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Chapter 15

Chapter 15. Important Statutes in Employer-Employee Relations . Statutes Affecting Employer-Employee Relations. 1900 – Worker’s compensation 1935 – Social Security Act 1938 – Fair Labor Standards Act 1963 – Equal Pay Act 1970 – OSHA 1974 – ERISA 1985 – COBRA

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Chapter 15

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  1. Chapter 15 Important Statutes in Employer-Employee Relations

  2. Statutes Affecting Employer-Employee Relations 1900 – Worker’s compensation 1935 – Social Security Act 1938 – Fair Labor Standards Act 1963 – Equal Pay Act 1970 – OSHA 1974 – ERISA 1985 – COBRA 1993 – Family and Medical Leave Act

  3. Workers’ Compensation • Purpose is to pay workers or dependents for work-related injuries, diseases, or death • Common law fault • Contributory negligence • Assumption of risk • Fellow servant rule

  4. Shift to Workers’ Compensation • Common law rules were too harsh • Employer is now insurer of work-related risks such as injuries, diseases, and deaths • Represents mechanism for imposing human cost on employers

  5. Features of Workers’ Compensation Laws • State laws • Work-related injury • Back injury most common • Certain but limited recovery • Exclusivity of remedy

  6. Features of Workers’ Compensation Laws • Nonapplication to independent contractors • Funding • Administration • Employees covered • Mandatory or elective

  7. Occupational Safetyand Health Act (OSHA) • Passed in 1970 • Objectives • Keep workplace safe and healthy for employees • Preserve human resources

  8. Occupational Safetyand Health Act • Administration and records • Enforcement records • Research records • Job-related injury and accident records • Records of job hazards • OSHA standards • Regulations: interim, permanent, and temporary emergency

  9. Occupational Safetyand Health Act • Steps in OSHA’s operation • OSH Act passed • OSHA issues regulations • OSHA inspectors conduct visits • Citations are issued for violations • Administrative law judge hearing • Appeal to OSH Review Commission • Appeal to U.S. Court of Appeals • Possible appeal to U.S. Supreme Court

  10. Occupational Safetyand Health Act • Criticisms of OSHA • Vague regulations • Detailed regulations about trivial matters • Cost to businesses for compliance • Adversarial attitudes of some administrators • Triviality that may actually hurt real safety concerns

  11. Fair Labor Standards Act • Purpose was to eliminate labor conditions that did not allow employees to maintain minimum living standards • Main provisions • Direct employers to pay their workers minimum wages • Establishes equal pay, record keeping, and child labor standards

  12. Covered WorkersUnder FLSA • Laundries or dry cleaners • Constructions firms • Hospitals • School • Certain retail or service businesses • Businesses having certain annual gross sales

  13. FLSA Exemptions • Executive, administrative, and professional employees • Employees of certain individually owned small retail or service businesses • Employees of certain seasonal amusement or recreational businesses • Farm workers • Casual babysitters or sitters of the elderly

  14. FLSA • Enforcement • Wage and Hour Division of the U.S. Department of Labor • Sanctions • Civil and criminal consequences for violation • Recovery of back wages

  15. Unemployment Compensation • Where does money come from • Which employers are covered • Which employees are covered • Amount of benefits • Experience rating • Exhaustion of unemployment benefits

  16. Social Security • Social Security Act passed in 1935 and covered only workers in industry and commerce then • Act provided for administration by Social Security Administration • Originally gave nothing to workers’ dependents or disabled workers

  17. Social Security • Types of benefits • Retirement benefits • Disability and survivors’ benefits • Factors influencing size of retirement benefits • Average yearly earnings covered by Social Security • Age at retirement • Number of dependents

  18. Social Security Features • Benefits are not subject to state or local income taxes • Social Security payments may not be garnished by the beneficiary’s creditors • Social Security benefits increase if the cost of living increases • Persons must survive to get Social Security retirement benefits

  19. Regulation ofEmployee Pensions • Separate from Social Security • Employer contributions • Coverage requirement • Defined contributions • Defined benefit plans

  20. Employment Retirement Income Security Act of 1974 • Fiduciary duties • Creates fiduciary duty for plan managers and advisors • Requires records and reports • Sets plan investment restrictions • Creates federal corporation to insure employee benefits • Requires vesting of employer and employee contributions • Places funding requirements on certain plans

  21. Consolidated Omnibus Budget Reconciliation Act • To provide temporary health insurance for workers who are terminated from their jobs • No coverage if the worker is dismissed for gross misconduct • Does not require employers to provide health insurance for workers

  22. Recap – Terms to Know • Workers’ Compensation • OSHA • Fair Labor Standard Act • Equal Pay Act • Unemployment Compensation • Social Security • ERISA • COBRA

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