Ch20 Employment and Worker Protection Laws.docx

Chapter 20 EMPLOYMENT AND WORKER PROTECTION LAWS Who needs protection—the employer or the employee? I. Overview In the past, the dominant contractual form the employment relationship has taken has been found in the employment at will doctrine. This doctrine assumes that given equal bargaining power, and absent express or implied agreement to the contrary, either the employee or employer may end the relationship. This termination can come about at any time, for any reason, bilaterally or unilaterally. The doctrine has long been under fire because of being myopic on two main scores: it presumes equality of bargaining power between the employer and employee and that the employment relationship is a totally private contractual matter between the contracting parties. Recent cases and legislative enactments have greatly eroded the doctrine. On the legislative front, a number of states have decided that public policy interests in favor of certain kinds of activities must take precedence over the employer/employee relationship. Examples would include voting rights, antidiscrimination measures, whistleblower protections, and employee health and safety protections. In addition, a number of courts have seen fit to interpret employer handbooks, written and oral job policies, and other acts as indicia of an implied contract between the employer and employee. So what may have appeared originally to be the employee's economic ball and chain has also become the employer's. The simple truth is that there is a growing involvement of government at every step of the employer/employee relationship. It sets the ground rules for hiring, working conditions, paying for harm, termination, and ultimate payment of pensions and or death benefits. It all has come a long way from the simplistic and archaic notion that the employment contract is only the business of the immediate parties involved. In fact, many statutes protect the employment relationship by insuring a minimum wage, a premium for overtime, safe working conditions and, hopefully, a drug free environment. Are these statutes good or bad for business? That remains to be seen. II. Hypothetical Multi-Issue Essay Question Mr. Quincy Harpie has a problem. As a matter of fact, he has a lot of problems. He is chronically complaining about all sort of illnesses, both actual and perceived. His mother was never proud of him and kicked him out of the house at age thirty-two. Finally Mr. Harpie had to face reality and get a job. He found his first job with Mega Widgets Corporation in Backwater as a crystal widget assembler. Two weeks into the job, he complained of severe backaches and sought worker compensation for his back problems. He was awarded his claim of partial disability and proceeded to stay at home while seeking other employment. He did find other employment at Mini Widgets Corporation in the adjoining state of Massazona. He did not tell Mini Widgets about his employment history with Mega Widgets. Two weeks on the job as an assembler, guess what happened? His back flared up again. He successfully filed a worker compensation claim against Mini Widgets. He continued to also collect from Mega Widgets claiming that he was still disabled. Mr. Harpie decided to try once more and moved to East Moncalla where he found employment with Micro Widgets Corporation. Micro had a strict employment at will policy and informed Mr. Harpie of that policy in writing. After two weeks of work on Micro's assembly line, Mr. Harpie again claimed a back injury. He filed yet a third claim under workers compensation. As in the prior incidents, he did not inform Micro of any of his prior job history. Micro fought Mr. Harpie's claim and also fired him under the employment at will doctrine. Mr. Harpie claims that the doctrine is being wrongfully used against him. He is arguing that he was being fired only because he asserted his rights under the workers compensation law. At the time Micro did not know about Mr. Harpie's history with Mega and Mini Widgets Corporations. Should Mr. Harpie be reinstated at Micro Corporation? III. Outline Employment at Will At-will employees do not have employment contracts Under common law, at-will employees could be discharged by an employer at any time for any reason Today, there are many exceptions to the at-will doctrine Statutes Contracts Public policy Tort Wrongful Discharge 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 or other remedies Statutes and Policies that Protect Workers Workers’ compensation acts—injury while working Occupational Safety and Health Act (OSHA)—safety in the workplace Fair Labor Standards Act—minimum wage, overtime, and child labor protections Employee Retirement Income Security Act (ERISA)—private pension Consolidated Omnibus Budget Reconciliation Act (COBRA)—health insurance after employment ends Immigration Reform and Control Act (IRCA)—no illegal immigrants Unemployment compensation—unemployed through no fault of your own Social security system—limited retirement and death benefits Family and Medical Leave Act—medical emergencies Drug testing—screening of employees and applicants Employees Polygraph Protection Act—prohibition of most private employer polygraph tests Worker’s Compensation Acts Compensates workers and their families if workers are injured in connection with their jobs (working or at work) Worker’s compensation is an exclusive remedy against employer but can sue third parties Applies even if safety rules are ignored but not if self-inflicted injury Occupational Safety and Health Act Promotes safety in the workplace OSHA has regulations to enforce the safety standards established by the act Specific duty standards General duty standards OSHA is empowered to inspect places of employment for health hazards and safety violations Fair Labor Standards Act (many exceptions) Prohibits child labor No work under 14 14 – 15 limited hours and nonhazardous work 16 – 17 unlimited hours and nonhazardous work Establishes overtime pay—over 40 hours worked in a week (time and a half) Establishes minimum wage Employee Retirement Income Security Act Employers are not required to establish pension plans for their employees This statute is designed to prevent fraud and other abuses associated with private pension funds Consolidated Omnibus Budget Reconciliation Act Permits employees and their beneficiaries to continue their group health insurance after an employee’s employment has ended Immigration Reform and Control Act Makes it unlawful for employers to hire illegal immigrants All U.S. employers must fill out an INS Form I-9 for each employee stating that the employer has inspected the employee’s legal qualifications to work Unemployment Compensation Employers pay unemployment taxes to fund. Provides assistance if temporarily out of work through no fault of your own. Social Security Provides limited retirement and death benefits to covered employees and their dependents Employers and employees must make contributions into the Social Security fund Self-employed persons must pay Social Security taxes equal to the combined employer-employee amount Family and Medical Leave Act Guarantees unpaid time off for medical emergencies. Includes birth of, and care for, a child. Employee Polygraph Protection Act Prohibits most private employers from using polygraph tests. Exceptions include matters of national defense but must follow certain procedures. Administered by the Department of Labor. Drug Testing Preemployment testing usually upheld. Testing of incumbent employees Upheld if reasonable suspicion For random testing look to type of employer: Government needs a good reason (e.g. customs and safety) Private employers look to agreement, but often upheld. IV. Objective Questions Terms: 1. The administrative procedure created so that workers receive compensation for injuries that occur on the job is called _______________ ________________. 2. The 1970 Occupational Safety and Health Act created the _______________ _______________ _______________ _______________, a federal administrative agency empowered to administer the Act and adopt rules and regulations to interpret and enforce the Act. 3. The ________ ___________ _____________ ______ helps control child labor. 4. Since 1935, most workers who are temporarily unemployed are entitled to _______________ ________________. 5. Under the Fair Labor Standards Act, employers are required to pay a ________________ wage to employees. True/False: 1. ____ An at-will employee could be discharged by an employer at any time and for any reason under common law. 2. ____ The Employee Polygraph Protection Act is administered by the Department of Justice. 3. ____ Under the Fair Labor Standards Act, an employer cannot require nonexempt employees to work more than 40 hours per week unless they receive overtime pay. 4. ____ Payments under workers' compensation programs include hospital and medical benefits, disability benefits, and death benefits to dependents, but not recovery for certain body parts. 5. ____ Employers are required to establish pension plans for their employees. 6. ____ Drug testing is always permitted of current and potential employees. Multiple Choice: 1. Under the Fair Labor Standards Act, which of the following does not define lawful child labor? Children aged 14 and 15 may work limited hours in nonhazardous jobs approved by the Department of Labor. Children aged 16 and 17 may work unlimited hours in nonhazardous jobs approved by the Department of Labor. C. Child actors and performers are exempt from child labor law restrictions. D. Children under the age of 14 cannot work as newspaper deliverers. 2. Edwin Employee worked for ABC Creditcard, an employer legally permitted to use polygraph testing. Which of the following statements is not true with regard to Edwin? A. ABC must give notice to Edwin. B. ABC must use licensed examiners. C. The polygraph examiner may ask Edwin any questions he wants to ask. D. The polygraph examiner may not ask questions relating to Edwin's religion or sexual behavior. 3. Edna Employee is employed as a secretary by Megacorp. Since this is a slow week for dictation, Megacorp asked Edna to work only 30 hours this week and 50 hours next week. When Edna received her check, she received no overtime pay for the extra 10 hours during the 50 hour week. Edna feels she is entitled to the overtime pay. What result? Under the Fair Labor Standards Act, an employer can require nonexempt employees to work more than 40 hours per week without overtime compensation. For purposes of determining overtime compensation, weeks are not treated separately. Therefore, Edna is not entitled to overtime pay for 10 hours of the 50-hour week. For purposes of determining overtime compensation, each week is treated separately. Therefore, Edna is entitled to overtime pay for 10 hours of the 50-hour week. D. None of the above. 4. Lunching Linda was on her personal lunch hour at the Et Yet? Cafe. Distracted Doris spilled boiling hot split pea soup on Linda. Because Linda does not think Doris has any money, she decides to seek recovery from her employer under workers' compensation. Which of the following must Linda prove? A. That she is an employee and not an independent contractor. B. That the injury arose out of and in the course of her employment. C. That she was at Et Yet? on an errand for her employer. D. All of the above. 5. Which of the following statements about Social Security is untrue? A. Self-employed persons do not have to pay Social Security taxes. B. Social Security includes retirement benefits. C. Survivors' benefits to family members of deceased workers are included in Social Security. D. Social Security is not like a savings account. Statute Exercise: Choose the correct statute or government program form the left column and match it to the explanation on the right column. ERISA Exclusive remedy for job-related injuries Workers’ Compensation acts Minimum wage Fair Labor Standards Act Assistance for temporary loss at work Family and Medical Leave Act Limited retirement and death benefits COBRA Protect private pension plans OSHA Continuation of health insurance post-employment IRCA Safety in the workplace Social Security Deals with illegal immigrants Unemployment Compensation Unpaid time off for medical emergencies V. Answers to Objective Questions Terms: 1. Worker's compensation. The basic statutory scheme is designed to avoid the waste and expense of seeking compensation for work-related injuries through the courts. It is one of the earliest forms of contract-based strict liability. 2. Occupational Safety and Health Administration. This agency has power to promote and regulate safety in virtually all workplaces except federal, state, and local government workplaces. It is part of the Department of Labor, and it imposes a number of record-keeping and reporting requirements on employers. 3. Fair Labor Standards Act. This also deals with minimum wage and overtime. 4. Unemployment compensation. The federal government sets the guidelines for these benefits, but the actual administration of these employer-contributed taxes is handled by the individual states. 5. Minimum. This is one of the provisions of the Fair Labor Standards Act of 1938 and it is occasionally amended to reflect the higher costs of living due to inflation. Much political debate revolves around this provision due to its effects on the job market at the lowest end of the employment spectrum. True/False: 1. True. This common law doctrine is still very important in the study of employment law in spite of all the statutory and public policy based case law exceptions written into it in today's legal environment. 2. False. The Employee Polygraph Protection Act is administered by the Department of Labor. As new detection technologies emerge, we can expect to see more legislation of this sort to help protect employees from abuses of that technology. 3. True. This provision of the act was designed to combat some of the sweatshop abuses commonly used in the early shift of our society from an agricultural base to the industrial era. 4. False. Worker's compensation legislation includes recovery for certain body parts. These schedules are either listed by statute or agreed upon between the contracting parties. 5. False. Private pension plans are not required per se. But if they are established, they must conform to all applicable federal and state laws. 6. False. It is usually permitted for incumbent employees while the rules for current employees depend on the type of employer. Multiple Choice: 1. D. Newspaper delivery work has always been allowed as an exception to the general rules of child labor. It is interesting to note, however, that hard times are forcing more and more adults into these jobs. 2. C. There were a number of abuses by employers, coupled with the scientific shortcomings of polygraph inaccuracies, which led Congress to pass the Employee Polygraph Protection Act in 1988. 3. C. This is one of the requirements of the Fair Labor Standards Act of 1938, as amended. 4. D. All three are elements required in order to show that Linda is qualified for coverage and payment under typical worker's compensation acts. 5. A. Under the Self-Employment Contributions Act, self-employed individuals must also pay into Social Security. The amount of taxes self-employed individuals must pay is equal to the combined employer/employee amount. Statute Exercise: 2 3 9 8 1 5 6 7 4 VI. Answers to Essay Question The employer/employee relationship between Mr. Harpie and Micro Widgets Corporation is clearly one of employment at will. The parties have agreed to this in writing. Under that doctrine, either party may terminate the relationship at any time for any reason, subject to limitations imposed as a matter of public policy, by statute or by court precedent. There may be limitations imposed by the State of East Moncalla on the employment at will doctrine. Examples might include protection of whistleblowers or protection of persons who refuse to break the law at the behest of their employers. But none of these limitations are designed to protect the employee to the extent of shielding his or her own wrongdoing. Worker’s compensation fraud is one of the fastest growing and costliest crimes that today’s employers face. States have not acted in concert to prevent this fraud as well as they might have. That failure to enforce against this sort of fraudulent behavior has made cases like Mr. Harpie’s very common and very costly. Under the employment at will doctrine, unless Mr. Harpie can show that one of the exceptions applies based or public policy, case law, or statute, Micro Widgets can fire him. If they know haw bad an apple he really is, they should seek to have criminal charges filed also. Then maybe he can develop a bad back while punching out license plates.