| HRM Legislation | Updated 2/7/02 | |
| (refer to pages 121-2) | ||
| Law | Description | Implications to Managers |
| Worker's Compensation | Insurance for injured workers | Provides income to injured workers through employee and employer taxes. Rates are determined by the type of business and the number of employees receiving benefits. The more usage, the higher the cost to the employer. Managers may choose to protest claims before the employee and an administrative judge. Of special concern are claims of back and repetitive injury. |
| Social Security Act | Retirement, disability, and unemployment insurance | Funded through payroll, unemployment claims are charged against your account even months after employee leaves. Excess money paid into your "account" beyond actual unemployment claims is never returned to the employer. |
| Wagner Act | Labor Unions and NLRB | Establishes the right to unionize and created extensive regulations concerning union/business interactions. Created the National Labor Relations Board that serves to rule on labor issues. |
| Fair Labor Standards Act | Wage regulation | Employer must pay a federal minimum wage, identify exempt (salary) and non-exempt (hourly) employees, and pay for overtime. Note that there may also be a state minimum wage which is equal or higher than the federal level. Increases in the minimum wage serve to increase the costs of employees at levels above which can often result in a large overall increase in labor costs and a narrowing between exempt and non-exempt wages called "wage compression." |
| Taft-Hartley Act | Employer protection related to unions and Right to Work legislation | Managers can terminate an employee without cause in a state without right to work laws although other factors should be considered. "Right to Work" state legislation suggests that having employment is as basic as other human rights thus making it difficult for employers to remove employees from their job. Employees should always be terminated as a result of a measureable performance drop. |
| Landrum-Griffin Act | Union rights to organize. | Controls what unions can and cannot do on your premises. |
| Equal Pay Act * | Equal pay for equal work in terms of skill, effort, responsibility, and working conditions. Can pay differently for different shifts, geographical regions, or due to merit plans or seniority. | Employers should create job categories and establish pay scales for each. Jobs may be grouped by similar tasks or function. Even within the same company, you can pay people different rates that live in different locations due to cost of living variances. Pay may very due to seniority or performance variances (merit pay). |
| Title VII of Civil Rights Act* | Restricts employment decisions in companies with 15 or more employees on race, creed, color, sex, or national origin defined as a protected class. Distinctions cannot be made related to treating individuals different (disparate treatment) or that have an unequal effect on a protected class (adverse impact). | Hiring must be based on qualifications and use acceptable interview questions (p. 113-4). See the four-fifths rule. Employers should identify bona fide occupational qualifications and include them on job descriptions. Policies should support pregnancy and suppress forms of harassment. An employer must move beyond a moral or ethical stand and demonstrate a proactive approach to hiring and support of protected classes. |
| Executive Order 11246 * | Reinforces Title VII and creates affirmative action in federal contracts. | Some companies have created hiring with preference to historically disadvantaged groups. You should be aware that if your business is being paid with federal money, this law may apply to you even if the money is indirectly coming through another party such as a subcontractor. |
| Age Discrimination in Employment Act (ADEA)* | Limits age-based employment decisions | Related to age 40 and over employment decisions. Care should be taken to have a layoff plan in advance that doesn't discriminate against older employees and to terminate only on a performance drop over a period of time. One bad performance rating after years of good performance reviews smells bad to a jury. Here is an example of good force reduction. |
| Occupational Safety and Health Act | Safety and health standards. The code is very detailed, extensive, and unevenly enforced. OSHA homepage. | Set standards for businesses and a regulatory body to enforce them. OSHA has the power to enter your business, determine violations and to require you to correct them either immediately or within a set period or face a fine. Some standards enforced by local government and health departments. OSHA at work. If in doubt, invite them in and demonstrate that you are concerned about the safety of your employees. (You are, aren't you?) |
| Employee Retirement Income Security Act (ERISA) | Created regulations concerning retirement plans. Concerns "pension" plans and a growing shift to "self-managed" plans. | Created specific steps that an employer must do in creating and managing plans. Many middle to small size companies hire retirement services to administer the regulations related to these plans. To do it yourself requires a plan document (a frightening legal document that costs thousands), eligibility testing, regular updates to the plan and reports, and tax considerations. |
| Job Training Partnership Act | JTPA offers job training programs | Source of employees from the chronically unemployed or displaced. |
| Vietnam-Era Veterans Readjustment Act * | Prohibits discrimination on federal level | |
| Pregnancy Discrimination Act | Prohibits discrimination against pregnant workers | Regulates maternity and hiring. Pregnancy should be viewed as an "illness" in that you are required to return the employee to the same level position at the same level of pay although you don't have to give them the exact same job upon their return. Also see FMLA below. |
| Consolidated Omnibus Budget Reconciliation Act (COBRA) | Continues health insurance after employment | Requires employers to offer health insurance to separated or terminated employees at cost. Employer must notify employee with a certified letter to inform the employee of their rights. Due to the expense of footing the entire cost of insurance (often $800-$1000 per month), most employees will not elect to continue their coverage after they leave your employment. |
| Immigration Reform and Control Act | Documents legal status and prohibits discrimination | Employer must complete I-9 forms with two ID's. These are standard forms. One ID must have a picture such as a passport or drivers license. The other can include a social security card or green card. This is how you can determine the age of an employee after you hire them to make sure they are of legal age to work. |
| Worker Adjustment and Retraining Act (WARN) | Notification of layoff |
Give employees 60 days notice before layoff. A sample letter.
|
| Drug-free Workplace Act | Restricts employee drug use. Relates to government contractors. | Employers must establish and enforce policies related to drug use. Creates employer liability and is basis for drug testing. |
| Americans with Disabilities Acts (ADA) * | Prohibits discrimination based on disability which is one or more activities of daily living. Includes perceived disabilities. Requires reasonable accommodations. | Businesses cannot discrimination and must use "reasonable accommodation" to modify the workplace for employees and customers. Should identify essential job functions versus marginal functions and put into job descriptions. Major business renovations, expansion, or new construction should be in accordance to ADA regulations. |
| Civil Rights Act | Allows for monetary punitive damages and eliminates quotas to strengthen Title VII | |
| Family and Medical Leave Act (FMLA) | Unpaid leave totaling 12 weeks for childbirth, adoption, or immediate family illness | Employer must maintain records of leaves, notify employees of benefits, accommodate illness, and maintain positions and salaries of employees out on leave. |
| Uniformed Services Employment and Reemployment Rights Act | Permits individuals to fulfill military service obligations | Requires employers to allow individuals to serve in the National Guard or Reserves. |
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Health Insurance Portability and Accountability Act
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Allows transfer of existing illnesses when moving from one plan to another
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Keeps companies and insurance companies from refusing to provide health insurance as a result of "pre-existing conditions"
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| EEO Law* |
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By Bob Eliason
E-mail: eliasorg@jmu.edu
