Chapter 19 Management of Employee Welfare

1. MARIANNE M. JENNINGS Its Legal, Ethical, and Global Environment 7th Ed. Chapter 19Management of Employee Welfare

2. Wages and Hours Protection • Fair Labor Standards Act (FLSA). • Often called “the minimum wage law.” • All covered employees must be paid minimum wage. • 1 1/2 time pay for overtime. • Overtime pay for anything over 40 hours/week.

3. FLSA • FLSA: All businesses covered that affect Interstate Commerce. • Exemptions: • Independent contractors. • Agriculture, fishing, and domestic service. • White-collar management. • Executive, administrative, and professional people. • State employees? SeeAlden v. Maine 98-436 (1999).

4. FLSA • Enforcement of FLSA. • Can begin by complaint filed with U.S. Labor Department. • Employer can seek interpretation from Department of Labor. • Labor Department can initiate its own investigation.

5. FLSA • Violations of FLSA. • Corporation is liable. • Officers can be held individually liable. • Fines - $10,000 first conviction. • $10,000 and or six months for second violation. • Employees cannot be fired for reporting violations.

6. FLSA • Child labor protections • Age 18 and over—any jobs. • 16-17—any non-hazardous job, unlimited hours (hazardous—mining, logging, roofing, excavation). • 14-15—any non-hazardous, non-manufacturing, and non-mining job during non-school hours; limits on hours. • Record keeping. • Employers must keep records of hours and wages • Fines for not doing so.

7. Equal Pay Act • Illegal to pay different wages to men and women doing the same jobs. • Equal Pay Act is not a comparable worth statute. • Comparable worth requires equal pay for jobs that require equal skill, effort, and responsibility. • Comparable worth changes the free marketplace concept that we as a society have adopted. • Merit and seniority systems are exceptions.

8. OSHA • Occupational Health and Safety Act (OSHA): • Passed to ensure workplace safety precautions. • OSHA was agency created to enforce it. • Employers covered—all with one or more employees. • Also created Occupational Safety and Health Review Commission (OSHRC) and the National Institute for Occupational Health and Safety (NIOSH).

9. OSHA • OSHA coverage and duties: • Familiarize themselves with OSHA’s requirements. • Post employee rights. • Require protective gear. • Keep records of injuries. • Report fatalities and hazards causing them. • Post OSHA citations.

10. OSHA • OSHA responsibilities: • Promulgate workplace safety regulations. • Can award variances for certain employers. • Inspections.

11. OSHA • Case 19.1Whirlpool Corp. v. Marshall(1980). • What type of remedy does the secretary of labor want? • Does the decision allow employees to walk off the job when there is a workplace hazard?

12. OSHA • OSHA penalties: • Fine and imprisonment escalate with seriousness of violation. • Many employers negotiate a consent decree after a citation. • If no consent decree, there is a hearing before an administrative law judge (ALJ) • ALJ makes recommendations and OSHRC decides. • Can then be appealed to a court.

13. OSHA • Employee rights under OSHA: • Can accompany an OSHA inspector. • Can file complaints. • Right to notice if employer applies for variance.

14. OSHA • OSHA and ongoing controversy: • Businesses tend to be vocal about OSHA because of numerous and complex regulations. • Consumers and others tend to be vocal for OSHA’s lack of quick response to safety concerns in the workplace. • Chemical hazards warning for long-term exposure of employees. • Controversial proposals for AIDS health care workers.

15. OSHA • State OSHA programs: • States share responsibility for safety with Feds. • Secretary of Labor must approve state’s plan. • Employment Impairment and Testing Issues: • If safety is an issue, U.S. Supreme Court has authorized testing by government employer without warrant and without probable cause • Private employers generally free to require drug testing.

16. Pensions, Retirement, & Social Security • Social Security Act of 1935. • Every employee contributes to Federal Insurance Contributions Act (FICA). • Benefits under Social Security depend on work and salary range.

17. Pensions, Retirement, & Social Security • Private Retirement Plans: Employment Retirement Income Security Act (ERISA). • Applies to employers in interstate commerce. • Applies to medical, retirement, or deferred income plan. • Requirements: • Must give employees an annual report. • Must disclose loans made from the fund. • ERISA does not require pension plans, only regulates employers who offer them.

18. Pensions, Retirement, & Social Security • Private Retirement Plans: Employment Retirement Income Security Act (ERISA). • ERISA Employee Rights: Employees get vesting rights in their pensions. • FASB 106 Retirees and Pensions: Requires corporation to expense cost of benefits for retired employees.

19. Pensions, Retirement, & Social Security • Unemployment Compensation. • State-administered program. • Employers pay FUTA taxes and states. administer programs. • Amount is controlled by wages and time working. • Requirements: • Must have been involuntarily terminated. • Must be able and available for work. • Must be seeking employment.

20. Pensions, Retirement, & Social Security • Case 19.2Wimberly v. Labor and Industrial Relations Commission of Missouri(1987) • Is the Missouri statute valid? • What implications does the decision carry for maternity leaves?

21. Workers’ Compensation • Principles: • Employees injured in scope of employment are covered. • Fault is immaterial. • Independent contractors are not covered. • Benefits include expenses, lost wages, and injury compensation.

22. Workers’ Compensation • Principles: • Employees do not have right of common law suit. • Third parties can be sued to indemnify employers. • Administrative agency handles program. • Every employer must carry insurance or be self-insured.

23. Workers’ Compensation • Types of Employee Injuries. • Primarily accidental. • Definition has been expanded. • Back problems from lifting. • Medical problems—heart attacks and nervous breakdowns. • Stress. • Co-worker injury: • Covered if arises within scope of employment. • Issue of rape is a problem; employer can be sued for the failure to screen employees adequately.

24. Workers’ Compensation • Case 19.3Gacioch v. Stroh Brewery Co.(1990). • In this case, was alcoholism a disease that originated in the workplace? • What additional factual information is needed to resolve the case?

25. Workers’ Compensation • Disability Benefits: • Partial disability—listed on schedule by rate. • Example: 50 percent of wages. • Total disability—generally 2/3 of salary. • Unscheduled injuries are determined by board. • Death benefits paid to family. • Forfeiture of Right to Suit: • The majority of states require employees to forfeit all other lawsuit rights in exchange for workers' compensation benefits.

26. Workers’ Compensation • Third-Party Suits: • Can sue product manufacturers, other third parties, but recovery must first go to reimburse employer. • Administrative Agency. • Each state has an agency for administration of benefits and insurance. • Insurance: Employers must be financially responsible.

27. Workers’ Compensation • Problems in Workers’ Compensation Systems: • Extent of injuries covered. • Fraud. • Nature of injuries changing from manufacturing injuries to stress, heart disease, and repetitive motion. • Long-term hazards. • Relationship between Americans with Disability Act and workers’ compensation.

28. Labor Unions • History and Development of Labor Legislation. • Courts were very harsh at common law. • Treated unions as conspiracies and allowed them to be prosecuted for such action. • Strikes were perceived as intimidation techniques. • Railway Labor Act of 1926. • First federal legislation, but limited to railroad industry. • Allowed railroad employees to unionize. • Still in effect today with addition of airline employees.

29. Labor Unions • Norris-LaGuardia Act of 1932 (Anti-Injunction Act). • Stopped federal courts from issuing injunctions to stop union strikes. • Wagner Act—National Labor Relations Act (NLRA) of 1935. • Gave employees the right to unionize. • Prohibited employers from firing or discriminating against union members. • Established NLRB.

30. Labor Unions • Taft-Hartley Act—Labor Management Relations Act of 1947. • Lists unfair labor practices for unions. • Addresses secondary boycotts. • Provides president with authority to have pre-strike cooling-off period when public health and safety are at issue; has been used in coal and transportation strikes.

31. Labor Unions • Landrum-Griffin Act—Labor Management Reporting and Disclosure Act of 1959. • Regulates union officials. • Gives union members a bill of rights. • Establishes penalties for misconduct.

32. Labor Unions • Union Organizing Efforts. • Selecting a union: • Petition for union representation filed. • Election. • Certified union. • Once selected, union represents all employees.

33. Union Certification

34. Labor Unions • Case 19.4Pattern Makers’ League of North America, AFL-CIO v. NLRB(1985). • What union rule was at issue? • Must a union worker strike if she wants to work? • Does the rule affect union membership?

35. Labor Unions • Union Contract Negotiations: • Must bargain in good faith—8(d) of NLRA. • Try to get employer contract—collective bargaining agreement. • Mandatory or compulsory subject matters: “wage hours and other terms and conditions of employment”. • Wages • Pay days • Hours • Insurance • Overtime • Pensions • Vacation • Seniority • Leaves • Two-tier wage structure

36. Labor Unions • Union Contract Negotiations: • Permissive subjects for collective bargaining • Strike roles. • Not unfair to refuse to bargain it. • Cannot bargain away statutory rights. • Example: Cannot agree to have a closed shop (refusing to hire nonunion people). • Failure to bargain in good faith. • Constitutes an unfair labor practice. • Can be the basis of a charge and complaint.

37. Labor Unions • Union “Concerted Activities”—Economic Pressure. • NLRA gives union right to engage in concerted activities. • Picketing—legal. • Boycotts: • Primary—legal. • Secondary—some restrictions. • Advertising.

38. Labor Unions • Unfair Employee Practices: • Hot cargo agreements. • Generally prohibited. • Restriction on handling products of nonunion employers. • Legal in clothing/construction industry. • Slowdown. • Not a strike or stoppage. • Employees refuse to do certain work or use certain equipment.

39. Labor Unions • Union “Concerted Activities”—Economic Pressure. • The strike—legal economic weapon. • The shareholders. • Unions have contacted shareholders for clout. • Allowed shareholders to bring public attention to the issues.

40. Labor Unions • Case 19.5Aroostook County Regional Ophthalmology Center v. NLRB(1996). • Are the employees engaged in concerted activity as they discuss their schedule issues in the medical office? • Were the conditions for rehiring valid?

41. Labor Unions • Union “Concerted Activities”—Economic Pressure. • Secondary boycotts: • Illegal when coercion involved. • Third party involved. • Featherbedding: • Payment for work not actually done. • Unfair labor practice.

42. Labor Unions • Employer Rights: • Freedom of Speech. • So long as speech is accurate and not an unfair labor practice. • Right-to-work laws; Prohibit closed shops. • Right to an enforceable collective bargaining agreement.

43. Employer Weapons • Plant Closings. • Congress has passed a plant closing law and many states have same laws. • Laws require notice and time frame before plant is closed. • Designed to eliminate shock to local economy. • Federal law is the Worker Adjustment and Retraining Notification Act of 1988.

44. Employer Weapons • Cannot use temporary closing or send work away (runaway shops) • Plant Flight: management closes plants and outsources work to foreign countries. • Lockout Employer refuses to allow employees to work. • Conferring Benefits OK if not done too close to union election. • Bankruptcy may be used to reject Collective Bargaining Agreement.

45. International Issues • Federal immigration laws require employers to verify employee is a U.S. citizen or has the right to work in the U.S. • “Highly skilled” workers (H-1B Professional) can come and work in high-tech industries. • Labor Management Cooperation Act provides mediation as an alternative.

46. International Issues • The examples of NIKE and Kathie Lee Gifford: • Sweatshop conditions affect consumer perception. • International and domestic pressures. • Stock value drops. • Creation of teams by companies has effect of mixing labor and management.