Legal Issues

1. Legal Issues 12/30/04

2. $4 million in overtime awarded to VPs at Bank of America in Seattle • Starbucks settles $18 million manager’s suit on overtime in California • Farmers claim adjusters award $90 for overtime • RadioShack pays $30 million to settle store manager’s

3. Retail giant Walmart raided for hiring illegal immigrants • Gender discrimination suit filed against Walmart. • Purportedly fails to promote women and minorities in same ratios as white males

4. Fair Labor Standards Act • Primarily covers firms which are engaged in interstate commerce in the handling, moving or selling of goods • Provides for minimum wage ($5.15) • 25 cents in 1938 • $1.68 in 1968 • $2.65 in 1978 • $5.15 in 1997 • Defines overtime for nonexempt jobs • Delineates protection for child labor.

5. State of Washington • Provides for minimum wage ($7.16) • Highest in the nation • Alaska is $7.15 • Connecticut is $7.10 • Oregon is $7.05 • Adjusted to keep up with inflation • Tied to consumer price index.

6. FLSA Overtime Provisions • Must be paid at least 1.5 times their regular rate of pay for all hours worked over 40 during a single week. • Work week week is any period of seven consecutive days. • Paid for overtime whether it was worked at home or in the office. • Paid overtime even if you did not ask the person to work it and, in fact, even if you asked him or her not work it. • There are some exceptions for certain medical jobs, firefighters where it is on a two week average.

7. Exemption: Professional • Advanced Training Or • Creative, Original Work • Exercise of Discretion • Intellectual • Nonstandardized • >20% of work hours spent on other tasks

8. Exemption: Managerial • Key function is management of the enterprise or a customarily recognized department or subdivision. • Supervises 2 or more employees (80 hours) • Has authority or can recommend hiring and firing • Customarily and regularly exercise discretion powers. • Devotes no more than 20 percent (40 percent if employed in a retail or service establishment) to other activities

9. Exemption: Administrator • Responsible office or non manual work directly related to management policies or general business operations. • Administer academic or training programs for educational establishment. • Exercise discretion and independent judgment as distinguished from using skills and following procedures. • Must have authority to make important decisions.

10. Overtime Is NOT Due When: • Paid on a commission basis as long AND as pay at least 1.5 times minimum wage • Time spent traveling from their homes or changing clothes and washing before or after work. • Travels during normal working hours • When an employee works an extrashift for another employees at their own option • Up to 10 hours per week for remedial educationclasses (like reading).

11. Child Labor Standards Dictates the hours and conditions under which children may work. • Age 18 and over any job whether hazardous or not. Unlimited hours. • Age 16 -17 non hazardous, unlimited hour • Age 14-15 non school hours; 3 hours on school days, 18 hours/ week, 8 hours/non school day;begin no earlier than 7 a.m. nor later than 7 p.m. except in the summer. • Age 12-13 outside school hours. Parents permission. • Age 12 and under. Farmwork, outside of school hours, parents permission.

12. FLSA Proposed Changes • All workers earning less than $22,100 must receive overtime • Exemptions include • Executives • Administrative • Learned Professionals • Creative Professionals • Any worker making $65,000 or more in one of the above categories is automatically exempt • Computer employees and outside sales workers generally are exempt • Qualifies 1.3 million low wage managers for overtime • Takes overtime away from estimated 640,000 white collar workers

13. FLSA Proposed Changes • Executives • Manage operations • Direct 2 or more workers • Authority to hire and fire • Administrative • Office or nonmanual work related to general business operations • Hold a position of respnsibility defined as work of substantial importance or high level of skill or training • Learned professionals • Office or nonmanual work requiring knowledge of an advance degree in a field of science or learning but also gained through the military • Creative professionals • Invention, imagination, originality or talen in recognized artistic field.

14. Equal Pay Act

15. Equal Pay Act

16. Equal Pay Act • Prohibits discrimination between employees on the basis of sex for employees performing substantially equal work. • Skill • Effort • Responsibility • Working Conditions • Determined through Job Analysis and Job Evaluation

17. Equal Pay Act Exemptions • Seniority systems • Merit Pay Systems • Systems that measure earnings or quality of work • Factors Other than Sex

18. Civil Rights Act of 1964 To fail or refuse to hire or discharge any individual with respect to compensation, terms, conditions or privileges or employment due to the individual's race, color, religion, sex or national origin or To limit, segregate or classify employees or applicants in any way which would deprive the individual of employment opportunities.

19. Shifting Burden Of Proof Model How Do You Prove Discrimination? Burden on Defendant Valid Selection Device BFOQ Business Necessity Affirmative Action Burden on Plaintiff Is There a Better, Less Discriminatory Selection Device? Burden On Plaintiff Disparate Impact Disparate Treatment

20. Disparate Treatment • He or She Belongs to a Protected Group • He or she was rejected but was qualified • The position remained open to applicants • Employee must prove reasons for treatment was pretext for discrimination • Prove differential Treatment • Prove Intentional Discrimination • Employer Triesto articulate a sufficient Reason for Differential Treatment

21. Disparate Impact Employee Must Prove • Prima facie discrimination • Show Selection Ratios Different If Proven, Burden Shifts to Employer

22. Defenses Against Disparate Impact • Bona Fide Occupation Qualification. (BFOQ) rejects applicants on the basis of a particular characteristic. • Seniority System. If intent and outcome is not necessarily discriminatory • Business Necessity. When the essence of the business operation is undermined by not hiring members of a protected group. • Job Relatedness Criteria. Validity is established through proving there is a relationship between the criterion (test) and actual job performance. • Affirmative Action Program. Used to rectify past discrimination may used as a defense.

23. Questionable Criteria • Educational requirements --- particularly high school diploma • Height and weight requirements. • Experience requirements. • Physical strength test. • Arrest records. • Credit record requirements. • Marital Status. • Less than honorable discharges. • Promotion based on supervisory recommendation. Favors white males

24. Arrest Records in Washington State • Arrest records. Employer who asks about arrest must ask whether charges are pending, have been dismissed or lead to conviction • Convictions. Must notify employee within 30 days of receiving conviction record and must allow employee to examine it. • Can only make decision if conviction is less than 10 years old and crime involved behavior that would adversely affect job performance • Rights of applicant. If conviction record is cleared or vacated may answer question as though conviction never occurred. A person convicted of a felony can not be refused an occupational license unless the conviction is less than 10 years old and related to job duties • Right of employer. Entitled to obtain complete criminal record information for positions that • Require bonding or • Have access to trade secrets • Proprietary business information • Money

25. Problematic Behavior Regarding Age • Like sex stereotypes, age stereotypes are relatively common in the work place. • Avoid references to age during the interview. • Don't make remarks suggesting that an older applicant is "over qualified". Such statements can be viewed as a subterfuge for age discrimination.

26. Problematic Interviewer Behavior Regarding Race • Don't comment or joke about a candidate's race. • Most people are sensitized to the need to avoid race-related statements.

27. Problematic Behavior Regarding Sex • Problems often surround male interviewers and female candidates. • Avoid inappropriate language (“honey”, “girl”). • Paternalistic behaviors (pats on the back, arm around the shoulder ). • Don't ask men and women different questions.

28. Sexual Harassment Guidelines • Assumes that sexual harassment is a condition of employment if one gender is exposed to it more frequently than the other. • Two types of Harassment • Overt as a condition of employment • Hostile Environment • An organization may be held liable for sexual harassment, even if they have no knowledge of the harassment, or it is conducted by one of its agents.

29. Protections: • Develop a specific written policy against sexual harassment • Express strong disapproval of sexual harassment • Conducting training to sensitize managers • Establish a specific grievance procedure • Thoroughly investigate claims • Discipline anyone found guilty

30. Americans With Disabilities Act Discrimination against qualified individuals with disabilities in the recruiting, application and hiring processes as well as in the terms and conditions of employment, including promotion and training procedures. Not discriminating includes providing accessibility to facilities

31. ADA Requirements: • Reasonable accommodation of known disabilities to perform essential functions of the job • Case by case determination • No undue hardship • Too costly • Too extensive • Too substantial • Too disruptive • Fundamentally alters the nature of the business.

32. ADA Requirements: • Job Analysis to determine essential job functions • Access to testing, hiring, training and on the job facilities • Posting of notices so visually impaired can read them. • Proof of job relatedness of physical or mental requirement which eliminates a disabled individual from an applicant pool. • Accommodation of former drug or alcohol users. Does not protect current users of illegal drugs. • Allows for drug and alcohol testing

33. EEOC Interpretive Guidelines for Essential Job Functions Under the American’s with Disabilities Act • The reason the position exists is to perform the function. • The function is essential or possibly essential. • Whether a particular job function is essential is a determination that must be made on a case-by-case basis and should be addressed during job analysis. Any job functions that are not essential are determined to be marginal. Marginal job functions could be traded to another position or not done at all.

34. Disability Concerns During the interview, questions can not refer to a disability. • Unacceptable Question: • Given that you cancelled your initial interview due to your dialysis appointment, how can we expect you to show up for work? • Acceptable Question: • Attendance is a requirement for this job. How has your attendance record been at other jobs?

35. Independent Contractors Hiring an independent contractor implies you are purchasing a product, an outcome. "To the extent you retain the right to control the means by which work is done, (the worker) looks more and more like an employee,” Howard Simon, Landels, Ripley & Diamond LLP in San Francisco,

36. Considerations:Independent Contractor Status • Behavioral Control • Instructions • Training • Financial Control • Unreimbursed expenses • Paid by the job • Services available to general public • Ability to make a profit or loss • Type of Relationship • Signed contract • Benefits • Degree of permanency & tenure of relationship

37. Tips to Insure Independence • Firm does not exercise direct control (hours, facilities, products) He sets his own hours of work • Does not receive training from your firm • May have other customers for whom she does contract work • Uses own tools and equipment • Bills you for services rendered • Uses his own tools and equipment • Can’t be fired unless terms of contract are not met

38. Immigration Act of 1990 • Revamps priority system of business immigration. Increases the number of employment sponsored visas allotments from 54,000 to 140,000 per year and creates five business preference categories.

39. Priority Workers: • Professionals with advances degrees and persons with exceptional ability (40,000 visas per year). • Professionals, skilled workers and other workers (40,000 per year). • Must have a bachelor's degree for a professional. • At least two years of training or experience. • Executives and managers of Multinational Companies • Firm must make investments in the U.S. of $1 million and employing 10 or more employees • Special immigrants (10,000 visas per year). • Religious workers

40. 1970 Occupational Health And Safety Act • Focus on the elimination of recognized hazards in the work place • Requires worker training • Covers virtually every private sector place of employment • Authorizes entry into businesses to inspect with search warrant. • Has the power to issue citation and penalizes

41. Work Sites Must BeFree From Hazards • Falling Objectives • Chemicals and Odor • Equipment and Machinery • Electrical Wiring • Flying Objectives • Genetic hazards

42. Responses to OSHA • Select employees with greater care. • Genetic screening • Eliminate women who can bear children from hazardous jobs • Performance tests for hazardous jobs. • Use of personality inventories to screen out accident-prone applicants

43. Responses to OSHA • Requires Performance Management. • Train employees to handle hazardous materials • Evaluate supervisors on their unit's safety records. • Evaluate subordinates on their safety records. • Orient ALL employees to safety rules, • Add Incentives for Good Safety Records

44. Hazard Communication Standard of 1986 • Instruction on what standard states • How to determine the presence of chemicals in the work place • How to protect against exposure to chemicals • How to handle chemicals