Chapter 10: "Employment, Immigration, and Labor Laws" Flashcards
Social Security
The Social Security Act provides for old-age (retirement), survivors’, and disability insurance. The act is therefore often referred to as OASDI. Both employers and employees must “contribute” under the Federal Insurance Contributions Act (FICA)Footnote to help pay for benefits that will partially make up for the employees’ loss of income on retirement.
The basis for the employee’s and the employer’s contribution is the employee’s annual wage base—the maximum amount of the employee’s wages that is subject to the tax. The employer withholds the employee’s FICA contribution from the employee’s wages and then matches this contribution.
The annual wage base is adjusted each year as needed to take into account the rising cost of living. In 2013, employers were required to withhold 6.2 percent of each employee’s wages, up to a maximum wage base of $113,700, and to match this contribution.
Retired workers are eligible to receive monthly payments from the Social Security Administration, which administers the Social Security Act. Social Security benefits are fixed by statute but increase automatically with increases in the cost of living.
Medicare
Medicare is a federal government health-insurance program administered by the Social Security Administration for people sixty-five years of age and older and for some under age sixty-five who are disabled. It originally had two parts, one pertaining to hospital costs and the other to nonhospital medical costs, such as visits to physicians’ offices.
Exception- to Employment-at-will Doctrine - Contract Theory
Court have upheld implied employment contracts. If an employee manual creates an implied contractual obligation
Ex. BDI Enterprise’s employment manual and personnel bulletin both state that, as a matter of policy, workers will be dismissed only for good cause. Jing Chin is an employee at BDI. If Chin reasonably expects BDI to follow this policy, a court may find that there is an implied contract based on the terms stated in the manual and bulletin.
Exception- to Employment-at-will Doctrine - Tort Theory
A firing could become a lawsuit in wrongful discharge. Abusive discharge procedures could result in a lawsuit for intentional infliction of emotion distress or defamation. Or under the theory of fraud when an employer made false promises to prospective employees.
Ex. Goldfinch Consulting, Inc., induces Brianna to leave a lucrative job and move to another state by offering her “a long-term job with a thriving business.” In fact, Goldfinch is not only having significant financial problems but is also planning a merger that will result in the elimination of the position offered to Brianna. If she takes the job in reliance on Goldfinch’s representations and is fired shortly thereafter, Brianna may be able to bring an action against the employer for fraud.
Exception- to Employment-at-will Doctrine - base on Public Policy
Employer’s reason for firing the employee violates a fundamental public policy of the jurisdiction. Generally, the courts require that the public policy involved be expressed clearly in the statutory law governing the jurisdiction.
The public-policy exception may apply to an employee who is discharged for whistleblowing—that is, telling government authorities, upper-level managers, or the media that her or his employer is engaged in some unsafe or illegal activity.
Ex. Rebecca Wendeln was the staff coordinator at a nursing home. She discovered that a patient at the home had been improperly moved and had been injured as a result. Wendeln reported the incident to state authorities, as she was required to do by state law. Her supervisor was angry about the report, and Wendeln was fired shortly thereafter. When Wendeln sued, the court held that although she was an employee at will, she was protected in this instance from retaliatory firing because a clear mandate of public policy had been violated.
Wrongful Discharge
Whenever an employer discharges an employee in violation of an employment contract or a statutory law protecting employees, the employee may bring an action forwrongful discharge.
The Davis-Bacon Act
- requires contractors and subcontractors working on federal government construction projects to pay “prevailing wages” to their employees.
Overview from US Dept of Labor website: The Davis-Bacon and Related Acts, apply to contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works. Davis-Bacon Act and Related Act contractors and subcontractors must pay their laborers and mechanics employed under the contract no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area. The Davis-Bacon Act directs the Department of Labor to determine such locally prevailing wage rates. The Davis-Bacon Act applies to contractors and subcontractors performing work on federal or District of Columbia contracts. The Davis-Bacon Act prevailing wage provisions apply to the “Related Acts,” under which federal agencies assist construction projects through grants, loans, loan guarantees, and insurance.
The Walsh-Healey Act
- applies to U.S. government contracts. It requires that a minimum wage, as well as overtime pay at 1.5 times regular pay rates, be paid to employees of manufacturers or suppliers entering into contracts with agencies of the federal government.
Overview from Dept. of Labor Website: The Walsh-Healey Public Contracts Act (PCA), as amended, establishes minimum wage, maximum hours, and safety and health standards for work on contracts in excess of $15,000 for the manufacturing or furnishing of materials, supplies, articles, or equipment to the U.S. government or the District of Columbia. All provisions of the PCA are administered by the Wage and Hour Division except the safety and health requirements, which are administered by the Occupational Safety and Health Administration (OSHA).
The Fair Labor Standards Act (FLSA) (1938)
– Establishes minimum wage, overtime pay, recordkeeping, and youth employment. Applies to all employers engaged in interstate commerce or in producing goods for interstate commerce.
The FLSA, as amended, provides the most comprehensive federal regulation of wages and hours today.
Overview from the Dept. of Labor Website: The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments. Covered nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009. Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek.
Minimum Wages
FLSA set a minimum wage an employee must be paid. If your state has a higher minimum wage, employee entitled to higher wage.
The federal minimum wage for covered nonexempt employees is $7.25 per hour effective July 24, 2009.
If you works for tips while on the job, wage is $2.13 an hour (tips received must equal federal minimum wage)
If employer pays tipped employee federal minimum wage ( $7.25 an hour), employer can take employees tips and make other arrangements for their distribution.
Work week is 40 hours, over time is no less than 1.5 times your regular pay.
Overtime Exception to Overtime
Executive Employees – primary duty is management – no overtime
Administrative Employees – paid a salary – primary duty related to management or employer’s general business operation. The employee’s duty must include the exercise of discretion and independent judgment with respect to matter of significance. – no overtime
Example : Patty Lee Smith was a pharmaceutical sales representative at Johnson and Johnson (J&J). She traveled to ten physicians’ offices a day to promote the benefits of J&J’s drug Concerta. Smith’s work was unsupervised, she controlled her own schedule, and she received a salary of $66,000. When she filed a claim for overtime pay, the court held that she was an administrative employee and therefore exempt from the FLSA’s overtime provisions.
Child Labor
Fair Labor Standards Act (FLSA)
Fair Labor Standards Act (FLSA) limits child labor. Child ages dictates type of allowed employment.
Under 14 – baby sitting, newspaper delivery, Actor, work for family business, agriculture
14 -15 – retail and food service, lifeguard, limited hours of work
16-17 – Any job that is not hazardous, unlimited hours
Federal youth minimum wage - The law allows employers to pay employees under 20 years of age a lower wage for a limited period – 90 calendar days,notworkdays – after they are first employed. Any wage rate above $4.25 an hour may be paid to eligible workers during this 90-day period.
The Worker Adjustment and Retraining Notification Act – (WARN Act)
Layoffs
Requiring employers with 100 or more employees to provide at least 60 calendar days advance written notice of a plant closing and mass layoff affecting 50 or more employees at a single site of employment.
States may also have some laws that are stricter than the WARN Act.
Family and Medical Leave Act (1993)
The FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. Eligible employees are entitled to:
Twelve work weeks of leave in a 12-month period for:
- the birth of a child and to care for the newborn child within one year of birth;
- the placement with the employee of a child for adoption or foster care and to care for the newly placed child within one year of placement;
- to care for the employee’s spouse, child, or parent who has a serious health condition;
- a serious health condition that makes the employee unable to perform the essential functions of his or her job;
- any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty;”or
Military caregiver leave - Twenty-six work weeks of leave during a single 12-month period to care for a covered service member with a serious injury or illness if the eligible employee is the service member’s spouse, son, daughter, parent, or next of kin (military caregiver leave).
BENEFIT: employer must continue the worker’s heat-care coverage on the same terms as when employed and must restored to their original position or comparable position upon return.
Worker Health and Safety
Occupational Safety and Health Act
The Occupational Safety and Health Act -Congress passed the Occupational and Safety Health Act to ensure worker and workplace safety. Their goal was to make sure employers provide their workers a place of employment free from recognized hazards to safety and health, such as exposure to toxic chemicals, excessive noise levels, mechanical dangers, heat or cold stress, or unsanitary conditions.
Administered by Occupational Safety and Health Administration(OSHA). OSHA is a division of the U.S. Department of Labor that oversees the administration of the Act and enforces standards in all 50 states.
Must post notices in workplace
Employers with more than 11 employees must keep injury records
If an employee dies or three or more employees are hospitalized because of work related injury. Must report to OSHA within 8 hours.
OSHA compliance officers have right to inspect any facility covered by this act.
State Workers’ Compensation Law
Workers’ compensation is a form of insurance providing wage replacement and medical benefitsto employees injured in thecourse of employmentin exchange for mandatory relinquishment of the employee’s right to sue his or her employer fornegligence.
Every state has its own workers’ compensation laws
Not everyone is covered – typically excludes domestic workers, agricultural workers, temporary employees (varies by state)
Workers’ Compensation Requirements
In general, the only requirements to recover benefits under state workers’ compensation laws are:
-The existence of an employment relationship.
-An accidental injury that occurred on the job or in the course of employment, regardless of fault. (An injury that occurs while an employee is commuting to or from work usually is not covered because it did not occur on the job or in the course of employment.)
An injured employee must notify her or his employer promptly (usually within thirty days of the accident). Generally, an employee must also file a workers’ compensation claim within a certain period (sixty days to two years) from the time the injury is first noticed, rather than from the time of the accident.
Income Security
Program to protect employees from financial impact of retirement, disability, death, hospitalization, and unemployment
Social Security
tax rate is?
Social Security Act provides old age (retirement) insurance - OASDI (Old Age, Survivor, Disability Insurance) (1935)
The Federal Insurance Contributions Act(FICA) creates a payroll tax requiring a deduction from the paychecks of employees as well as a contribution from employers to fund the Social Security and Medicare programs
The Social Security tax rate is 6.2%. The employer pays a tax equal to the amounts withheld from employee earnings.
The annual base adjusts each year to take into account cost of living increases.
Social Security has a cap on contributions - The Social Security Administration (SSA)announcedthat the maximum amount of wages subject to the old age, survivors, and disability insurance (OASDI) tax will increase to $132,900 for 2019. The OASDI tax rate is 6.2%, so an employee with wages up to or above the maximum in 2019 would pay $8,239.80 in tax and the employer would pay an equal amount. Self-employed individuals pay tax at a 12.4% rate up to the limit. The 2018 wage base is $128,400, for a $7,960.80 maximum amount of OASDI tax.
Medicare
tax rate is?
Medicare - federal government health-insurance administer by Social Security Administration. It is for people 65 years of age or older. Or disabled people under 65.
Originally had two parts, Part A - hospital costs and Part B -other non-hospital medical costs. Can now get Part D – prescription drugs.
Medicare funded with income tax contributions (like SS)
Medicare tax rate is 1.45%. The employer pays a tax equal to the amounts withheld from employee earnings.
Medicare has no cap on contributions
Private Pension Plan
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans. – Employer not required to provide pension plan.
Pension Benefit Guaranty Corporation (PBGC) is a federal agency created by (ERISA) to protect pension benefits in private-sector defined benefit plans - the kind thattypicallypay a set monthly amount at retirement. Pensions pay insurance premium to the corporation. If a plan ends (plan termination) without sufficient money to pay all benefits, PBGC’s insurance program will pay the benefit provided by a pension plan up to the limits set by law.
Vesting – Employees legal right to receive pension benefits. Typically employee right to the money – any funds employee contributes vest immediately. Employer funds typically vest after 5 years of employment
