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McGraw-Hill/Irwin©2007 by the McGraw-Hill Companies, Inc. All rights reserved. 12 Employment Law I: Employee Rights.

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Presentation on theme: "McGraw-Hill/Irwin©2007 by the McGraw-Hill Companies, Inc. All rights reserved. 12 Employment Law I: Employee Rights."— Presentation transcript:

1 McGraw-Hill/Irwin©2007 by the McGraw-Hill Companies, Inc. All rights reserved. 12 Employment Law I: Employee Rights

2 Employment Law I: Employee Rights Key Points Identify importance of classification as employee or independent contractor Understand employer liability for employee actions, both vicarious liability and negligence Familiarity with basic employee rights Chapter 12

3 Employment-Related Lawsuits Employee litigation has increased Contributing factors: Expansion in employee protections Decrease in union membership Volatile economy and downsizing

4 Employee or Independent Contractor? Dominant factor in determining classification: Degree of control exercised by employer (e.g., where, when, how job to be done). Consequence of classification as independent contractor: Employer generally does not have vicarious liability for acts of worker Employer may not have to provide employee benefits Employer need not withhold employee income taxes or pay FICA, workers compensation or unemployment compensation

5 Issues in Hiring Process Resume fraud: 80% misleading 20% listed fraudulent degrees 13% of college students lied on their first resume Background checks: Criminal and credit checks Inappropriate questions Non-compete clauses: To protect legitimate employer interests, such as client lists Arbitration agreements: Enforceability generally upheld if legitimate purposes and equitable provisions References: A two-edge sword—New employers need to check references in light of resume fraud and workplace safety issues, but former employers reluctant to provide information in light of defamation threats

6 Employer’s Vicarious Liability Employers often responsible for employees’ accidents or wrongs under the doctrine of respondeat superior Referred to as vicarious or imputed liability Determining issue: Whether employee was acting within the scope of employment Example: Mary M. v. City of Los Angeles (Cal. 1991)

7 Negligence An employee may be in a position to cause harm to a third party because of the employer’s own negligence in hiring, training, supervising or retaining that particular employee, whom the employer knew or should have known to be dangerous Example: Yunker v. Honeywell (Minn. App. 1993)

8 Fair Labor Standards Act Major Objectives: Establishes a minimum wage (contrast a “living wage”) Establishes a ceiling on weekly hours and overtime pay standards Protects against child labor abuses by specifying employment restrictions by age Establishes equal pay for equal work regardless of gender

9 Occupational Safety and Health Act (OSHA) Overall duty: To provide a workplace free of “recognized hazards causing or likely to cause death or serious physical harm to employees” Achieved through: Promulgation of and adherence to specific standards Variances: Temporary or permanent variances for particular standards may be available

10 OSHA Information Requirements Right to Know: Employers must label all chemical containers so that employees will know about the chemical and its dangers; must educate employees about chemical hazards and how to deal with them Records: Businesses must maintain records listing and summarizing injuries, illnesses and deaths on the job; summary must be posted at the job

11 OSHA Enforcement Unannounced on-site inspections Citations issued if violations are discovered Court orders to restrain immediate, serious threats Fines Imprisonment Example: Jose Alatorre

12 Workers’ Compensation State laws provide automatic compensation when an employee is injured or dies Recovery requires showing that injury arose out of employment and in the course of employment No right to sue employer for compensation except in unusual circumstances (e.g., employer’s gross negligence) Law specifies monetary benefit for different injuries About 90% of workers are covered Example: Quaker Oats v. Ciha (Iowa 1996)

13 Drug Testing Employment-based alcohol and drug testing occurs in six circumstances: (1) pre-employment screening, (2) routine physical examinations, (3) “reasonable suspicion” testing, (4) post-accident testing, (5) random testing and (6) follow-up testing Objections include: (1) reliability of tests, (2) employee privacy, (3) lack of correlation to actual job impairment Drug-Free Workplace Act of 1988: Applies to employers with contracts with the federal government; they are required to develop an anti-drug policy, provide drug- free awareness programs, acquaint employees with available assistance and warn of penalties for violation of the policy

14 Monitoring 75% of major U.S. companies monitor their employees Employees should acknowledge in writing company’s usage rules and employer’s right to monitor Example: Smyth v. Pillsbury (E.D. Pa. 1996)

15 Employee Benefits and Income Maintenance 1993 Family and Medical Leave Act: Provides up to 12 weeks of unpaid leave in any 12-month period for family needs such as birth, adoption, caring for a child or parent, or serious illness Unemployment Compensation: Compensates laid-off workers so long as ready and looking for work and not otherwise disqualified; has specified maximum period, usually 26 weeks 1988 Worker Adjustment and Retraining Notification Act (WARN): Requires specified firms to provide 60 days notice if they lay off 1/3 of their workers, drop 500 employees at any site or close a plant 1974 Employee Retirement Income Security Act (ERISA): Regulates pension funds to ensure long-term financial security by reducing fraud and mismanagement

16 Termination Most Americans work without benefit of an employment contract; they are at-will employees, that may be fired or quit any time Employee may sue for wrongful discharge based on: Express or implied contract Implied covenant of good faith and fair dealing Violation of established public policy Example: Barrera v. Con Agra, Inc. (8 th Cir. 2001)


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