Copyright © 2004 by Prentice-Hall. All rights reserved. PowerPoint Slides to Accompany BUSINESS LAW E-Commerce and Digital Law International Law and Ethics 5 th Edition by Henry R. Cheeseman Slides developed by Les Wiletzky Wiletzky and Associates, Puyallup, WA Chapter 40 Employment and Worker Protection Laws Chapter 40 Employment and Worker Protection Laws

40 - 2Copyright © 2004 by Prentice-Hall. All rights reserved. Employment at Will  At-will employees – employees who do not have employment contracts.  Wrongful discharge – the discharge of an employee in violation of a statute, an employment contract, or public policy, or tortiously. The employee can recover damages and other remedies. The employee can recover damages and other remedies.

40 - 3Copyright © 2004 by Prentice-Hall. All rights reserved. Employment at Will (continued) Statutory Exceptions Contract Exceptions Public Policy Exception Tort Exceptions

40 - 4Copyright © 2004 by Prentice-Hall. All rights reserved. Drug Testing of Employees  Generally, pre-employment drug screening has been upheld by the courts.  Drug testing of incumbent employees by private employers is usually upheld where: The employer has a reasonable suspicion that an employee is impaired, or The employer has a reasonable suspicion that an employee is impaired, or Drug testing is required after an accident has occurred. Drug testing is required after an accident has occurred.

40 - 5Copyright © 2004 by Prentice-Hall. All rights reserved. Workers’ Compensation Acts Acts that compensate workers and their families if workers are injured in connection with their jobs.

40 - 6Copyright © 2004 by Prentice-Hall. All rights reserved. Workers’ Compensation Acts (continued)  Depending on the state, employers are required either: To pay for workers’ compensation insurance, or To pay for workers’ compensation insurance, or To self-insure by making payments into a contingency fund. To self-insure by making payments into a contingency fund.  Workers’ compensation benefits vary by state and are paid according to preset limits established by statute or regulation.

40 - 7Copyright © 2004 by Prentice-Hall. All rights reserved. Workers’ Compensation Acts (continued)  Employment-Related Injury To recover under workers’ compensation, the worker’s injuries must have been employment-related. To recover under workers’ compensation, the worker’s injuries must have been employment-related. Many workers’ compensation acts include stress as a compensable work-related injury. Many workers’ compensation acts include stress as a compensable work-related injury.

40 - 8Copyright © 2004 by Prentice-Hall. All rights reserved. Workers’ Compensation Acts (continued)  Exclusive Remedy Workers’ compensation is an exclusive remedy. Workers’ compensation is an exclusive remedy. Workers cannot sue their employers in court for damages. Workers cannot sue their employers in court for damages. An exception occurs when an employer intentionally injures an employee. An exception occurs when an employer intentionally injures an employee.

40 - 9Copyright © 2004 by Prentice-Hall. All rights reserved. Employee Polygraph Protection Act of 1988  Prohibits most private employers from using polygraph tests.  Federal and state governments are exempt.  Requires private employers that are permitted to use polygraph testing to follow certain procedures.

Copyright © 2004 by Prentice-Hall. All rights reserved. Occupational Safety and Health Act (1970)  Enacted to promote safety in the workplace.  Established the Occupational Safety and Health Administration (OSHA).  Generally, all private employers are within the scope of the act.  Federal, state, and local governments are exempt.

Copyright © 2004 by Prentice-Hall. All rights reserved. Occupational Safety and Health Act (continued)  The act imposes record keeping and reporting requirements on employers.  Employers are required to post notices in the workplace informing employees of their rights under this act.  OSHA is empowered to administer the act and adopt rules and regulations to interpret and enforce it.

Copyright © 2004 by Prentice-Hall. All rights reserved. Occupational Safety and Health Act (continued)  OSHA is empowered to inspect places of employment for health hazards and safety violations.  If a violation is found, OSHA can issue a written citation. Requires the employer to abate or correct the situation. Requires the employer to abate or correct the situation.

Copyright © 2004 by Prentice-Hall. All rights reserved. Types of OSHA Standards Specific Duty Standard  Addresses a safety problem of a specific duty nature. e.g., requirement for a safety guard on a particular type of equipment e.g., requirement for a safety guard on a particular type of equipment Specific Duty Standard  Addresses a safety problem of a specific duty nature. e.g., requirement for a safety guard on a particular type of equipment e.g., requirement for a safety guard on a particular type of equipment General Duty Standard  A duty that an employer has to provide a work environment “free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.” General Duty Standard  A duty that an employer has to provide a work environment “free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.”

Copyright © 2004 by Prentice-Hall. All rights reserved. Fair Labor Standards Act (FLSA) of 1938 (and subsequent amendments)  Federal act enacted to protect workers. Prohibits child labor Prohibits child labor Establishes minimum wage requirements Establishes minimum wage requirements Establishes overtime pay requirements Establishes overtime pay requirements

Copyright © 2004 by Prentice-Hall. All rights reserved. FLSA: Child Labor  The FLSA forbids the use of oppressive child labor.  It is unlawful to ship goods produced by businesses that use oppressive child labor.  The Department of Labor defines the standards for lawful child labor.

Copyright © 2004 by Prentice-Hall. All rights reserved. FLSA: Minimum Wage and Overtime Pay  Managerial, administrative, and professional employees are exempt from the FLSA’s wage and hour provisions.  Employers are required to pay covered (non- exempt) workers at least the minimum wage for their regular work hours.  Overtime pay is also mandated.

Copyright © 2004 by Prentice-Hall. All rights reserved. Minimum Wage  Set by Congress and can be changed.  Currently, it is set at $5.15 per hour.  Employers are permitted to pay less than minimum wage to students and apprentices.  An employer may reduce minimum wages by an amount equal to the reasonable cost of food and lodging provided to employees.

Copyright © 2004 by Prentice-Hall. All rights reserved. Overtime Pay  An employer cannot require nonexempt employees to work more than 40 hours per week unless they are paid one-and-a half times their regular pay for each hour worked in excess of 40 hours.  Each week is treated separately.

Copyright © 2004 by Prentice-Hall. All rights reserved. Other Federal Employment Laws (1 of 2) LawDescription Employee Retirement Income Security Act (ERISA) Prevents fraud and other abuses associated with private pension plans. Consolidated Omnibus Budget Reconciliation Act (COBRA) Permits employees and their beneficiaries to continue their group health insurance after an employee’s employment has ended.

Copyright © 2004 by Prentice-Hall. All rights reserved. Other Federal Employment Laws (2 of 2) LawDescription Family and Medical Leave Act (FMLA) Guarantees workers unpaid time off from work for medical emergencies, birth or adoption of a child. No loss in pay, benefits, and status up returning to work. Immigration Reform and Control Act (IRCA) Makes it unlawful for employers to hire illegal immigrants. Employers are required to complete INS Form I-9 attesting legal U.S. citizenship or legal alien status of each employee.

Copyright © 2004 by Prentice-Hall. All rights reserved. Unemployment Compensation and Social Security Laws Federal Unemployment Tax Act (FUTA) Social Security Federal Insurance Contributions Act (FICA) Self-Employment Contributions Act

Copyright © 2004 by Prentice-Hall. All rights reserved. Unemployment Compensation and Social Security Laws (1 of 2) LawDescription Federal Unemployment Tax Act (FUTA) Requires employers to pay unemployment taxes. Unemployment compensation is paid to workers who are temporarily unemployed. Social Security Federal system that provides limited retirement and death benefits to covered employees and their dependents.

Copyright © 2004 by Prentice-Hall. All rights reserved. Unemployment Compensation and Social Security Laws (2 of 2) LawDescription Federal Insurance Contributions Act (FICA) Requires employees and employers to make contributions into the Social Security fund. Self-Employment Contributions Act Requires self-employed persons to pay Social Security taxes equal to the combined employer-employee amount.