CHAPTER 21 EMPLOYMENT RELATIONSHIPS I EMPLOYMENT AT WILL Under this doctrine either party may terminate the employment relationship at any time and for any reason unless doing so would violate the provisions of an employment contract or statute Does not apply to independent contractors A Exceptions to the Employment at Will Doctrine 1 Exceptions based on Contract Theory Implied employment contract exists if employee is fired outside terms of implied contract he may seek action and succeed Key factor to consider employee s reasonable expectation based on company rules or manual Good faith covenant 2 Exceptions based on Tort Theory Discharge of an employee may give rise to an action of wrongful discharge infliction of emotional distress defamation etc under tort theories Tort theory of fraud an employer might be held liable for making false promises to a prospective employee if person detrimentally relies on such representations by taking the job 3 Exceptions based on Public Policy Court apply this exception when an employee is fired for reasons that violate fundamental public policy of the jurisdiction policy must be expressed clearly in statutory law Whistleblowing is also an exception cannot fire employee for blowing the whistle on employer s wrongdoing B Wrongful Discharge agency When it is in violation of contract or statutory law protecting employees Employer might also be held liable under common law doctrines like tort theory or II WAGES AND HOUR LAWS Davis Bacon Act requires contractors and subcontractors working on federal gov t construction projects to pay prevailing wages Walsh Healy Act requires that a minimum wage as well as overtime pay at 1 5 times regular pay rates be paid to employees of manufacturers or suppliers entering into contracts with agencies of the federal gov t Fair Labors Standard Act extended wage hour requirements to cover all employees engaged in interstate commerce A Child Labor Children under 14 allowed to work for their parents delivering newspapers and employed in agricultural and entertainment areas Children above 14 below 18 allowed to work but not in hazardous occupations B Minimum Wages Minimum wage 7 25 per hour if state law establishes a higher one then employee is entitled to the higher one If base salary is 7 25 but it is compensated by tips then it is OK C Overtime Provisions and Exemptions Overtime wage must be 1 5 the regular wage applies when employee has worked more than 40 hrs per WEEK Executives professional and administrative employees are not covered under provisions LAYOFFS III A The Worker Adjustment and Retraining Notification Act Requires large businesses to provide sixty days notice before implementing a mass layoff or closing a plant that employs more than 50 full time workers Mass layoff employment loss of either At least 33 of the full time employees at a single job site and at least fifty employees or At least five hundred full time employees Employment loss layoff that exceeds six months or a reduction in hours of work of more than 50 during each month of any six month period 1 Notification Requirements Must be sent to employee or representative if member of a union as well as state and local authorities Employers can sometimes avoid the WARN notice by staggering layoffs over many months at various locations 2 Remedies for Violations Employees can recover salary for each day of violation and companies may be fined up to 500 for each day of violation B State Laws Requiring Layoff Notices These laws may have different and even stricter requirements than WARN act IV FAMILY AND MEDICAL LEAVE FMLA does not supersede any state or local law that provides more generous family or medical leave protection A Coverage and Application Requires employers who have fifty or more employees to provide an employee for up to 12 weeks of unpaid family medical leave during any 12 month period Covers private and public gov t officials who have worked 1 250 hours for their employees for at least a year B Benefits and Protection When an employee takes FMLA leave employer must continue the worker s health care coverage on the same terms as if employee had continued to work After leave employee must be restored into same position or a similar comparable one Exception key employees pay falls within top 10 percent of firm s workforce C Employer Violations An employer that violates the FMLA can be required to provide the following remedies Job reinstatement Damages for lost wages and benefits Promotion if a promotion was denied If a leave did not fall under FMLA but employer does not notice employee then employee might seek damages WORKER HEALTH AND SAFETY V A Occupational Safety and Health Act Primary legislation protecting employee s health and safety applies to practically every employee in the country 1 Requirements Requires specific safety standards that employers must follow depending on the industry If a work related incident causes a death or 5 or more employees are hospitalized the company must inform the U S department of labor within 48 hours Illness records must be kept by firms with 11 or more employees 2 Enforcement Procedures and Violations Compliance officers may inspect facilities and premises employees can file complaints and employer cannot discharge employee who files complaint B State Workers Compensation Laws Administrative procedure for compensating workers injured on the job Employers may buy insurance or be self insured to be able to pay claims Instead of suing company employee files claim with administrative agency 1 Workers Compensation Requirements Requirements to recover benefits under state workers compensation laws Existence of employment relationship Accidental injury that occurred on the job or in the course of employment 2 Workers Compensation and Litigation An employee who accepts compensation is prohibited from suing INCOME SECURITY VI A Social Security Employees and employers contribute under the Federal Insurance Contribution Act to help pay for benefits that will partially make up for the loss of income on retirement A percentage of salary is withheld from employee by employer for this purpose amount adjusted as cost of living rises Wages above 106 800 do not apply B Medicare Federal government health insurance program administered by Social Security Administration Both employee and employer pay this tax but there is no cap on amount of wages subject to Medicare C Private Pension Plans Employee Retirement
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