Business Law IX: Other Federal Laws/Regulation

Question 1

Title VII of Civil Rights Act of 1964

Answer 1

Forbids Discrimination in employment based on race, color, religion, sex, national origin

Question 2

Title VII applies to

Answer 2

1. Employers with 15 or more employees for 20 weeks and whose business affects interstate commerce
2. Employment agencies
3. Labor Unions
4. Federal/State/Local government employees

Question 3

Title VII covers virtually all employment practices, including:

Answer 3

1. Hiring
2. Promotion
3. Transfers
4. Firings
5. Compensation
6. Job assignments

Question 4

Title VII is enforced by

Answer 4

1. Equal Employment Opportunity Commission (EEOC)

2. Civil actions by individual plaintiffs

Question 5

Types of Discrimination

Answer 5

1. Intentional - disparate treatment

2. Discriminatory impact - disparate impact (requiring h.s. diploma to be janitor)

Question 6

Employer Defense: Bona Fide Occupational Qualification (BFOQ)

Answer 6

If requirement that has discriminatory impact is BFOQ pertaining directly to needs of job, then not Title VII violation

Question 7

Employer Defense: Bona Fide seniority/merit system

Answer 7

No affirmative action plan can override such systems

Question 8

Age Discrimination in Employment Act (ADEA)

Answer 8

Purpose is to eliminate discrimination in individuals 50 or over.

Question 9

Americans with Disabilities Act (ADA)

Answer 9

Purpose is to ensure our economy takes advantage of skills/abilities that disabled persons offer.

Question 10

Social Security Benefits

Answer 10

1. Purpose - partial replacement of earnings when a worker retires
2. Mechanism - monthly benefits paid to retired insured worker from 62 onward
3. “fully insured” worker (minimum of 10 yrs contribution), entitled to:
   - survivor benefits
   - disability benefits
   - old age retirement benefits

Question 11

Medicare

Answer 11

1. Covers portion of costs of hospitalization/med benefits of insured workers/spouses 65+

Question 12

Disability Benefits

Answer 12

1. Covers severe physical/medical impairment preventing work for > 1 yr or expected to result in death
2. Must be total disability
3. After 24 months, medicare kicks in

Question 13

Federal Insurance Contributions Act (FICA)

Answer 13

1. Imposes SS tax on employers, employees, self-employed

2. Applies only to part of compensation deemed “wages”

Question 14

Current FICA Rates

Answer 14

7.65% (6.2% SS, 1.45% Medi)

SS currently capped at $117K

Question 15

“Willful Failure” to pay tax liability

Answer 15

Awareness of the obligation and conscious/voluntary payment of someone else with funds that should have been used to pay the tax owed.

Question 16

Federal Unemployment Tax (FUTA)

Answer 16

1. Purpose - provide unemployment compensation benefits to workers who lose jobs/can’t find new ones
2. Mechanism - federal, state, only $7K

Question 17

Fair Labor Standards Act (FLSA)

Answer 17

1. Applies to all businesses that affect interstate commerce
2. Four major sections:
   - Minimum Wage
   - Overtime Standard
   - Child Labor Restrictions
   - Equal Pay Provision

Question 18

Minimum Wage

Answer 18

1. Must be paid = $7.25
2. Year end bonuses not figured in
3. Interns included if their work gives a company immediate advantage or they displace a regular worker
4. Does not cover independent contractors

Question 19

Overtime Standard

Answer 19

1. Employees working > 40/week mus receive 1.5x
2. No “offset” for weeks where employees work < 40
3. May use hourly, weekly, monthly pay base provided minimum hourly rate/overtime standards are met

Question 20

Child Labor provisions

Answer 20

1. Excludes those under 18 from hazardous jobs
2. 16 is basic minimum age for employment
3. 14-15 limited to certain occupations such as sales/clerical
4. < 14 can only work for parents or court-approved contracts

Question 21

Equal pay

Answer 21

1. Prohibits from discrimination on basis of sex by paying unequal wages for same work
2. Allows pay variance based on seniority, merit, quality/quantity of work
3. Covers even executive, administrative, professional employees as well as fed/state govt employees

Question 22

Employee Retirement Income Security Act of 1970 (ERISA)

Answer 22

1. Protects employee rights in existing pension plans and offers tax incentives to employers/employees who fund them
2. Applies to employee pension/welfare benefit plans
3. If employer sets up pension plan, must vest immediately - employees have ability to contribute
4. Must fully vest after 5 years
5. Must have written plan to avoid mismanagement

Question 23

Defined-benefit pension plan

Answer 23

1. Ensure eligible employees specified monthly income for life
2. insured by Pension Benefit Guaranty Corporation (PBGC)
3. some plans “integrated” with SS benefits

Question 24

Defined-contribution pension plan

Answer 24

1. Specify annual fixed-share contributions to be made by employer and hope wise investing will provide generous benefits
2. investment decisions often can me made by employee
3. no PBGC insurance

Question 25

Federal Consolidated Budget Reconciliation Act (COBRA)

Answer 25

Amended ERISA to provide health insurance in some circumstances after job loss.

Usually 18 months.

Question 26

Family Medical Leave Act of 1993 (FMLA)

Answer 26

1. Purpose - balance employee’s workplace demands with needs of family
2. Unpaid leave of 12 weeks for certain events such as birth, adoption, serious health issue