Chapter 16Chapter 16Selected Employment Selected Employment

Benefits and Benefits and Protections

McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

16-16-22

Learning ObjectivesLearning Objectives List the matters regulated by the Fair Labor

Standards Act

Discuss the requirements of the minimum wage laws and to whom they apply

Explain the Family Medical Leave Act, including to whom it applies and under what circumstances

16-16-33

Learning ObjectivesLearning Objectives Explain contributory negligence, assumption of

risk, and the fellow servant rule, and their roles in the regulation of safety in the workplace, and determine how OSHA impacted this regulatory environment

Set forth what OSHA requires of employers to create a safer workplace and how it is enforced

16-16-44

Learning ObjectivesLearning Objectives Describe the reporting responsibilities of

employers under the OSHA Act

Explain the purposes of ERISA and identify who and what type of entities are covered

Describe the minimum ERISA standards for employee benefit plans

16-16-55

Show me the Money!Show me the Money! Fair Labor Standards Act (FLSA)

Law to regulate pay and hours worked passed in 1938

Set standards for minimum wage

Prohibits pay differentials based solely on gender

Regulates child labor, wages and hours

Requires records on wages and hours

Violations

16-16-66

Show me the Money!Show me the Money! FLSA is administered by the U.S. Department of

Labor’s Wage and Hour Division

States also have wage and hour provisions administered by comparable state agencies

16-16-77

Covered EmployeesCovered Employees Two types of coverage in FLSA

Individual coverage

Enterprise coverage

The law applies to both part-time and full-time employees

Federal, state and local employees are covered

The law also covers domestic service workers

There are exemptions

16-16-88

Minimum WagesMinimum Wages The minimum wage law was established after

Wall Street Crash of 1929

FLSA – employers must pay employees a certain minimum hourly wage

State wage laws may have higher minimums than the federal law

Fair Minimum Wage Act of 2007

Tipped employees – piece-rate vs. hourly rate

16-16-99

Minimum WagesMinimum Wages Not everyone is covered under the statute

Primary exemptions

New FLSA overtime regulations

Businesses required to review their pay levels and jobs

Employees earning up to $23,660 per year ($455/week) are automatically entitled to overtime pay

16-16-1010

Minimum WagesMinimum Wages Executive employees are exempt if they

Manage two or more employees

Have firing, hiring and promotion authority

Employees who earn at least $100,000 per year and perform some executive, professional, or administrative job duties are automatically exempt from overtime provisions

Back wages

16-16-1111

Overtime ProvisionsOvertime Provisions The FLSA

Sets standards for the hours constituting a normal workweek for wage purposes

Sets wage rates for hours worked over and above the normal week

If an employee works over 40 hours, he or she must be paid time and a half for the time worked in excess of 40 hours

16-16-1212

Retaliation and Child Labor LawsRetaliation and Child Labor Laws Retaliation is prohibited

FLSA sets minimum age standards for allowing children to work

Most cannot work before age 16

Age 18 the minimum for hazardous jobs

Certain jobs allowed for children 14-16 that do not interfere with their health, education, or well-being

State child labor laws override federal law

16-16-1313

Family and Medical Leave ActFamily and Medical Leave Act Enacted primarily in response to job retention

after having a child

General provisions

Guarantee job after leave for a birth, an adoption, or care of sick children, spouses, or parents

Applies to employers with 50 or more employees within a 75-mile radius

Employers can require medical confirmation of an illness

Leave is unpaid

16-16-1414

Occupational Safety and Health Act: Occupational Safety and Health Act: Safety at WorkSafety at Work

Each year

5,700 Americans die from workplace injuries

50,000 die from illnesses caused by workplace exposure

4.7 million suffer nonfatal workplace injuries

According to OSHA

OSH Act has helped cut workplace fatalities by more than 60 percent and injury/illness by 40 percent since its enactment

16-16-1515

General ProvisionsGeneral Provisions OSHA requires that an employer provide a safe

workplace

Employer’s defense

Explanation

Contributory negligence

Negligence action based on the injured party’s failure to exercise reasonable care

for her or his own safety

Assumption of risk Injured party voluntarily exposed herself or himself to a known danger created by

the other party’s negligence

Fellow servant rule Injury occurred on the job and was caused by the negligence of another

employee

16-16-1616

General ProvisionsGeneral Provisions No-Fault: Workers injured on the job are entitled

to recover for their injuries without having to prove who is at fault

injured workers are limited in their financial recovery

16-16-1717

General ProvisionsGeneral Provisions Section 5(a)

The employer must comply with all the safety and health standards dictated by the Department of Labor

The employer must furnish a workplace fee of hazards

OSHA creates certain specific regulatory standards of safety

16-16-1818

General ProvisionsGeneral Provisions OSHA conducts routine inspections in certain

high-risk industries

Penalties and “abatement orders” are assessed in connection with an inspection officer’s report

Employers covered by the Act must maintain records for OSHA compliance

Employees must be informed of their OSHA rights by their employer

16-16-1919

Procedure for EnforcementProcedure for Enforcement Responsibility for enforcing the acts rests with

OSHA under the auspices of the Department of Labor

Occupational Safety and Health Review Commission

Willful violation

Increase in fines

Definition of “willful”

16-16-2020

Specific RegulationsSpecific Regulations Physical layout of the worksite

Training

Medical examinations

Setting standards

Voluntary compliance programs

Emergency temporary standards

Continual-training requirement

16-16-2121

General Duty ClauseGeneral Duty Clause Employer requirement – A place of employment

free from recognized hazards that cause or are likely to cause death or serious physical harm to the employee

Instances when employer is not held responsible

Recklessness

Safety requirement is not economically feasible

Greater hazard defense

16-16-2222

Other ProvisionsOther Provisions Intentional Acts

Compensatory and punitive damages

Violence in the workplace

“Zero tolerance” policy

16-16-2323

Other ProvisionsOther Provisions Bullying

Legal liability and higher worker compensation costs if left uncontrolled

Retaliation

OSH Act – Prohibits retaliation against whistleblowers

16-16-2424

Will It Be There When I Retire?Will It Be There When I Retire? Many firms offer employees retirement plans,

health care, and other employee benefits

Employee Retirement Income Security Act (ERISA)

Protects pension benefits of workers

Government entities, churches, non U.S. residents, or independent contractors not covered

16-16-2525

ERISAERISA Covers welfare plans and retirement or pension

plans

Applies to employee benefit plans

Welfare plan

Retirement or pension plans

Establishes requirements for managing and administering pension and welfare plans

16-16-2626

ERISAERISAKey

TermsExplanation

Employee benefit plan

Contractual obligation by which an employer or an employee organization agrees to provide retirement benefits or welfare benefits to employees and their

dependents and beneficiaries

Retirement or pension

plan

Provides for compensation at retirement or deferral of income to periods beyond termination of

employment

Defined contribution

Retirement plan where the benefit payable to a participant are based on the amount of contributions

and earnings on such contributions

Defined benefit

Retirement plan where the benefit payable to a participant is defined up front by a formula, the

funding of which is determined actuarially

16-16-2727

Fiduciary DutyFiduciary Duty Fiduciary: Someone who has discretionary

authority over the investment or management of plan assets on behalf of others

16-16-2828

Fiduciary DutyFiduciary Duty

16-16-2929

Reporting and DisclosureReporting and Disclosure Required information

Summary plan description (SPD)

Annual report with the DOL

ERISA was amended by the Pension Protection Act (PPA) of 2006

Eligibility and Vesting Rules

Benefit plans – 100 percent non-forfeitable after three years of employment

16-16-3030

Funding Requirements for Defined Funding Requirements for Defined Benefit PlansBenefit Plans

Minimum standards

Accruals of benefits based on service in each year

Amortization of any prior service or actuarial gains or losses on investment over a set period of years

Pension Benefit Guarantee Corporation (PBGC)

ERISA litigation

Fiduciary liability

The Worker, Retiree, and Employer Recovery Act

16-16-3131

COBRA and HIPAACOBRA and HIPAA Consolidated Omnibus Budget Reconciliation

Act (COBRA)

Applies to group health plan (20≥ employees)

Health Insurance Portability and Accountability Act (HIPAA)

promote standardization and efficiency in the health care industry

HIPAA privacy rules

General obligations of covered entities

16-16-3232

Enforcement of ERISAEnforcement of ERISA Employers have the right to reduce or modify

employee benefits

Unless it is prohibited by contractual obligations

Similarly situated participants must be treated alike

ERISA claims - asserted under the Age Discrimination in Employment Act (ADEA)