1. AB298 Associates Capstone in Accounting State and Federal Laws and Regulations on Business Unit 2 CHAPTER 5 Unit 2 Seminar Seminar

2. Many Laws that Affect Personnel  Fair Labor Standards Act (FLSA)  Federal Insurance Contribution Act (FICA)  Income tax withholding laws  Federal, state and local  Unemployment tax acts  Fair employment laws  Other federal laws  State minimum wage and maximum hour laws and other state specific laws

3. Fair Labor Standards Act (FLSA)  Federal Wage & Hour Law of 1938  Minimum wage is $7.25/hour  Equal pay for equal work provisions  Sets law for companies involved  In interstate commerce or  In production of goods/services for interstate commerce  Requires payroll records be maintained

4. Federal Insurance Contributions Act (FICA)  Comprised of two taxes  Both taxes paid by ER (employer) and EE (employee)  OASDI (Old Age, Survivors & Disability Insurance)  6.2% with a cap that is cost-of-living indexed  HI (Health Insurance Plan - Medicare)  1.45% with no cap

5. Income Tax Withholding Laws  Federal income tax  Levied on earnings of employees  Income tax is withheld from paychecks  State and local income tax  Income tax is withheld from paychecks  Different in each state  Not all states have state income tax

6. Unemployment Tax Acts  FUTA (Federal Unemployment Tax Act)  ER tax – paid on $7,000 per EE per year  Taxes used to pay state and federal administrative expenses, not used to pay unemployment benefits  SUTA (State Unemployment Tax Act)  Mandatory unemployment insurance – each state is different  SSA outlines standards that each state’s unemployment compensation law must follow  Used to pay unemployment benefits

7. Fair Employment Laws  Title VII of the Civil Rights Act of 1964  EEO (Equal Employment Opportunity)  Can’t discriminate in hiring, firing, promoting or compensating based on  Color, race, religion, national origin or gender  Applies to all ERs who engage in an industry affecting commerce and employ 15 or more workers in each of 20 or more weeks See http://www.eeoc.gov/ for more information

8. Age Discrimination in Employment Act (ADEA)  ADEA states employers cannot use age to discriminate in hiring, firing or promoting  Applies to employers with 20 or more employees  Provides protection to workers over 40 with a few key exceptions

9. Americans with Disabilities Act (ADA )  Prevents employers with 15 or more employees from discriminating against qualified persons based upon disability  “Reasonable accommodation” must be provided - this is a very vague term and subject to court interpretation

10. Federal Personal Responsibility & Work Opportunity Reconciliation Act  Requires employers to report information on all new hires within 20 days to state agency  Includes name, address and social security number (submitting copy of W-4 suffices in many states)  Records coordinated through Office of Child Support Enforcement (OCSE)  Fines up to $25/hire levied for failure to report  A few states now require same from independent contractors

11. Immigration Reform and Control Act (IRCA) Immigration Reform and Control Act (IRCA)  Law that bars hiring and retaining aliens unauthorized to work in U.S.  Accomplished by employee completing I-9 (Employment Eligibility Verification) within three business days of employment  U.S. Citizenship & Immigration Services may audit and levy penalties  Criminal penalties can apply if pattern of discriminatory practices found  E-Verify is a system that allows ERs to check employment eligibility of new hires

12. Family Medical Leave Act (FMLA) Family Medical Leave Act (FMLA)  Covers companies with 50 or more EE within 75 mile radius  Employee guaranteed 12 weeks unpaid leave for  Birth, adoption, critical care for child, spouse or parent  Leave may be used all at once or at separate times – within 12 months of qualifying event  Employer continues health care coverage  Right to return to same job or comparable when family member is on active duty or up to 26 weeks f position  FMLA expanded to include up to 12 weeks or line of duty injury/illness  Some states have paid family leave plans

13. Uniformed Services Employment & Reemployment Rights Act Uniformed Services Employment & Reemployment Rights Act  Military personnel given right to take leaves of absences from civilian jobs  Right to return to prior jobs with seniority intact  Health benefits must be started without a waiting period  Doesn’t apply if dishonorably discharged

14. Employee Retirement Income Security Act (ERISA) Employee Retirement Income Security Act (ERISA)  Trustees must monitor pension plans  Vested 100% in 3-6 years  Example of a vesting plan Years of % Vested in ServicePension Plan 2 50% 4 75% 5 100%  Provides for Pension Benefit Guaranty Corporation  A federal agency which guarantees benefits to EE  Stringent recordkeeping required

15. Current Legislation  Hiring Incentives to Restore Employment Act (HIRE) – 3/18/10  Gives ER tax credits if pay wages to previously unemployed new hire  Health Care and Education Reconciliation Act (HCERA) – 3/30/10  Most provisions effective 2014  Immediately ER must include cost of ER-provided health coverage on EE’s Form W-2  Patient Protection & Affordable Care Act – 3/23/10  Offers tax credit to small ERs who offer health insurance to EEs

16. State Laws  Workers’ Compensation  Most states require employers to pay employees’ premiums  Can self insure if state approved  Different premiums based upon job class  State Disability Benefit Laws  Five states plus Puerto Rico have established laws requiring employers to provide disability benefits  This applies even if the disability did not arise due to employment!

17. Human Resource System  FLSA requires stringent personnel recordkeeping – embodied in the Human Resource (HR) System  Requisition for Personnel notifies HR of need for new employees  Application for Employment completed by person seeking employment  No law prohibiting questions about religion, gender, race, age or national origin - but must tie into ability to perform job (for example, bilingual capabilities) –these are allowed if they are qualifications for the job  If application asks age/birth date, should contain ADEA language notifying candidate of anti-discriminatory provisions

18. Human Resource System Human Resource System  Reference Inquiry conducted before employment  Due to amount of litigation in this area, respondents should only verify facts and not offer subjective information  Really diminishes credibility of reference inquiries  Prospective employer may require applicant to sign Employment Reference Release  Must notify employee if seeking investigative consumer report  Hiring Notice alerts payroll department to new EE  Employee History Record contains performance evaluations, compensation adjustments, disciplinary issues, etc. Critical area – employment related litigation is very expensive and often times avoidable

19. Unit 2 Journal In your journal please answer the following questions regarding your company: What information did the website contain on the first page? What are the mission, vision and values of the company? What products or services does your company provide? Explain what significant innovation(s), if any, the company will make to their products or services? Please list some significant accomplishments over the life of the corporation. Please list at least 3 major accomplishments. Please make sure that your responses are in complete sentences and that you use correct grammar and punctuation. Access the Journal tab at the top of the course page.

20. Unit 2 Project Assignment: You are a mid-level manager for a large firm. Your task is to hire 20 new employees for a new production line. Prior to execution, you must report to your district manager on what your plan is to work through the hiring process to ensure compliance with local, state, and Federal regulations on Equal Opportunity in the workplace. Your report should be in the form of a one-page memo/document that discusses the regulations, listing 3 of the regulations prohibiting employment discrimination and how they will apply to your hiring process.