• Care of certain members of the military with serious injury or illness;

Two newer benefits relating to active duty military service, added with the 2008 amendments to FMLA, were effective as of January 1, 2009, giving eligible employees:

• 12 weeks of leave for any “qualifying exigency” resulting from active duty or notification to active duty of the employee’s parent, spouse, or child, which includes:
  • Receipt of notice to deploy within seven (7) days.
  • Urgent school-related and child care issues.
  • Visiting a service member while on leave from active duty.
• 26 weeks of leave to care for a covered military servicemember with a serious injury or illness.
• Applies to all government workers, as well as workers for private employers who have fifty (50) or more employees, but it makes no provision for small businesses with fewer employees.
• Qualified employees are those who have worked 1250 hours for the employer within the last 12 months, an average of 24 hours/week, so the law may not apply to many part-time workers.

Workers Compensation

Workers compensation laws consist of state statutes enacted to ensure that every employee who receives an injury or is killed in the course and scope of his employment receives some benefits for medical expense, lost wages, and disability, paid relatively quickly. Benefits for death are payable to the workers’ dependents.

• The employer has strict liability for injuries; the employee need not prove any negligence on the part of the employer, only that the injury was sustained in the course and scope of employment.
• Voluntary intoxication of the employee when the injury occurred may cause him to lose benefits.
• Workers’ compensation is usually the employee’s exclusive remedy – by accepting it, the employee gives up his right to sue an employer in a regular court for damages like pain & suffering, loss of consortium (loss of the workers’ services as a spouse), or punitive damages.
• Many states allow the employee to sue where the employer was guilty of gross or willful negligence or intentionally harmed the employee.

Unemployment Compensation

Unemployment compensation is a program originally created by the federal Social Security Act of 1935, for the purpose of temporarily providing partial replacement of wages for the compensation of workers who have been laid off or who have become unemployed through no fault of their own, and to aid the economy during recessions. The federal government supervises while each state is allowed to direct its own program.

• Eligibility usually requires that an employee have worked steadily for a period of time and have earned an amount of wages set by statute.
• Benefits are paid out periodically like wages, in an amount equal to a set percentage of the employee’s normal earnings, and are treated like wages for tax purposes (taxed as gross income to the employee in the year it is received).
• While receiving benefits, an employee must be able and available to work. An employee must also actively seek work, usually by visiting an unemployment office and completing a number of job applications periodically. An employee must have good cause to refuse an offer of suitable work.
  • Employees are usually not eligible for benefits if they are:
  • Terminated for cause
  • Quit their job without good cause
  • Refuse suitable offers without good cause
  • Are not able or available to work
  • Are unemployed due to a labor dispute.
  • Self-employed workers, domestic and agricultural workers, and others not classified as employees by statute are ineligible.

If an unemployed worker’s initial claim is denied, he may file an appeal, which is heard by an administrative law judge, or the statutory equivalent. Court review is available for the ALJ’s findings, but a court will not generally disturb an agency determination based on substantial evidence.

The system was created by federal statute, but states administer it through their own programs. It is financed by taxes on employers. Participation by the employer is mandatory.

Pensions

The federal Employee Retirement Income Security Act (ERISA) is the main law regulating pensions, particularly defined benefit plans, where the employer and employee make regular contributions to a fund, held in trust by the employer, with no guaranteed amount at retirement. ERISA was a response to employers mishandling the funds held in trust. Employers get tax benefits for adhering to ERISA’s requirements.

• Employer plans are covered if they provide retirement income to employees or result in a deferral of income by employees until after termination of covered employment.
• Imposes fiduciary duties on employers when handling plan assets.
• Employee is entitled to obtain a copy of and information about the plan.
• Employer must establish written policies for filing claims and appeals.
• Employer can get exemption if alternative plan benefits workers.