Creation of Employment Contracts Business Law Mrs. A LESSON Chapter 27

WHAT IS EMPLOYMENT? In general, employment exists when an employer contracts to pay an employee to do work under the employer’s supervision and control. No contract, no supervision, no control – NOT an employment relationship. Employer Employee 2 Chapter 27

Scenario #1 Phil contracts with Bill’s Roofing Service to reroof his home after a terrible wind storm. Phil promised to pay Bill $ for the job. Is Bill an employee of Phil? No, Bill is an independent contractor. Phil is not supervising or controlling Bill’s work. 3 Chapter 27

TERMS OF THE EMPLOYMENT CONTRACT (Stated in many ways) Express agreements  Written/Oral  Breach – violate an agreement Implied agreements  Employment at Will – no time stated, can be terminated for a good reason, a bad reason, or no reason at all  Custom or trade determined Items determined by federal and state law ▫Minimum wage ▫Max hours ▫Overtime pay 4 Chapter 27

Scenario #2 Hal applied for a part-time job as a cook in a restaurant. Hal and his manager Joe discussed hours and agreed Hal would work 3 p.m. to 5 p.m. on Monday, Wednesday and Friday. Hal was given a company policy manual that described the pay scale and benefits. It showed that he would be paid $10/hour. Also, Joe told Hal how he wanted the food cooked. What are the expressed terms? What are the implied terms? What state or federal law is in effect? 5 Chapter 27

EMPLOYEE DUTIES Obedience (rules/orders) Reasonable skill Loyalty and honesty (Employer’s best interest) Reasonable performance (prescribed time and manner) 6 Chapter 27

Scenario #3 Vinnie hires Matt as a welder for a three year period. Vinnie requires all welders to wear protective helmets and goggles while working. Matt, who has long hair that makes it difficult to wear the helmet, refuses to do so. Can Vinnie discharge (fire) Matt without liability since Matt has a 3-year contract? 7 Chapter 27

Employer’s Basic Duties LESSON Chapter 27

EMPLOYER’S DUTIES TO EMPLOYEES 1.Reasonable treatment 2.Safe working conditions 3.Fair Labor Standards Act (wage, hours, overtime) 4.Payroll deductions (taxes withheld) ▫The employer makes worker’s compensation and unemployment payments. NOT EMPLOYEES 9 Chapter 27

EMPLOYER’S DUTIES TO EMPLOYEES 5.Duties to minors ▫State Laws  Max # of hours to work  No night work  Sets the age for hazardous occupation s ▫Federal law  Illegal to work if under 14 years old  Exceptions : actors, working on farms, newspaper routes 6.Military service 7.Voting 8.FMLA 10 Chapter 27

EMPLOYER’S DUTY TO THOSE INJURED BY EMPLOYEES If an employee, acting within the scope of employment, commits a tort, the employee and the employer are both liable for the damages. If an employee, not acting within the scope of employment, the employee alone is liable. 11 Chapter 27

Scenario #4 Eddie was an electrician for Century Electric. One day Eddie was sent to repair mixing machines at Miller Chemical Company. Eddie did the work in a negligent manner, causing several thousand dollars’ worth of damage to the machines. Who is liable for the damages? 12 Chapter 27

Termination of Employment Contracts LESSON Chapter 27

TYPES OF EMPLOYMENT CONTRACTS 1.Employment Contracts an Employee can quit at anytime ▫Wrongful discharge  Refuse to commit perjury  File a Work Comp claim  Report a work violation ▫Employer violates contract terms  “Treat employees fairly” – promise not to fire without a fair reason 14 Chapter 27

TYPES OF EMPLOYMENT CONTRACTS 2.Employment contracts for a specific length of time (athletes) 3.Employment contracts with governments ▫Entitled to “due process” – reasons/hearing 4.Right to unemployment pay: ▫Fired without cause – you did nothing wrong, layoff, let you go Fired with cause (employee violated a rule) NO UNEMPLOYMENT PAY 15 Chapter 27