Chapter 8 Section 4: Employer-Employee Law Flashcards
What does FICA do?
What is it?
It provides workers and their dependents with benefits in case of death, disability, or retirement
It stands for the Federal Insurance Contribution Act
Who must participate in FICA?
Almost everyone
Who pays for FICA?
The employer and the employee
What does the employer pay for FICA?
They have to match the employee’s contribution
If they voluntarily pay the employee’s share it’s a deduction for the employer and taxable income to the employee
What does the employee pay for FICA?
They are taxed on gross wages (earned income)
What do self-employed people pay for FICA?
Both halves, on net income.
What does the employer deduct for FICA?
They deduct their contribution as an ordinary business expense
What do self-employed people deduct for FICA?
1/2 is deductible in arriving at AGI
Can you opt out of social security?
Nope. Thanks, Obama.
What is FUTA?
Federal Unemployment Tax Act
State-run system of insurance to provide income to workers who have lost their jobs
Who participates in FUTA?
Employers who have quarterly payrolls over $1,500 or who employ at least one person for 20 weeks in a year
Who pays for FUTA?
Employers only. They get a deduction as an ordinary business expense
For FICA and FUTA, are benefits limited to contributions?
No
What is worker’s comp?
State-run programs to enable employees to recover from injuries incurred while on the job.
Who is liable under worker’s comp?
What’s the exception?
The employers are strictly liable, regardless of fault. So as long as it was in the scope of employment, it can be due to negligence. The exception is fighting, intoxication, and self-inflicted wounds.
Under worker’s comp, can workers sue their employers?
What’s the exception?
Generally not, the recovery is limited to worker’s comp benefits.
You can sue if your employer intentionally injured you and you can sue third parties to receive worker’s comp.
Who participates in worker’s comp?
Most employers, except for a few
Who pays for worker’s comp?
Employers - they’re buying insurance, and it is compulsory. It’s also deductible
What does Title VII cover?
All discrimination except for age
Who hears complaints under Title VII?
EEOC - Equal Employment Opportunity Commission
What are the three defenses to Title VII?
Bona fide seniority system
Merit
Bona fide occupational qualification
What does the Equal Pay Act cover?
Equal pay based on gender
What is the age discrimination act?
Prohibits discriminating against people 40 or older, if you have over 20 employees
What’s the exception to the Age Discrimination Act?
Public Safety
What’s the ADA?
Americans with Disabilities Act - prohibits discriminating against the disabled and requires publicly accessible buildings to be wheelchair accessible
What is OSHA?
Who must comply?
Occupational Safety and Health Act
All businesses affecting interstate commerce
What does OSHA do?
Sets standards - doesn’t develop equipment
They can come in without warning or a warrant to do safety inspections.
What penalties are available for OSHA noncompliance?
Civil and criminal
What does the Fair Labor Standards Act cover?
Wages and Hours - sets minimum wage, overtime rate, and restrictions on child labor
What’s the youngest a kid can work?
What’s the exception?
14
Paper route or child actor
Who is excluded from the Fair Labor Standards Act?
Newspaper deliverers - minimum wage, overtime, equal pay, and child labor
Cab drivers - overtime, not exempt from minimum wage
White Collar - exempt from minimum wage and ovetime
What’s the National Labor Relations Act?
AKA Wagner act - adopted to give workers the right to bargain collectively for wages and other terms of employment
What does the NLRA prohibit employers from doing?
Interfering with attempts to unionize, discriminating against those who do
What’s the Taft-Hartley Act?
The Labor Management Relations Act - prohibits labor unions from charging excessive dues, forcing employers to pay for unperformed services, or calling an improper strike
What is ERISA?
It covers pensions and retirement plans.
What is COBRA?
It is health insurance for some people even after they lose their jobs.
What employers need to comply with COBRA?
Only employers with 20 or more employees
What’s the coverage period for COBRA?
18 months
