Module 1 Flashcards
What is Davis-Bacon Act of 1931
When Congress passed the Davis-Bacon Act in 1931, federal labor law as we know it was born.
■ Purpose: protect unionized contractors from competition by nonunionized contractors paying lower wages
■ Coverage: companies with government construction contracts in excess of $2,000
■ Provisions: requires pay scales to be based on “prevailing wages.” Pay is typically interpreted by the government as union equivalent wages and benefits in the construction trade positions.
■ Enforcing agency: U.S. Department of Labor
What is purpose of McNamara-O’Hara Service Contract Act of 1965?
The McNamara-O’Hara Service Contract Act of 1965 is more narrowly focused but also mandates wage scales.
■ Purpose: improve working conditions and pay for employees of government services contractors
■ Coverage: companies with government services contract(s) in excess of $2,500
■ Provisions: requires pay scales to be based on “prevailing wages.” Pay is typically interpreted by the government as union equivalent wages and benefits in the local labor market.
■ Enforcing agency: U.S. Department of Labor
What is the purpose of Executive Order 13658?
Executive Order 13658 was signed on February 12, 2014, establishing a minimum wage for all employees of all federal contractors. Updates are published in the Federal Register at least 90 days in advance of the effective date which is January 1 of each year.
■ Purpose: Establish minimum wage rate for federal contractors, which may be different from the minimum wage under FLSA
■ Coverage: All federal contractors
■ Provisions: Minimum wage for contractors updated annually by Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)
* Applies to all employees working on federal contracts including but not limited to those subject to Davis-Bacon and McNamara-O’Hara Service Contract Acts. Does not apply to employees not working on federal contracts where employer has customers who are not federal contractors.
* Must notify all workers performing on or in connection with a covered contract of the applicable minimum wage rate under the Executive Order – typically via a poster
■ Enforcing agency: Wage and Hour Division of the Department of Labor
What is Purpose of National Labor Relations Act of 1935?
The National Labor Relations Act (NLRA) of 1935 was enacted with the intention of creating a better environment for collective bargaining.
■ Purpose: create a more equitable environment for labor / management dispute resolution
■ Coverage: all employers involved in interstate commerce (except airlines, railroads, agriculture and government)
■ Provisions:
* It guaranteed the right and established a process that employees can use to select or reject third-party representation.
* It established rules for bargaining in good faith.
* It controls against unfair labor practices.
■ Enforcing agency: National Labor Relations Board
* States are, with rare exception, prohibited from regulating the rights and obligations established by the NLRA.
* Neither the federal courts nor the U.S. Department of Labor have jurisdiction in matters concerning the NLRB.
What is Purpose of Sherman Anit-Trust Act of 1890?
The Sherman Antitrust Act of 1890 has its roots in the early industrialization of the United States, when companies that established an industry could monopolize it and eliminate potential competition.
■ Purpose: preserve a competitive business environment – in other words, to remove monopolies
■ Coverage: all employers involved in interstate commerce
■ Provisions: Labor unions have utilized the Sherman Antitrust Act to ensure competitive wage levels through the elimination of anticompetitive price fixing.
■ Enforcing agency: U.S. Department of Labor (on issues related to the workforce)
* Violations of the antitrust laws can have severe consequences. Depending on the facts of the case, the Department of Justice could bring a criminal prosecution against individuals, the company, or both. In addition, if an employee or another private party is injured by an illegal agreement among potential employers, that party could bring a civil lawsuit for treble damages (i.e., three times the damages the party actually suffered).
What was the effect of National Labor Relations Board rulings on employee participation and disclosure at bargaining?
There are two significant cases that resulted in formal decisions from the NLRB that affect compensation. The decisions concern employee participation.
- Electromation Inc. (1992) – Two questions were presented in this case:
●When does an employee committee that was formed to provide input into decisions lose its protection as a communication device and become a labor organization?
●If the employer is using employee problem-solving teams, how much control can the employer exercise before it is determined to be domination or interference?
Situation: The initial position of the Administrative Law Judge (ALJ) was that five employee committees within Electromation Inc., addressing several issues – nonsmoking rules, absenteeism, attendance bonus programs – constituted a labor organization, and that the company unlawfully dominated and interfered with the committees in violation of the NLRA. As a result of the Electromation decision, employers must be careful to establish and enforce boundaries of employment so that employees are not involved in negotiating the terms and conditions of employment.
- Keeler Brass Automotive (1995) reaffirmed the NLRB’s position.
the Department of Labor specifications to determine whether a worker should be classified as an independent contractor or an employee.
What happened in 1917?
■ 1917 – The Supreme Court upheld a state’s right to set work hours and overtime requirements. Work hours were first addressed
What happened in 1937?
■ 1937 – The Supreme Court upheld a state’s right to set minimum wages.
What happened in 1938?
■ 1938 – Only the states were establishing significant labor laws (with the exception of regulations aimed at federal contractors). FLSA was passed.
What happend in 1941?
1941 – The Supreme Court upheld the constitutionality of the 1917 decision, the 1937 decision and the Fair Labor Standards Act (FLSA) of 1938.
What are some NLRB Rulings
■ If an employer contends “ability to pay” when bargaining wage rates, the employer can be required to disclose data fully.
* Employers may be required to supply corporate financial data and external salary survey data that was used to establish the company’s position on competitive salary levels.
■ Rules prohibiting discussion of pay interfere with employees’ right to engage in
concerted activity.
■ Social media is an evolving area. Concerted activity cannot be punished. Employer “bashing” may be grounds for discipline.
What is the Sherman Anti-Trust Acts relation to Compensation?
■ A primary focus of the act is anticompetitive price fixing.
* The argument has been made that employers have done price fixing of wages through open disclosure of information in salary surveys and projections of budget increases.
■ Two compensation cases where “price fixing” wages was the contention.
* Boston Survey Group
– The Federal Reserve Bank of Boston collected data from various survey member companies and distributed the results.
– The union representing office employees contended that the effort of surveying and open disclosure was the employers’ means to price fix the cost of labor.
* Nurses groups in Utah and Connecticut
– These nursing unions took a similar position.
* Technology companies
– The Department of Justice brought three civil enforcement actions against technology companies that entered into “no poach” agreements with competitors.
– In all three cases, the competitors agreed not to cold call each other’s employees.
– In two cases, at least one company also agreed to limit its hiring of employees who currently worked at a competitor
– All three cases ended in consent judgments against the technology companies.
■ Antitrust safety zone
* Federal Trade Commission (FTC) and Department of Justice (DOJ) established “safe harbor” statements under which pay information can be shared without substantial threat of challenge:
– Survey is managed by a third party
– Data provided is more than three months old
– There are at least five providers reporting data and no individual’s data represents more than 25% (on a weighted basis) of any statistic
How are Independent Contractors vs Employees
The DOL uses the Economic Realities Factors Guide to determine whether the worker is economically dependent on the employer or truly in business for him or herself. The IRS uses a more extensive 20-factor test which includes these six factors. Most workers are employees under the FLSA’s broad definitions. The descriptions below clarify the factors for an employee versus an independent contractor.
What are the Economic Realities Factors when it comes to Independent Contractors vs Employees?
The DOL uses the Economic Realities Factors Guide to determine whether the worker is economically dependent on the employer or truly in business for him or herself. The IRS uses a more extensive
20-factor test which includes these six factors. Most workers are employees under the FLSA’s broad definitions. The descriptions below clarify the factors for an employee versus an independent contractor.
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