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Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
CHAPTER 22Employment Law
22-1 Making and Terminating Employment Contracts
22-2 Duties of Employers and Employees
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Employment at Will At-will employees – employees who do not have
employment contracts. Wrongful discharge – the discharge of an employee
in violation of a statute, an employment contract, or public policy, or tortiously.
The employee can recover damages and other remedies.
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Chapter 22Slide 3
22-122-1 Making and Terminating Employment Contracts
GOALS Describe how employment contracts
are made Explain how employment contracts
are terminated
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Chapter 22Slide 4
HOW ARE EMPLOYMENT CONTRACTS MADE?
Terms of the employment contract Express agreements Implied agreements Terms imposed by law
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Chapter 22Slide 5
HOW ARE EMPLOYMENT CONTRACTS TERMINATED?
By performance By termination at will
Wrongful discharge Violation of contract terms Government employees
By material breach Unemployment compensation
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-WesternSlide 6
22-222-2 Duties of Employers and Employees
GOALS List an employer’s duties Name an employee’s duties
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Chapter 22Slide 7
WHAT ARE AN EMPLOYER’S DUTIES?
Duties owed to employees Reasonable treatment Safe working conditions Fair labor standards Payroll deductions Military service Voting
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
WHAT ARE AN EMPLOYER’S DUTIES?
Duties owed to minors State laws Federal law
Duties owed to those injured by employees
(continued)
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Chapter 22Slide 9
WHAT ARE AN EMPLOYEE’S DUTIES?
Duty to fulfill the employment contract Duty of obedience Duty of reasonable skill Duty of loyalty and honesty Duty of reasonable performance
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Workers’ Compensation ActsWorkers’ Compensation Acts
Acts that compensate workers Acts that compensate workers and their families if workers and their families if workers are injured in connection with are injured in connection with their jobs.their jobs.
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Workers’ Compensation Acts Workers’ compensation
benefits
vary by state. are paid according to preset
limits established by statute or regulation.
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Workers’ Compensation Insurance
States usually require employers to: To pay for workers’
compensation insurance, or To self-insure by making
payments into a contingency fund.
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Employment Related Injury To recover under workers’
compensation, the worker’s injuries must have been employment-related.
Stress may be a compensable work-related injury.
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Exclusive Remedy Workers’ compensation is
an exclusive remedy. Workers cannot sue their
employers in court for damages. Exception occurs when an
employer intentionally injures an employee.
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Occupational Safety and Health Act (1970)
Enacted to promote safety in the workplace.
Established the Occupational Safety and Health Administration (OSHA).
Virtually all private employers are within the scope of the act.
Federal, state, and local governments are exempt.
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Occupational Safety and Health Act (continued)
The act imposes record keeping and reporting requirements on employers.
Employers are required to post notices in the workplace informing employees of their rights under this act.
OSHA is empowered to administer the act and adopt rules and regulations to interpret and enforce it.
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Occupational Safety and Health Act (continued)
OSHA is empowered to inspect places of employment for health hazards and safety violations.
If a violation is found, OSHA can issue a written citation.
Requires the employer to abate or correct the situation.
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Types of OSHA Standards
Specific Duty Standard Addresses a safety problem of a
specific duty nature. e.g., requirement for a safety guard on a
particular type of equipment
General Duty Standard Duty that an employer has to provide
a work environment “free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.”
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Fair Labor Standards Act (FLSA) Federal act enacted in 1938 to
protect workers.
Prohibits child labor
Establishes minimum wage
requirements
Establishes overtime pay
requirements
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Child Labor The FLSA forbids the use of
oppressive child labor. It is unlawful to ship goods produced
by businesses that use oppressive child labor.
The Department of Labor defines the standards for lawful child labor.
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Minimum Wage and Overtime Pay
Managerial, administrative, and professional employees are exempt from the FLSA’s wage and hour provisions.
Employers are required to pay covered (non-exempt) workers at least the minimum wage for their regular work hours.
Overtime pay is also mandated.
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Minimum Wage Set by Congress and can be
changed. Employers are permitted to
pay less than minimum wage to students and apprentices.
An employer may reduce minimum wages by an amount equal to the reasonable cost of food and lodging provided to employees.
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Overtime Pay An employer cannot require
nonexempt employees to work more than 40 hours per week unless they are paid one-and-a half times their regular pay for each hour worked in excess of 40 hours.
Each week is treated separately.
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Family and Medical Leave Act Applies to employers with
50 or more workers, federal, state, and local government workers
Employee must have worked for employer for at least one year
Employee must have performed 1250 hours of work in previous twelve-month period
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Family and Medical Leave Act (continued)
Provides up to 12 weeks of unpaid leave for: Birth of child Placement of child for
adoption or foster care Serious health condition Care for spouse, child, or
parent with serious health condition
Must use all available sick time and vacation time before it is applied
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Family and Medical Leave Act (continued)
Employee mist be restored to either same or equivalent position
Must be given equivalent pay and benefits
No accrual of seniority
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Consolidated Omnibus Budget Reconciliation Act (COBRA)
Separated employee must be offered the opportunity to continue group health program
Separated employee bears cost plus administration fees
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Employee Retirement Income Security Act (ERISA)
If employer offers a pension plan ERISA applies. Establishes record-keeping
and disclosure requirements Sets requirements for
vesting Establishes percentage of
assets that can be invested in employer’s securities
Law for Business and Personal UseLaw for Business and Personal Use© Thomson South-Western
Immigration Reform and Control Act (IRCA)
Administered by U.S. Immigration and Naturalization Service
Makes it unlawful to hire illegal immigrants. Employers must keep
records. Employers must file I-9.