1. CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Management Chapter 3: Legal and Ethical Issues

2. 2 CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Fair Labor Standards Act  Also known as the Wage and Hour Law  Covers most private employers  Minimum wage can include room and board, tips, commissions, bonuses  Overtime pay is time-and-a-half for hours over 40 in a week  Some industries are exempt  Child labor laws restrict children in the workplace  Equal Pay for Equal Work means men and women should be paid the same

3. 3 CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Unemployment Insurance and FICA  Unemployment insurance is paid by the employer  Amount paid depends on claims  Special exemptions for family and farms  Must work minimum to for eligibility  Disqualified if discharged for cause  Social Security (FICA) covers Medicare, retirement, disability, and death benefits  Most employees are covered  Withholding is required to an earnings limit

4. 4 CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Employee Retirement Income Security (ERISA)  Passed to regulate private pension plans, does not require pension plans  Ensures management is not favored  Employees vested in reasonable time  Establish financial control rules related to pension trust funds  Proves pension termination insurance  Pension Benefit Guaranty Corporation  Health maintenance organizations

5. 5 CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Occupational Safety and Health Act  Ensures safe work place for employees  Establishes safety and health standards  Provides guidelines for inspections  Employee health concerns and complaints focus on health problems or discomfort from the job  The entire organization is responsible for health and safety  Fines, injunctions, and criminal actions can apply  Reorganized to reduce inspections and focus on health standards

6. 6 CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Workers’ Compensation  Provides coverage to employees that are incapacitated because of accidental injury, disease, or death while on the job  Employer payments based on claims and number of employees  Employees are eligible if injury happens on the job

7. 7 CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Title VII of the Civil Rights Act  Prohibits discrimination based on race, color, religion, gender, national origin  Cannot discriminate in hiring, retaining, promoting, or laying off employees  Bona fide occupational qualifications  Enforcement handled by the EEOC  Burden of proof on employee (EEOC)  Remedies vary

8. 8 CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Additional Acts  Equal Pay for Equal Work Act Requires equal pay regardless of gender Permitted if pay is based on quantity produced Violation raises lower waged employee to the level of favored employee  Age Discrimination in Employment Act Prohibits discrimination based on age when workers are at least 40 years old There are exceptions for certain jobs like airline pilots, police, and firemen Damages can include reinstatement, back pay, and attorney fees

9. 9 CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 More Acts  Rehabilitation Act of 1973 Covers federal government employees or those working on government contracts Employers who participate in contracts of $2,500 per year or more are required to take affirmative action in hiring handicapped individuals Handicapped individuals must show they are otherwise qualified for the job Damages can include severance, hiring or reinstatement, or payment of back wages  Americans with Disabilities Act Extension of the Civil Rights Act (1964) Businesses must make reasonable accommodations that don’t create a hardship

10. 10 CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Still More Acts  Family Leave and Medical Leave Act Enacted because of changes in household make-up and possible discrimination Designed to balance business and family needs, allow for reasonable medical leave, and promotion of equal employment opportunities Must be employed for 12 months or 1,250 hours Employers with 50 or more employees 20 weeks a year Entitled to 12 workweeks in a 12-month period for birth or adoption of a child, care of employee or a family member or with a serious health problem  Pregnancy Discrimination Act Prohibits discrimination based on pregnancy

11. 11 CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Labor-Management Relations (Private Employers)  National Labor Relations Act Enforced by the NLRB Covers employers engaged in private business affecting commerce Protects employees interested in unions  Wagner Act (1935) First comprehensive federal labor legislation Established the NLRB Gave employees the right to assist, form, and join a union Establishment of unfair labor practices on the part of the employer

12. 12 CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Labor-Management Relations (Private Employers)  Taft-Harley Act (1947) established the NLRA Employer unfair labor practices Union unfair labor practices Permitted a union shop Free speech Right to work law  Landrum-Griffin Act (1959) Election of union officers Conduct of meetings Management of union funds

13. 13 CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Labor-Management Relations (Private Employers)  Means and effect of union recognition Voluntary recognition of the union Union recognition  The election process  Unfair labor practices by employer Interference with employee’s rights Domination of union Discrimination because of union Refusal to bargain in good faith  Union campaign  New election ordered  Order for election  Union election  Majority vote

14. 14 CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Labor-Management Relations (Private Employers)  Unfair labor practices by union Refusal to bargain in good faith Striking with a no-strike clause intact Certain types of picketing  Union-management relations Collective bargaining to work out a contract  Union relationship with employees  Impact on management-employee relations  Role of the arbitrator Union may not strike Arbitrator’s ruling is law

15. 15 CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Labor-Management Relations (Private Employers)  Potential NLRB remedies Injunction New election Union recognition Good-faith bargaining  Trends in unionization Union membership has changed A declining industrial base in the U.S. has reduced union jobs Use of robotics and technology affects number of workers Decline in total union membership to 15% of workers

16. 16 CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Discipline  Any action directed toward an employee who fails to follow policies, procedures, or rules  Must be enforced consistently  Problem in determining how much is appropriate and in what form Progressive discipline uses a series of steps that increase the amount and type Discipline without punishment is for employee awareness  Random discipline reprimands on a random basis, uses fear to correct problem behaviors

17. 17 CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Counseling and Grievances  Counseling involves the confidential exchange of ideas and feelings that affect the employee’s attitude toward the job Directive counseling Nondirective counseling Participative counseling  Nonunion firms do not have official grievance policy Open-door policy Peer review policy Arbitration  In union settings, grievance policy is defined in the contract

18. 18 CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Employee Separation  Separation may be a resignation, layoff, suspension, dismissal, or retirement  Policies are in place for various types of separation  Legal separations based on employment-at- will doctrine  Document all separations  Handbook and contract statements describe situations  Provide reasonable cause for termination of employee in writing for protection

19. 19 CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River, NJ 07458 Emerging Employment Issues  Decline of the employment-at-will doctrine  Employee privacy issues regarding lie detectors, increased use of drug testing, privilege against defamation, and invasion into personal privacy  Alternative dispute resolution using mediation and arbitration  Sexual harassment using the reasonable woman test and affirmative defense  International law