Employment Law OBE 118 Fall 2004 Professor McKinsey

Employee vs. Independent Contractor Most of the law we are studying as “employment law” applies when a worker is classified as an “employee” Factors 1) Degree of control and supervision over how and when work is done 2) Same business? 3) Skill and tools of employed person? 4) Length of period of time for work to be performed?

Classifications of Employees Employee vs. Independent Contractor

Most of the law we are studying as “employment law” applies when a worker is classified as an “employee” Factors 1) Degree of control and supervision over how and when work is done 2) Same business? 3) Skill and tools of employed person? 4) Length of period of time for work to be performed?

Independent Contractors Relationship mostly governed by contract law and perhaps also agency law, not employment law. No required unemployment, social security taxes etc. Thus, less costly for employers. But employers loses a degree of control.

Classifications of Employees Employee vs. Independent Contractor Hourly versus Salary (different compensation rights)

Hourly versus Salaried Salaried employees are those employees “exempt” from some provisions of the wage-hour laws (such as overtime) Category of an employee is a complex question, is industry specific and job specific. The desire of an employer, or the official title or classification given the employee usually has little importance in deciding whether an employee is salaried or hourly

Factors that Help Determine Salaried Status Is employee pay mostly unrelated to amount (hours) of work? –Is employee pay reduced for late arrival? –Is employee pay reduced for missing a significant part of a day? –Is employee pay reduced for missing a day? Does employee have managerial, executive, or professional tasks and responsibilities? Does employee have a high degree of independence?

Classifications of Employees Employee vs. Independent Contractor Hourly versus Salary (different compensation rights) Public versus Private (diff. employment rights) At-Will versus Contract (diff. termination rights)

At-Will versus Contract Employees An “at-will” employee can be terminated at any time for “any” reason Even if an employee is called an “at-will” employee, however, there are various things that an employer can do that could create some degree of protection against termination.

Classifications of Employees Employee vs. Independent Contractor Hourly versus Salary (different compensation rights) Public versus Private (diff. employment rights) Agency Status (also an agent?) At-Will versus Contract (diff. termination rights)

Some Basic Employee Rights Worker’s Compensation: Wage-Hour Laws –Salaried versus hourly distinction important here ERISA (Employee Retirement Income Security Act) OSHA- Labor Laws- right to engage in organized labor activities FMLA- 12 weeks unpaid leave for family matters (6 paid weeks in California as of July 1, 2004)

Right to Work? The At-will Employment versus Wrongful Discharge paradox At-will employees can be fired for “any reason” except: –Public Policy –Implied Contracts –Covenant of Good Faith and Fair Dealing

The Right to Unionize Several laws established the right to unionize Clayton Act of 1914 Anti-injunction Act of 1932 National Labor Relations Act of 1935 Other laws have helped Freedom of speech (1940 Supreme Court Case)