CHAPTER  2

U.S. Laws and Regulations

This chapter introduces the federal laws and legislation that all human resource (HR) professionals must know and understand. When you thoroughly read these laws and regulations, you will better understand the material in Part II of this book. Knowing these laws can sometimes make the difference in selecting the right answer on the Associate Professional in Human Resources (aPHR) exam. After studying this chapter and completing the practice questions, you should have an understanding of the relevance of these laws in the employment relationship. HR professionals in both small and large companies play an important role in dealing with day-to-day employment issues relating to recruiting, hiring, managing, and training employees. HR systems implementation must be guided by legal requirements.

Many times as you read this chapter, you will discover the phrase “engaged in interstate commerce.” This is a term used by Congress to identify which employers will be subject to a law’s requirements. Interstate commerce includes shipping a Maine lobster to a New Mexico restaurant for tonight’s dinner, for example. Also included are selling products on Amazon or eBay (and similar Internet sites) to customers in states other than the one you are in and purchasing products or components from a supplier in a state other than the one you are in. As you can tell, it is a broad application that captures a great many small employers as well as large employers.

The following sections cover what you need to know concerning laws and regulations that govern employment.

When You Have ONE or More Employees

Employers sometimes forget that the moment they hire their first employee they become subject to a host of legal requirements. Here are 53 laws that will impact an employer with one or more employees on the payroll.

The Clayton Act (1914)

This legislation modified the Sherman Anti-Trust Act by prohibiting mergers and acquisitions that would lessen competition. It also prohibited a single person from being a director of two or more competing corporations. The act also restricts the use of injunctions against labor and legalized peaceful strikes, picketing, and boycotts.

For more information, see 15 U.S.C. Sec.12 at www.law.cornell.edu/uscode/text/15/12 or perform an Internet search for the law by name.

The Consumer Credit Protection Act (1968)

Congress expressed limits to the amount of wages that can be garnished or withheld in any one week by an employer to satisfy creditors. This law also prohibits employee dismissal because of garnishment for any one indebtedness.

For more information, see www.dol.gov/compliance/laws/comp-ccpa.htm or perform an Internet search for the law by name.

The Copeland “Anti-Kickback” Act (1934)

This act precludes a federal contractor or subcontractor from inducing an employee to give up any part of his or her wages to the employer for the benefit of having a job. For more information, see www.dol.gov/whd/regs/statutes/copeland.htm or perform an Internet search for the law by name.

The Copyright Act (1976)

The Copyright Act offers protection of “original works” for authors so others may not print, duplicate, distribute, or sell their work. In 1998, the Copyright Term Extension Act further extended copyright protection to the duration of the author’s life plus 70 years for general copyrights and to 95 years for works made for hire and works copyrighted before 1978. If anyone in the organization writes technical instructions, policies and procedures, manuals, or even e-mail responses to customer inquiries, it would be a good idea to speak with your attorney and arrange some copyright agreements to clarify whether the employer or the employee who authored those documents will be designated the copyright owner. Written agreements can be helpful in clearing any possible misunderstandings. For more information, see www.copyright.gov/title17/92appa.pdf or perform an Internet search for the law by name.

The Davis-Bacon Act (1931)

This law requires contractors and subcontractors on certain federally funded or assisted construction projects worth more than $2,000 in the United States to pay wages and fringe benefits at least equal to those prevailing in the local area where the work is performed. This law applies only to laborers and mechanics. It also allows trainees and apprentices to be paid less than the predetermined rates under certain circumstances. For more information, see www.dol.gov/whd/regs/statutes/dbra.htm or perform an Internet search for the law by name.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (2010)

This law offers a wide range of mandates affecting all federal financial regulatory agencies and almost every part of the nation’s financial services industry. It includes a nonbinding vote for shareholders on executive compensation, golden parachutes, and return of executive compensation based on inaccurate financial statements. Also included are requirements to report chief executive officer (CEO) pay compared to the average employee compensation and provision of financial rewards for whistle-blowers. Watch your federal law resources for updates on regulations implementing changes to this law. For more information, see www.sec.gov/about/laws/wallstreetreform-cpa.pdf or perform an Internet search for the law by name.

The Economic Growth and Tax Relief Reconciliation Act (EGTRRA) (2001)

Here are modifications to the Internal Revenue Code that adjust pension vesting schedules, increasing retirement plan limits, permitting pretax catch-up contributions by participants older than 50 in certain plans (which are not tested for discrimination when made available to the entire workforce), and modifying distribution and rollover rules. For more information, see www.irs.gov/pub/irs-tege/epchd104.pdf or perform an Internet search for the law by name.

The Electronic Communications Privacy Act (ECPA) (1986)

This is a unique law composed of two pieces of legislation, the Wiretap Act and the Stored Communications Act. Combined, they provide rules for access, use, disclosure, interpretation, and privacy protections of electronic communications, and they provide the possibility of both civil and criminal penalties for violations. They prohibit interception of e-mails in transmission and access to e-mails in storage. The implications for HR have to do with recording employee conversations. Warnings such as “This call may be monitored or recorded for quality purposes” are intended to provide the notice required by this legislation. Having cameras in the workplace to record employee or visitor activities is also covered, and notices must be given to anyone subject to observation or recording. Recording without such a notice can be a violation of this act. If employers make observations of employee activities and/or record telephone and other conversations between employees and others and proper notice is given to employees, employees will have no expectation of privacy during the time they are in the workplace.

For more information, see www.justice.gov/jmd/ls/legislative_histories/pl99-508/pl99-508.html or perform an Internet search for the law by name.

The Employee Polygraph Protection Act (1988)

Before 1988, it was common for employers to use “lie detectors” as tools in investigations of inappropriate employee behavior. That changed when this act prohibited the use of lie detector tests for job applicants and employees of companies engaged in interstate commerce. Exceptions are made for certain situations, including law enforcement and national security. There is a federal poster requirement. Note: Many state laws also prohibit the use of lie detector tests. Be sure you understand state laws where you have work locations.

For more information, see www.dol.gov/compliance/laws/comp-eppa.htm or perform an Internet search for the law by name.

The Employee Retirement Income Security Act (ERISA) (1974)

This law doesn’t require employers to establish pension plans but governs how those plans are managed once they have been established. It establishes uniform minimum standards to ensure that employee benefit plans are established and maintained in a fair and financially sound manner; protects employees covered by a pension plan from losses in benefits due to job changes, plant closings, bankruptcies, or mismanagement; and protects plan beneficiaries. It covers most employers engaged in interstate commerce. Public-sector employees and many churches are not subject to ERISA. Employers that offer retirement plans must also conform with the Internal Revenue Service (IRS) code in order to receive tax advantages. For more information, see www.dol.gov/compliance/laws/comp-erisa.htm or perform an Internet search for the law by name.

The Equal Pay Act (an Amendment to the FLSA) (1963)

Equal pay requirements apply to all employers. The act is an amendment to the Fair Labor Standards Act (FLSA) and is enforced by the Equal Employment Opportunity Commission (EEOC). It prohibits employers from discriminating on the basis of sex by paying wages to employees at a rate less than the rate paid to employees of the opposite sex for equal work on jobs requiring equal skill, effort, and responsibility and which are performed under similar working conditions. It does not address the concept of comparable worth. For more information, see www.eeoc.gov/laws/statutes/epa.cfm or perform an Internet search for the law by name.

The FAA Modernization and Reform Act (2012)

Congress took these actions in 2012 to amend the Railway Labor Act to change union certification election processes in the railroad and airline industries and impose greater oversight of the regulatory activities of the National Mediation Board (NMB). This law requires the Government Accountability Office (GAO) initially to evaluate the NMB’s certification procedures and then audit the NMB’s operations every 2 years. For more information, see www.faa.gov/regulations_policies/reauthorization/media/PLAW-112publ95[1].pdf or perform an Internet search for the law by name.

The Fair and Accurate Credit Transactions Act (FACT) (2003)

The financial privacy of employees and job applicants was enhanced in 2003 with these amendments to the Fair Credit Reporting Act, providing for certain requirements in third-party investigations of employee misconduct charges. Employers are released from obligations to disclose requirements and obtain employee consent if the investigation involves suspected misconduct, a violation of the law or regulations, or a violation of preexisting written employer policies. A written plan to prevent identity theft is required. For more information, see www.gpo.gov/fdsys/pkg/PLAW-108publ159/pdf/PLAW-108publ159.pdf or perform an Internet search for the law by name.

The Fair Credit Reporting Act (FCRA) (1970), as Amended in 2011

This was the first major legislation to regulate the collection, dissemination, and use of consumer information, including consumer credit information. It requires employers to notify any individual in writing if a credit report may be used in making an employment decision. Employers must also get a written authorization from the subject individual before asking a credit bureau for a credit report. The Fair Credit Reporting Act also protects the privacy of background investigation information and provides methods for ensuring that information is accurate. Employers who take adverse action against a job applicant or current employee based on information contained in the prospective or current employee’s consumer report will have additional disclosures to make to that individual. For more information, see www.ftc.gov/os/statutes/031224fcra.pdf or perform an Internet search for the law by name.

The Fair Labor Standards Act (FLSA) (1938)

The FLSA is one of a handful of federal laws that establish the foundation for employee treatment. It is a major influence in how people are paid, in employment of young people, and in how records are to be kept on employment issues such as hours of work. The law introduced a maximum 44-hour 7-day workweek, established a national minimum wage, guaranteed “time-and-a-half” for overtime in certain jobs, and prohibited most employment of minors in “oppressive child labor,” a term that is defined in the statue. It applies to employees engaged in interstate commerce or employed by an enterprise engaged in commerce or in the production of goods for commerce, unless the employer can claim an exemption from coverage. It is interesting to note that FLSA, rather than the Civil Rights Act of 1964, is the first federal law to require employers to maintain records on employee race and sex identification.

Provisions and Protections

Employers covered under the “enterprise” provisions of this law include public agencies; private employers whose annual gross sales exceed $500,000; those operating a hospital or a school for mentally or physically disabled or gifted children; and a preschool, an elementary or secondary school, or an institution of higher education (profit or nonprofit). Individuals can still be covered even if they don’t fit into one of the enterprises listed. If the employees’ work regularly involves them in commerce between the states, they would be covered. These include employees who work in communications or transportation; regularly use the mail, telephone, or telegraph for interstate communication or keep records of interstate transactions; handle shipping and receiving goods moving in interstate commerce; regularly cross state lines in the course of employment; or work for independent employers who contract to do clerical, custodial, maintenance, or other work for firms engaged in interstate commerce or in the production of goods for interstate commerce. The FLSA establishes a federal minimum wage that has been raised from time to time since the law was originally passed. The FLSA prohibits shipment of goods in interstate commerce that were produced in violation of the minimum wage, overtime pay, child labor, or special minimum wage provisions of the law.

Recordkeeping Requirements

The FLSA proscribes methods for determining whether a job is exempt or nonexempt from the overtime pay requirements of the act. If a job is exempt from those requirements, incumbents can work as many hours of overtime as the job requires without being paid for their overtime. Exempt versus nonexempt status attaches to the job, not the incumbent. So, someone with an advanced degree who is working in a clerical job may be nonexempt because of the job requirements, not their personal qualifications. Employers are permitted to have a policy that calls for paying exempt employees when they work overtime. That is a voluntary provision of a benefit in excess of federal requirements. State laws may have additional requirements. People who work in nonexempt jobs must be paid overtime according to the rate computation methods provided for in the act. Usually, this is a requirement for overtime after 40 hours of regular time worked during a single workweek. The act also describes how a workweek is to be determined.

Each employer covered by the FLSA must keep records for each covered, nonexempt worker. Those records must include the following:

•  Employee’s full name and Social Security number.

•  Address, including ZIP code.

•  Birth date, if younger than 19.

•  Sex.

•  Occupation.

•  Time and day of week when employee’s workweek begins.

•  Hours worked each day and total hours worked each workweek. (This includes a record of the time work began at the start of the day, when the employee left for a meal break, the time the employee returned to work from the meal break, and the time work ended for the day.)

•  Basis on which employee’s wages are paid (hourly, weekly, piecework).

•  Regular hourly pay rate.

•  Total daily or weekly straight-time earnings.

•  Total overtime earnings for the workweek.

•  All additions or deductions from the employee’s wages.

•  Total wages paid each pay period.

•  Date of payment and the pay period covered by the payment.

There is no limit in the FLSA to the number of hours employees age 16 and older may work in any workweek. There is a provision for employers to retain all payroll records, collective bargaining agreements, sales, and purchase records for at least 3 years. Any time card, piecework record, wage rate tables, and work and time schedules should be retained for at least 2 years. A workplace poster is required to notify employees of the federal minimum wage.

The federal child labor provisions of the FLSA, also known as the child labor laws, were enacted to ensure that when young people work, the work is safe and does not jeopardize their health, well-being, or educational opportunities. These provisions also provide limited exemptions. Workers younger than 14 are restricted to jobs such as newspaper delivery to local customers; baby-sitting on a casual basis; acting in movies, TV, radio, or theater; and working as a home worker gathering evergreens and making evergreen wreaths. Under no circumstances, even if the business is family owned, may a person under 18 work in any of the 17 most hazardous jobs. See Figure 2-1 for a list of the 17 most hazardous jobs.

Figure 2-1 Seventeen most dangerous jobs that may not be performed by workers younger than 18

For workers aged 14 and 15, all work must be performed outside school hours, and these workers may not work

•  More than 3 hours on a school day, including Friday.

•  More than 18 hours per week when school is in session.

•  More than 8 hours per day when school is not in session.

•  More than 40 hours per week when school is not in session.

•  Before 7 A.M. or after 7 P.M. on any day, except from June 1 through Labor Day, when nighttime work hours are extended to 9 P.M.

•  A work permit from the school district is required.

Until employees reach the age of 18 it is necessary for them to obtain a work permit from their school district. For workers aged 16 through 17, there are no restrictions on the number of hours that can be worked per week. There continues to be a ban on working any job among the 17 most hazardous positions. All of these conditions must be met or the employer will be subject to penalties from the U.S. Department of Labor.

Overtime Computation

Overtime is required at a rate of 1.5 times the normal pay rate for all hours worked over 40 in a single workweek. An employer may designate that their workweek begins at a given day and hour and continues until that same day and hour 7 days later. Once selected, that same workweek definition must be maintained consistently until there is a legitimate business reason for making a change. That change must be clearly communicated in advance to all employees who will be affected by the change. No pay may be forfeit because the employer changes its workweek definition. Compensating time off is permitted under the FLSA if it is given at the same rates required for overtime pay.

Enforcement

Provisions of the FLSA are enforced by the U.S. Department of Labor’s Wage and Hour Division. With offices around the country, this agency is able to interact with employees on complaints and follow up with employers by making an on-site visit if necessary. If violations are found during an investigation, the agency has the authority to make recommendations for changes that would bring the employer into compliance. Retaliation against any employee for filing a complaint under the FLSA, or in any other way availing himself or herself of the legal rights it offers, is subject to additional penalties. Willful violations may bring criminal prosecution and fines up to $10,000. Employers who are convicted a second time for willfully violating FLSA can find themselves in prison.

The Wage and Hour Division may, if it finds products produced during violations of the act, prevent an employer from shipping any of those goods. It may also “freeze” shipments of any product manufactured while overtime payment requirements were violated. A 2-year limit applies to recovery of back pay unless there was a willful violation, which triggers a 3-year liability. For more information, see www.dol.gov/whd/regs/statutes/FairLaborStandAct.pdf or perform an Internet search for the law by name.

The Foreign Corrupt Practices Act (FCPA) (1997)

The FCPA prohibits American companies from making bribery payments to foreign officials for the purpose of obtaining or keeping business. Training for employees who are involved with international negotiations should include a warning to avoid anything even looking like bribery payment to a foreign company or its employees. For more information, see www.justice.gov/criminal/fraud/fcpa/ or perform an Internet search for the law by name.

The Health Information Technology for Economic and Clinical Health (HITECH) Act (2009)

The HITECH Act requires that anyone with custody of personal health records send notification to affected individuals if their personal health records have been disclosed, or the employer believes they have been disclosed, to any unauthorized person. Enacted as part of the American Recovery and Reinvestment Act (ARRA), this law made several changes to the Health Insurance Portability and Accountability Act, including the establishment of a federal standard for security breach notifications that requires covered entities, in the event of a breach of any personal health information (PHI), to notify each individual whose PHI has been disclosed without authorization. For more information, see www.hhs.gov/ocr/privacy/hipaa/administrative/enforcementrule/hitechenforcementifr.html or perform an Internet search for the law by name.

The Health Insurance Portability and Accountability Act (HIPAA) (1996)

This law ensures that individuals who leave or lose their jobs can obtain health coverage even if they or someone in their family has a serious illness or injury or is pregnant. It also provides privacy requirements related to medical records for individuals as young as 12. It also limits exclusions for preexisting conditions and guarantees renewability of health coverage to employers and employees, allowing people to change jobs without the worry of loss of coverage. It also restricts the ability of employers to impose actively-at-work requirements as preconditions for health plan eligibility, as well as a number of other benefits. For more information, see www.hhs.gov/ocr/privacy or perform an Internet search for the law by name.

The Immigration and Nationality Act (INA) (1952)

The INA is the first law that pulled together all of the issues associated with immigration and is considered the foundation on which all following immigration laws have been built. It addresses employment eligibility and employment verification. It defines the conditions for the temporary and permanent employment of aliens in the United States.

The INA defines an alien as any person lacking citizenship or status as a national of the United States. The INA differentiates aliens as follows:

•  Resident or nonresident

•  Immigrant or nonimmigrant

•  Documented and undocumented

The need to curtail illegal immigration led to the enactment of the Immigration Reform and Control Act (IRCA). For more information, see www.dol.gov/compliance/laws/comp-ina.htm or perform an Internet search for the law by name.

The Immigration Reform and Control Act (IRCA) (1986)

This is the first law to require new employees to prove both their identity and their right to work in this country. Regulations implementing this law created the Form I-9,¹ which must be completed by each new employee and the employer. Form I-9 has been updated many times since 1986. Please be sure you are using the most current version of the form. There are document retention requirements. The law prohibits discrimination against job applicants on the basis of national origin or citizenship. It establishes penalties for employers who hire illegal aliens. For more information, see www.eeoc.gov/eeoc/history/35th/thelaw/irca.html or perform an Internet search for the law by name.

The IRS Intermediate Sanctions (2002)

Here we find guidelines for determining reasonable compensation for executives of nonprofit organizations. It was enacted by the IRS and applied to nonprofit organizations that engage in the transactions that inure to the benefit of a disqualified person within the organization. These rules allow the IRS to impose penalties when it determines that top officials have received excessive compensation from their organizations. Intermediate sanctions may be imposed either in addition to or instead of revocation of the exempt state of the organization. For more information, see www.irs.gov/pub/irs-tege/eotopice03.pdf or perform an Internet search for the law by name.

The Labor-Management Relations Act (LMRA; Taft-Hartley Act) (1947)

Also called the Taft-Hartley Act, this is the first national legislation that placed controls on unions. It prohibits unfair labor practices by unions and outlaws closed shops, where union membership is required in order to get and keep a job. Employers may not form closed-shop agreements with unions. It requires both parties to bargain in good faith and covers nonmanagement employees in private industry who are not covered by the Railway Labor Act.

For more information, see 29 U.S.C. Sec.141 at www.casefilemethod.com/Statuters/LMRA.pdf or search the Internet for the law by name.

The Labor-Management Reporting and Disclosure Act (Landrum-Griffin Act) (1959)

Also called the Landrum-Griffin Act, this law outlines procedures for redressing internal union problems, protects the rights of union members from corrupt or discriminatory labor unions, and applies to all labor organizations. Specific requirements include the following:

•  Unions must conduct secret elections, the results of which can be reviewed by the U.S. Department of Labor.

•  A Bill of Rights guarantees union members certain rights, including free speech.

•  Convicted felons and members of the Communist Party cannot hold office in unions.

•  Annual financial reporting from unions to the Department of Labor is required.

•  All union officials have a fiduciary responsibility in managing union assets and conducting the business of the union.

•  Union power to place subordinate organizations in trusteeship is limited.

•  Minimum standards for union disciplinary action against its members are provided.

For more information, see www.dol.gov/compliance/laws/comp-lmrda.htm or perform an Internet search for the law by name.

The Mine Safety and Health Act (1977)

Following a series of deadly mining disasters, the American people demanded that Congress take action to prevent similar events in the future. This law converted the existing Mine Enforcement Safety Administration (MESA) to the Mine Safety and Health Administration (MSHA). For the first time, it brought all coal, metal, and nonmetal mining operations under the same Department of Labor jurisdiction. Regulations and safety procedures for the coal mining industry were not altered, just carried into the new agency for oversight. For more information, see www.dol.gov/compliance/laws/comp-fmsha.htm or perform an Internet search for the law by name.

Provisions and Protections

This law requires the secretaries of Labor and Health, Education, and Welfare to create regulations governing the country’s mines. All mines are covered if they are involved in commerce, which any active mining operation would be. Regulations that implement this law specify that employees must be provided with certain protective equipment while working in a mine. These devices relate to respiration and fire prevention, among other protections. Protecting against “black lung disease” is a key concern, even today, in the coal mining industry.

Recordkeeping Requirements

Employers engaged in mining operations must inspect their worksites and document the results, reflecting hazards and actions taken to reduce or eliminate the hazards. Employees are to be given access to information related to accident prevention, fatal accident statistics for the year, and instructions on specific hazards they will face while working in the mine. Requirements detail the content of written emergency response plans, emergency mapping, and rescue procedures. Individual employee exposure records must be maintained. Each mine operator is required to conduct surveys of mine exposures and hazards, a plan to deal with those problems, and a record of the results. This information must be made available to MSHA inspectors if they request it.

MSHA Standards

The agency enforces mine safety standards that involve ventilation, chemical exposure, noise, forklifts and other mining equipment, mine shoring, and more. Material Safety Data Sheets (MSDSs) must be available to employees in mining as they are in other industries overseen by the OSHA agency.

MSHA Enforcement

MSHA has a team of federal inspectors that conduct on-site audits of mining operations. MSHA has the authority to cite mine operators for violations of its regulations, and citations can carry a $1,000 per day penalty in some circumstances.²

The National Industrial Recovery Act (1933)

This was an attempt to help the country get out from the Great Depression. It proposed the creation of “Codes of Fair Competition” for each of several different industries. Essentially, every business would have to identify with and belong to a trade association. The association would then be required to create a Code of Fair Competition for the industry. Antitrust laws would be suspended in favor of the code. Of course, the code would have to be approved by the president of the United States, and the administration would issue federal licenses to every business in the country. If a business refused to participate in the code, its license could be suspended, and that would be the signal for that business to end all operations. There were financial penalties as well. This law didn’t fare very well. It was declared unconstitutional by the U.S. Supreme Court in 1935 and was replaced by the National Labor Relations Act later that same year.

For more information, see www.ourdocuments.gov/doc.php?flash=true&doc=66 or perform an Internet search for the law by name.

The National Labor Relations Act (NLRA; Wagner Act) (1935)

This is the “granddaddy” of all labor relations laws in the United States. It initially provided that employees have a right to form unions and negotiate wage and hour issues with employers on behalf of the union membership. Specifically, the NLRA grants to employees the right to organize, join unions, and engage in collective bargaining and other “concerted activities.” It also protects against unfair labor practices by employers.

Following on the heels of the National Industrial Recovery Act’s failures, this law stepped into the void and addressed both union and employer obligations in labor relations issues. It established the National Labor Relations Board (NLRB), which would help define fair labor practices in the following decades. The NLRB has the power to accept and investigate complaints of unfair labor practices by either management or labor unions. It plays a judicial role within an administrative setting. This law is sometimes called the Wagner Act. The following are some key provisions:

•  The right of workers to organize into unions for collective bargaining

•  The requirement of employers to bargain in good faith when employees have voted in favor of a union to represent them

•  Requirement that unions represent all members equally

•  Covers nonmanagement employees in private industry who are not already covered by the Railway Labor Act

For more information, see www.nlrb.gov/national-labor-relations-act or perform an Internet search for the law by name.

The Needlestick Safety and Prevention Act (2000)

This law modifies the Occupational Safety and Health Act by introducing a new group of requirements in the medical community. Sharps, as they are called, are needles, puncture devices, knives, scalpels, and other tools that can harm either the person using them or someone else. The law and its regulations provides rules related to handling these devices, disposing of them, and encouraging invention of new devices that will reduce or eliminate the risk associated with injury due to sharps. Sharps injuries are to be recorded on the OSHA 300 log with “privacy case” listed and not the employee’s name. Blood-borne pathogens and transmission of human blood-borne illnesses such as AIDS/HIV and hepatitis are key targets of this law. Reducing the amount of injury and subsequent illness due to puncture, stab, or cut wounds is a primary objective. There are communication requirements including employment poster content requirements.

For more information, see www.gpo.gov/fdsys/pkg/PLAW-106publ430/html/PLAW-106publ430.htm or perform an Internet search for the law by name.

The Norris-LaGuardia Act (1932)

Remember that this was still 3 years before the NLRA came to pass. When unions tried to use strikes and boycotts, employers would trot into court and ask for an injunction to prevent such activity. More often than not, they were successful, and judges provided the injunctions. Congress had been pressured by organized labor to restore their primary tools that could force employers to bargain issues unions saw as important. The following are key provisions of this law:

•  It prohibited “yellow-dog” contracts. Those were agreements in which employees promised employers that they would not join unions. This new law declared such contracts to be unenforceable in any federal court.

•  It prohibited federal courts from issuing injunctions of any kind against peaceful strikes, boycotts, or picketing when used by a union in connection with a labor dispute.

•  It defined labor dispute to include any disagreement about working conditions.

For more information, see 29 U.S.C., Chapter 6, at http://uscode.house.gov/download/pls/29C6.txt or perform an Internet search for the law by name.

The Occupational Safety and Health Act (OSHA) (1970)

Signed into law by President Richard M. Nixon on December 29, 1970, the Occupational Safety and Health Act created an administrative agency within the U.S. Department of Labor called the Occupational Safety and Health Administration (OSHA). It also created the National Institute of Occupational Safety and Health (NIOSH), which resides inside the Centers for Disease Control (CDC).

Provisions and Protections

Regulations implementing this legislation have grown over time. They are complex and detailed. It is important that HR professionals understand the basics and how to obtain additional detailed information that applies to their particular employer circumstance. There are many standards that specify what employers must do to comply with their legal obligations. Overall, however, the law holds employers accountable for providing a safe and healthy working environment. The “General Duty Clause” in OSHA’s regulations says employers shall furnish each employee with a place of employment free from recognized hazards that are likely to cause death or serious injury. It also holds employees responsible for abiding by all safety rules and regulations in the workplace. Some provisions require notices be posted in the workplace covering some of the OSHA requirements. Posters are available for download from the OSHA web site without charge. The law applies to all employers regardless of the employee population size.

Recordkeeping Requirements

OSHA regulations require that records be kept for many purposes. It is necessary to conduct and document inspections of the workplace, looking for safety and health hazards. It is necessary to document and make available to employees records about hazardous materials and how they must be properly handled. Employers with ten or more people on the payroll must summarize all injury and illness instances and post that summary in a conspicuous place within the workplace. That report must remain posted from February 1 to April 30 each year. Certain employers are exempt from some OSHA recordkeeping requirements. They generally are classified by industry Standard Industrial Classification (SIC) Code. A list is available on OSHA’s web site at www.OSHA.gov. Any time there is a serious or fatal accident, a full incident report must be prepared by the employer and maintained in the safety file. These records must be maintained for a minimum of 5 years from the date of the incident. Known as a log of occupational injury or illness, it must include a record of each incident resulting in medical treatment (other than first aid), loss of consciousness, restriction of work or motion, or transfer or termination of employment. If you are in the medical industry, construction industry, or manufacturing industry, or if you use nuclear materials of any kind, there are other requirements you must meet. Key to compliance with OSHA rules is communication with employees. Training is often provided by employers to meet this hazard communication requirement. In summary, then, OSHA recordkeeping involves the following:

•  Periodic safety inspections of the workplace

•  Injury or illness incident reports

•  Annual summary of incidents during the previous calendar year

•  Injury and Illness Prevention Program (if required by rules governing your industry)

•  Employee training on safety procedures and expectations

•  Records of training participation

•  Material Safety Data Sheets for each chemical used in the workplace (made available to all employees in a well-marked file or binder that can be accessed at any time during work hours)

Occupational Safety and Health Act Enforcement

OSHA inspections may include the following:

•  On-site visits that are conducted without advance notice Inspectors can just walk into a place of employment and request that you permit an inspection. You don’t have to agree unless the inspector has a search warrant. In the absence of the warrant, you can delay the inspection until your attorney is present.

•  On-site inspections or phone/fax investigations Depending on the urgency of the hazard and agreement of the person filing the complaint, inspectors may telephone or fax inquiries to employers. The employer has 5 working days to respond with a detailed description of inspection findings, corrective action taken, and additional action planned.

•  Highly trained compliance officers OSHA Training Institute provides training for OSHA’s compliance officers, state compliance officers, state consultants, other federal agency personnel, and the private sector.

Inspection priorities include the following:

•  Imminent danger Situations where death or serious injury are highly likely. Compliance officers will ask employers to correct the conditions immediately or remove employees from danger.

•  Fatalities and catastrophes Incidents that involve a death or the hospitalization of three or more employees. Employers must report these incidents to OSHA within 8 hours.

•  Worker complaints Allegations of workplace hazards or OSHA violations. Employees may request anonymity when they file complaints with OSHA.

•  Referrals Other federal, state, or local agencies, individuals, organizations, or the media can make referrals to OSHA so the agency may consider making an inspection.

•  Follow-ups Checks for abatement of violations cited during previous inspections are also conducted by OSHA personnel in certain circumstances.

•  Planned or programmed investigations OSHA can conduct inspections aimed at specific high-hazard industries or individual workplaces that have experienced high rates of injuries and illnesses. These are sometimes called targeted investigations.

Two Types of Standards

The law provides for two types of safety and health standards. The agency has therefore developed its regulations and standards in those two categories.

Normal Standards If OSHA determines that a specific standard is needed, any of several advisory committees may be called upon to develop specific recommendations. There are two standing committees, and ad hoc committees may be appointed to examine special areas of concern to OSHA. All advisory committees, standing or ad hoc, must have members representing management, labor, and state agencies, as well as one or more designees of the Secretary of Health and Human Services (HHS). The occupational safety and health professions and the general public also may be represented.³

Emergency Temporary Standards “Under certain limited conditions, OSHA is authorized to set emergency temporary standards that take effect immediately. First, OSHA must determine that workers are in grave danger due to exposure to toxic substances or agents determined to be toxic or physically harmful or to new hazards and that an emergency standard is needed to protect them. Then, OSHA publishes the emergency temporary standard in the Federal Register, where it also serves as a proposed permanent standard. It is then subject to the usual procedure for adopting a permanent standard except that a final ruling must be made within 6 months. The validity of an emergency temporary standard may be challenged in an appropriate U.S. Court of Appeals.”⁴ For more information, see www.dol.gov/compliance/guide/osha.htm or perform an Internet search for the law by name.

The Omnibus Budget Reconciliation Act (OBRA) (1993)

Signed into law by President Bill Clinton on August 10, 1993, this legislation reduces compensation limits in qualified retirement programs and triggers increased activity in nonqualified retirement programs. It also calls for termination of some plans. For more information, see www.gpo.gov/fdsys/pkg/BILLS-103hr2264enr/pdf/BILLS-103hr2264enr.pdf or perform an Internet search for the law by name.

The Pension Protection Act (PPA) (2006)

Focused solely on pensions, this law requires employers that have underfunded pension plans to pay a higher premium to the Pension Benefit Guarantee Corporation (PBGC). It also requires employers that terminate pension plans to provide additional funding to those plans. This legislation impacted nearly all aspects of retirement planning, including changes to rules about individual retirement accounts (IRAs). For more information, see www.dol.gov/ebsa/pensionreform.html or perform an Internet search for the law by name.

The Personal Responsibility and Work Opportunity Reconciliation Act (1996)

This law requires all states to establish and maintain a new hire reporting system designed to enhance enforcement of child support payments. It requires welfare recipients to begin working after 2 years of receiving benefits. States may exempt parents with children younger than 1 from the work requirements. Parents with children younger than 1 may use this exemption only once; they cannot use it again for subsequent children. These parents also are still subject to the 5-year time limit for cash assistance. HR professionals will need to establish and maintain reporting systems to meet these tracking requirements. For more information, see www.acf.hhs.gov/programs/css/resource/the-personal-responsibility-and-work-opportunity-reconcilliation-act or perform an Internet search for the law by name.

The Portal-to-Portal Act (1947)

By amending the FLSA, this law defines “hours worked” and establishes rules about payment of wages to employees who travel before and/or after their scheduled work shift. The act provides that minimum wages and overtime are not required for “traveling to and from the actual place of performance of the principal activity or activities which such employee is to perform” or for “activities which are preliminary to or postliminary to said principal activity or activities,” unless there is a custom or contract to the contrary. For more information, see 29 U.S.C., Chapter 9, at http://uscode.house.gov/download/pls/29C9.txt or perform an Internet search for the law by name.

The Railway Labor Act (1926)

Originally, this law was created to allow railway employees to organize into labor unions. Over the years, it has been expanded in coverage to include airline employees. Covered employers are encouraged to use the Board of Mediation, which has since morphed into the National Mediation Board, a permanent independent agency. For more information, see www.nmb.gov/documents/rla.html or perform an Internet search for the law by name.

The Rehabilitation Act (1973), as Amended in 1980

This replaced the Vocational Rehabilitation Act and created support for states to create vocational rehabilitation programs. The term originally used in this legislation was handicapped. The law was later modified to replace that term with disabled.

Table 2-1 notes some of the most important sections of the Rehabilitation Act.

Table 2-1 Key Employment Provisions of the Rehabilitation Act of 1973

For more information see https://www.disability.gov/rehabilitation-act-1973/ or perform an Internet search for the law by name.

The Retirement Equity Act (REA) (1984)

Signed into law by President Ronald Reagan on August 23, 1984, the REA provides certain legal protections for spousal beneficiaries of qualified retirement programs. It prohibits changes to retirement plan elections, spousal beneficiary designations, or in-service withdrawals without the consent of a spouse. Changing withdrawal options does not require spousal consent. It permits plan administrators to presume spousal survivors annuity and reduce primary pension amounts accordingly. Specific written waivers are required to avoid spousal annuity. For more information, see www.law.cornell.edu/uscode/text/29/1055 or perform an Internet search for the law by name.

The Revenue Act (1978)

This law added two important sections to the Internal Revenue Tax Code relevant to employee benefits: Section 125, Cafeteria Benefit Plans, and Section 401(k), originally a pretax savings program for private-sector employees known as Individual Retirement Accounts (IRAs), subsequently expanded to a second plan opportunity known as “Roth IRA” that permitted funding with after-tax savings. For more information, see www.irs
.gov/pub/irs-utl/irpac-br_530_relief_-_appendix_natrm_paper_09032009.pdf or perform an Internet search for the law by name.

The Sarbanes-Oxley Act (SOX) (2002)

In response to many corrupt practices in the financial industry and the economic disasters they created, Congress passed the Sarbanes-Oxley Act to address the need for oversight and disclosure of information by publicly traded companies.

Provisions and Protections

This law brought some strict oversight to corporate governance and financial reporting for publicly held companies. It holds corporate officers accountable for proper recordkeeping and reporting of financial information, including internal control systems to assure those systems are working properly. There are also requirements for reporting any unexpected changes in financial condition, including potential new liabilities such as lawsuits. Those lawsuits can involve things such as employee complaints of illegal employment discrimination.

It requires administrators of defined contribution plans to provide notice of covered blackout periods and provides whistle-blower protection for employees.

This law protects anyone who reports wrongdoing to a supervisor, appointed company officials who handle these matters, a federal regulatory or law enforcement agency, or a member or committee of Congress. It even extends to claims that prove to be false as long as the employee reasonably believed the conduct is a violation of Security Exchange Commission (SEC) rules or a federal law involving fraud against shareholders.

On March 4, 2014, the U.S. Supreme Court issued its opinion in the case of Lawson v. FMR LLC. (No. 12–3).⁵ The 6–3 decision held that all contractors and subcontractors of publicly held companies are subject to the Sarbanes-Oxley Act, even if they are not publicly held. The takeaway from this ruling is that nearly everyone is now subject to the whistle-blower provisions of the Sarbanes-Oxley Act. As Justice Sotomayor suggested in her dissenting opinion:

For example, public companies often hire “independent contractors,” of whom there are more than 10 million, and contract workers, of whom there are more than 11 million. And, they employ outside lawyers, accountants, and auditors as well. While not every person who works for a public company in these nonemployee capacities may be positioned to threaten or harass employees of the public company, many are.

Under [the majority opinion] a babysitter can bring a … retaliation suit against his employer if his employer is a checkout clerk for the local PetSmart (a public company) but not if she is a checkout clerk for the local Petco (a private company). Likewise the day laborer who works for a construction business can avail himself of [this ruling] if her company has been hired to remodel the local Dick’s Sporting Goods store (a public company), but not if it is remodeling a nearby Sports Authority (a private company).

Recordkeeping Requirements

Internal control systems are required to assure that public disclosure of financial information is done as required. The registered accounting firm responsible for reviewing the company’s financial reports must attest to the proper implementation of internal control systems and procedures for financial reporting.

SOX Enforcement

Enforcement of the law is done by private-firm audits overseen by the Public Company Accounting Oversight Board (PCAOB). The PCAOB is a nonprofit corporation created by the act to oversee accounting professionals who provide independent audit reports for publicly traded companies. It essentially audits the auditors.

Companies and corporate officers in violation of the act can find themselves subject to fines and/or up to 20 years imprisonment for altering, destroying, mutilating, concealing, or falsifying records, documents, or tangible objects with the intent to obstruct, impede, or influence a legal investigation. For more information, see http://taft.law.uc.edu/CCL/SOact/soact.pdf or perform an Internet search for the law by name.

The Securities and Exchange Act (1934)

When companies “go public” by issuing common stock for trade, it is done on the “primary market.” This law provides for governance in the “secondary market,” which is all trading after the initial public offering. It also created the Securities and Exchange Commission, which has oversight authority for the trading of stocks in this country. It extends the “disclosure” doctrine of investor protection to securities listed and registered for public trading on any of the U.S. exchanges. For more information, see www.law
.cornell.edu/wex/securities_exchange_act_of_1934 or perform an Internet search for the law by name.

The Service Contract Act (1965)

Applying to federal contractors (and subcontractors) offering goods and services to the government, this law calls for payment of prevailing wages and benefit requirements to all employees providing service under the agreement. All contractors and subcontractors, other than construction services, with contract values in excess of $2,500 are covered. Safety and health standards also apply to such contracts.

The compensation requirements of this law are enforced by the Wage and Hour Division in the U.S. Department of Labor (DOL). The SCA safety and health requirements are enforced by the Occupational Safety and Health Administration, also an agency within DOL. For more information, see 41 U.S.C. 351 at www.dol.gov/oasam/regs/statutes/351.htm or perform an Internet search for the law by name.

The Sherman Anti-Trust Act (1890)

If you travel back in time to the latter part of the nineteenth century, you will find that big business dominated the landscape. There were Standard Oil, Morgan Bank, U.S. Steel, and a handful of railroads. They were huge by comparison with other similar enterprises at the time. And people were concerned that they were monopolizing the marketplace and holding prices high just because they could. John Sherman, a Republican senator from Ohio, was chairman of the Senate Finance Committee. He suggested that the country needed some protections against monopolies and cartels. Thus, this law was created and subsequently used by federal prosecutors to break up the Standard Oil Company into smaller units. Over the years, case law has developed that concludes that attempting to restrict competition, or fix prices, can be seen as a violation of this law. Restraint of trade is also prohibited. For more information, see 15 U.S.C. Secs. 1–7 at www.law
.cornell.edu/uscode/text/15/1 or perform an Internet search for the law by name.

The Small Business Job Protection Act (1996)

This law increased federal minimum wage levels and provided some tax incentives to small business owners to protect jobs and increase take-home pay. It also amended the Portal-to-Portal Act for employees who use employer-owned vehicles. It created the SIMPLE 401(k) retirement plan to make pension plans easier for small businesses. Other tax incentives created by this law include the following:

•  Employee education incentive—allowed small business owners to exclude up to $5,250 from an employee’s taxable income for educational assistance provided by the employer

•  Increased the maximum amount of capital expense allowed for a small business to $7,000 per year

•  Replaced the Targeted Jobs Tax Credit with the Work Opportunity Tax Credit

•  Provided a tax credit to individuals who adopted a child (up to $5,000 per child) and a tax credit of up to $6,000 for adoption of a child with special needs

For more information, see www.ssa.gov/legislation/legis_bulletin_082096.html or perform an Internet search for the law by name.

The Social Security Act (1935)

The Social Security program began in 1935 in the heart of the Great Depression. It was initially designed to help senior citizens when that group was suffering a poverty rate of 50 percent. It currently includes social welfare and social insurance programs that can help support disabled workers who are no longer able to earn their wages.

The Social Security program is supported through payroll taxes with contributions from both the employee and the employer. Those payroll tax rates are set by the Federal Insurance Contributions Act (FICA) and have been adjusted many times over the years. There are many programs currently under the control of the Social Security Act and its amendments. These include the following:

•  Federal old-age benefits (retirement)

•  Survivors benefits (spouse benefits, dependent children, and widow/widower benefits)

•  Disability insurance for workers no longer able to work

•  Temporary Assistance for Needy Families

•  Medicare Health Insurance for Aged and Disabled

•  Medicaid Grants to States for Medical Assistance Programs

•  Supplemental Security Income (SSI)

•  State Children’s Health Insurance Program (SCHIP)

•  Patient Protection and Affordable Care Act

There is currently a separate payroll deduction for Medicare Health Insurance, which is also funded by both the employee and employer. And the Patient Protection and Affordable Care Act is rolling out over the next few years and offers the opportunity to provide medical insurance coverage to a greater number of people.

A personal Social Security number is used as a tax identification number for federal income tax, including bank records, and to prove work authorization in this country. Social Security numbers can be used in completing Form I-9, which must be completed for every new employee on the payroll. Also required for the I-9 is proof of identity. For more information, see www.ssa.gov/history/35act.html or perform an Internet search for the law by name.

The Tax Reform Act (1986)

This law made extensive changes to the Internal Revenue Service tax code, including a reduction in tax brackets and all tax rates for individuals. Payroll withholdings were affected, many passive losses and tax shelters were eliminated, and changes were made to the alternative minimum tax computation. This is the law that required all dependent children to have Social Security numbers. That provision reduced the number of fraudulent dependent children claimed on income tax returns by 7 million in its first year. For HR professionals, answers to employee questions about the number of exemptions to claim on their Form W-4 are greatly influenced by this requirement for dependent Social Security numbers. For more information, see http://archive.org/stream/summaryofhr3838t1486unit/summaryofhr3838t1486unit_djvu.txt or perform an Internet search for the law by name.

The Taxpayer Relief Act (1997)

Congress wanted to give taxpayers a couple of ways to lower their tax payments during retirement, so the Taxpayer Relief Act was passed to create new savings programs called Roth IRAs and Education IRAs. Many individuals were able to achieve a better tax position through these tools. For more information, see www.gpo.gov/fdsys/pkg/BILLS-105hr2014enr/pdf/BILLS-105hr2014enr.pdf or perform an Internet search for the law by name.

The Trademark Act (1946)

This is the legislation that created federal protections for trademarks and service marks. Officially it was called the Lanham (Trademark) Act, and it set forth the requirements for registering a trademark or service mark to obtain those legal protections. HR people may well have a role to play in training employees in how to properly handle organizational trademarks and the policies that govern those uses. For more information, see www.uspto.gov/trademarks/law/tmlaw.pdf or perform an Internet search for the law by name.

The Unemployment Compensation Amendments (UCA) (1992)

This law established 20 percent as the amount to be withheld from payment of employee savings accounts when leaving an employer and not placing the funds (rolling over) into another tax-approved IRA or 401(k). For more information, see www.socialsecurity.gov/policy/docs/ssb/v56n1/v56n1p87.pdf or perform an Internet search for the law by name.

The Uniformed Services Employment and Reemployment Rights Act (USERRA) (1994)

USERRA provides instructions for handling employees who are in the reserves and receive orders to report for active duty. The law protects the employment, reemployment, and retention rights of anyone who voluntarily or involuntarily serves or has served in the uniformed services. It requires that employers continue paying for the employee’s benefits to the extent they paid for those benefits before the call to duty. It also requires that employers continue giving credit for length of service as though the military service was equivalent to company service. There are specific detailed parameters for how long an employee may wait to engage the employer in return-to-work conversations after being released from active military duty.

This law and its provisions cover all eight U.S. military services and other uniformed services. They are

•  Army

•  Navy

•  Air Force

•  Marines

•  Public Health Service Commissioned Corps

•  National Oceanic and Atmospheric Administration Commissioned Corps

•  Coast Guard

•  National Guard groups that have been called into active duty

For more information, see www.dol.gov/compliance/laws/comp-userra.htm or perform an Internet search for the law by name.

The Vietnam Era Veterans Readjustment Assistance Act (1974), as Amended by the Jobs for Veterans Act (JVA)

Current covered veterans include the following:

•  Disabled veterans

•  Veterans who served on active duty in the U.S. military during a war or campaign or expedition for which a campaign badge was awarded

•  Veterans who, while serving on active duty in the Armed Forces, participated in a U.S. military operation for which an Armed Forces service medal was awarded pursuant to Executive Order 12985

•  Recently separated veterans (veterans within 36 months from discharge or release from active duty)

These requirements apply to all federal contractors with a contract valued at $25,000 or more, regardless of the number of total employees.

This veteran support legislation requires all employers subject to the law to post their job openings with their local state employment service. These are the three exceptions to that requirement:

•  Jobs that will last 3 days or less

•  Jobs that will be filled by an internal candidate

•  Jobs that are senior executive positions

Affirmative action outreach and recruiting of veterans are required for federal contractors meeting the contract value threshold. For more information, see www.dol.gov/compliance/laws/comp-vevraa.htm or perform an Internet search for the law by name.

The Wagner-Peyser Act (1933), as Amended by the Workforce Investment Act (WIA) (1988)

The Wagner-Peyser Act created a nationwide system of employment offices known as Employment Service Offices. They were run by the U.S. Department of Labor’s Employment and Training Administration (ETA). These offices provided job seekers with assistance in their job search, assistance in searching jobs for unemployment insurance recipients, and recruitment services for employers.

The Workforce Investment Act created the “One Stop” centers within Employment Service Offices. The federal government contracts with states to run the Employment Service Offices and One Stop centers. Funds are allocated to states based on a complicated formula. For more information, see www.doleta.gov/programs/w-pact_amended98
.cfm or perform an Internet search for the law by name.

The Walsh-Healey Act (Public Contracts Act) (1936)

President Franklin Roosevelt signed this into law during the Great Depression. It was designed to assure the government paid a fair wage to manufacturers and suppliers of goods for federal government contracts in excess of $10,000 each. The provisions of the law included the following:

•  Overtime pay requirements for work done over 8 hours in a day or 40 hours in a week.

•  A minimum wage equal to the prevailing wage.

•  Prohibition on employing anyone under 16 years of age or a current convict.

•  The Defense Authorization Act (1968) later excluded federal contractors from overtime payments in excess of 8 hours in a day.

For more information, see www.dol.gov/compliance/laws/comp-pca.htm or perform an Internet search for the law by name.

The Work Opportunity Tax Credit (WOTC) (1996)

This law provides federal income tax credits to employers who hire from certain targeted groups of job seekers who face employment barriers. The amount of tax credit is adjusted from time to time and currently stands at $9,600 per employee.

Targeted groups include the following:

•  Qualified recipients of Temporary Assistance to Needy Families (TANF).

•  Qualified veterans receiving food stamps (referred to as Supplemental Nutrition Assistance Program [SNAP] today) or qualified veterans with a service-connected disability who

•  Have a hiring date that is not more than 1 year after having been discharged or released from active duty, or

•  Have aggregate periods of unemployment during the 1-year period ending on the hiring date that equals or exceeds 6 months

•  WOTC also includes family members of a veteran who received food stamps (SNAP) for at least a 3-month period during the 15-month period ending on the hiring date or a disabled veteran entitled to compensation for a service-related disability hired within a year of discharge or unemployed for a period totaling at least 6 months of the year ending on the hiring date.

•  Ex-felons hired no later than 1 year after conviction or release from prison.

•  Designated Community Resident—an individual who is between the ages of 18 and 40 on the hiring date and who resides in an Empowerment Zone, Renewal Community, or Rural Renewal County.

•  Vocational rehabilitation referrals, including Ticket Holders with an individual work plan developed and implemented by an Employment Network.

•  Qualified summer youth ages 16 through 17 who reside in an Empowerment Zone, Enterprise Community, or Renewal Community.

•  Qualified SNAP recipients between the ages of 18 and 40 on the hiring date.

•  Qualified recipients of Supplemental Security Income (SSI).

•  Long-term family assistance recipients.

These categories change from time to time.

In addition to these specific federal laws, there are laws dealing with payroll that HR professionals need to understand. While it is true that accounting people normally handle the payroll function in an employer’s organization, occasionally HR professionals get involved and have to work with accounting people to explain deductions and provide input about open enrollment for healthcare benefit programs, among other things. Those things can include garnishments, wage liens, savings programs, benefit premium contributions, and income tax, FICA, and Medicare withholdings. For more information, see www.gao.gov/new.items/d01329.pdf or perform an Internet search for the law by name.

The Labor Management Reporting and Disclosure Act (1959)

Finally, this law provides for the reporting and disclosure of certain financial transactions and administrative practices of labor organizations and employers to prevent abuses in the administration of trusteeships by labor organizations and to provide standards with respect to the election of officers of labor organizations. It created a Bill of Rights for members of labor organizations (29 U.S.C. 401–402; 411–415; 431–441; 461–466; 481–484; 501–505).

For more information, see www.dol.gov/olms/regs/statutes/lmrda-act.htm or perform an Internet search for the law by name.

Whistle-Blowing

It is important to highlight the issue of whistle-blowing. Protections against retaliation are embedded in various laws we cover in this chapter; laws with those provisions and protections include the Civil Rights Acts, OSHA, MSHA, the Sarbanes-Oxley Act, ADA, and more.

Whistle-blower laws usually apply to public-sector employees and employees of organizations contracting with the federal government or state governments. They are designed to protect individuals who publicly disclose information about corrupt practices or illegal activities within their employer’s organization. Often, such events occur when someone is mishandling money, contracts, or other assets. Construction projects not being built to specifications can result in whistle-blowing by governmental employees. Employees of financial services companies (banks, credit unions, stock brokerages, and investment firms) have been in the headlines during recent years. They uncovered and disclosed misbehavior among people in their companies and were protected under whistle-blower provisions of various laws. Whistle-blowers are protected from disciplinary action, termination, or other penalty. For more information, see www.osc.gov/documents/pubs/post_wb.htm or perform an Internet search for the law by name.

For FIFTEEN or More Employees

Once employers have added 15 or more employees to their payroll, it becomes necessary to comply with an additional 11 major federal laws.

The Americans with Disabilities Act (ADA) (1990), as Amended by the Americans with Disabilities Act Amendments Act (ADAAA) (2008)

Prior to this legislation, the only employees who were protected against employment discrimination were the ones working for the federal, state, or local government and federal government contractors. They were captured by the Rehabilitation Act. As a matter of fact, it was the Rehabilitation Act that was used as a model for developing the ADA. Five years after the Rehabilitation Act, the Developmental Disabilities Act of 1978 spoke specifically to people with developmental disabilities. It provided for federally funded state programs to assist people in that category of the population. The ADA had been first proposed in 1988, and it was backed by thousands of individuals around the country who had been fighting for rights of their family members, friends, and co-workers. They thought it was only appropriate for those people to have equal access to community services, jobs, training, and promotions. It was signed into law by President George H. W. Bush on July 26, 1990. It became fully effective for all employers with 15 or more workers on July 26, 1992.

Provisions and Protections

Title I—Employment—applies to employers with 15 or more workers on the payroll. Those employers may not discriminate against a physically or mentally disabled individual in recruitment, hiring, promotions, training, pay, social activities, and other privileges of employment. Qualified individuals with a disability are to be treated as other job applicants and employees are treated. If a job accommodation is required for a qualified individual to perform the assigned job, employers are required to provide that accommodation or recommend an alternative that would be equally effective. The interactive process between employers and employees should result in an accommodation or explanation about why making the accommodation would provide an undue hardship on the employer. Title I is enforced by the Equal Employment Opportunity Commission. Part of the interactive discussion about accommodation requests involves the employer investigating other accommodations that may be equally effective yet lower in cost or other resource requirements. Employers are not obligated to accept the employee’s request without alteration.

U.S. Supreme Court Interpretation of the ADA

There were several U.S. Supreme Court cases that interpreted the ADA very narrowly. They limited the number of people who could qualify as disabled under the Court’s interpretation of Congress’s initial intent. Reacting to those cases, Congress enacted the ADA Amendment Act in September 2008. It became effective on January 1, 2009.

ADA Amendments Act of 2008

Following the U.S. Supreme Court decisions in Sutton v. United Airlines⁶ and in Toyota Motor Manufacturing, Kentucky, Inc., v. William,⁷ Congress felt that the Court had been too restrictive in its interpretation of who qualifies as disabled. It was the intent of Congress to be broader in that definition. Consequently, Congress passed the ADA Amendments Act to capture a wider range of people in the disabled classification. A disability is now defined as “an impairment that substantially limits one or more major life activities, having a record of such an impairment, or being regarded as having such an impairment.” Although the words remain the same as the original definition, the Amendments Act went further. It said, when determining whether someone is disabled, there may be no consideration of mitigating circumstances. In the past, we used to say people who had a disability under control were not disabled. An employee with a prosthetic limb did everything a whole-bodied person could do. An employee with migraines that disappeared with medication wasn’t considered disabled. Under the old law, epilepsy and diabetes were not considered disabilities if they were controlled with medication. Now, because the law prohibits a consideration of either medication or prosthesis, they are considered disabilities. You can see that a great many more people are captured within the definition of disabled as a result of these more recent changes. The only specifically excluded condition is the one involving eye glasses and contact lenses. Congress specifically said having a corrected vision problem if eye glasses or contact lenses are worn may not constitute a disability under the law.

An individual can be officially disabled but quite able to do his or her job without an accommodation of any sort. Having more people defined as disabled doesn’t necessarily mean there will be more people asking for job accommodations. For more information, see www.eeoc.gov/laws/statutes/adaaa.cfm or perform an Internet search for the law by name.

“Substantially Limits”

Employers are required to consider as disabled anyone with a condition that “substantially limits,” but does not “significantly restrict,” a major life activity. Even though the limitation might be reduced or eliminated with medication or other alleviation, the treatment may not be considered when determining the limitations. So, people who use shoe inserts to correct a back problem or who take prescription sleeping pills may now be classified as disabled. The same might be said of people who are allergic to peanuts or bee stings. Yet there may be no need for any of them to request a job accommodation.

“Major Life Activities”

Caring for oneself, seeing, hearing, touching, eating, sleeping, walking, standing, sitting, reaching, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, interacting with others, and working all are considered “major life activities.” Also included are major bodily functions such as normal cell growth, reproduction, immune system, blood circulation, and the like. Some conditions are specifically designated as disabilities by the EEOC. They include diabetes, cancer, human immunodeficiency virus and acquired immunodeficiency syndrome (HIV/AIDS), multiple sclerosis (MS), cerebral palsy (CP), and cystic fibrosis (CF) because they interfere with one or more of our major life activities.

“Essential Job Function”

An essential job function is defined as “a portion of a job assignment that cannot be removed from the job without significantly changing the nature of the job.” An essential function is highly specialized, and the incumbent has been hired because he or she has special qualifications, skills, or abilities to perform that function, among others.

“Job Accommodation”

Someone with a disability doesn’t necessarily need a job accommodation. Remember that we select people and place them in jobs if they are qualified for the performance of the essential functions, with or without a job accommodation. Someone with diabetes may have the disease under control with medication and proper diet. No accommodation would be required. However, if it were essential that the employee had food intake at certain times of the day, there could be a legitimate request for accommodating that need. The employer might be asked to consistently permit the employee to have meal breaks at specific times each day.

Job accommodations are situationally dependent. First, there must be a disability and an ability to do the essential functions of the job. Next, there must be a request for accommodation from the employee. If there is no request for accommodation, no action is required by the employer. It is perfectly acceptable for an employer to request supporting documentation from medical experts identifying the disability. There might even be recommendations for specific accommodations, including those requested by the employee.

Once an accommodation is requested, the employer is obliged to enter into an interactive discussion with the employee. For example, an employee might ask for something specific, perhaps a new piece of equipment (a special ergonomic chair) that will eliminate the impact of disability on their job performance. The employer must consider that specific request. Employers are obligated to search for alternatives that could satisfy the accommodation request only when the specific request cannot be reasonably accommodated. This is the point where the Job Accommodation Network (JAN)⁸ can become a resource. It can often provide help for even questionable and unusual situations.

The employer must consider if making that accommodation would be an “undue hardship” considering all it would involve. You should note that most job accommodations carry a very low cost. Often they cost nothing. The larger an employer’s payroll headcount, the more difficult it is to fully justify using “undue hardship” as a reason for not agreeing to provide an accommodation. Very large corporations or governments have vast resources, and the cost of one job accommodation, even if it does cost some large dollar amount, won’t likely cause an undue hardship on that employer.

Recordkeeping Requirements

There is nothing in the Americans with Disabilities Act of 1990, or its amendments, that requires employers to create job descriptions. However, smart employers are doing that in order to identify physical and mental requirements of each job. Job descriptions also make it easy to identify essential job functions that any qualified individual would have to perform, with or without job accommodation. It is easier to administer job accommodation request procedures and to defend against false claims of discrimination when an employer has job descriptions that clearly list all of the job’s requirements. It also makes screening job applicants easier because it shows them in writing what the job will entail. Then, recruiters may ask, “Is there anything in this list of essential job functions that you can’t do with or without a job accommodation?”

If a job requires an incumbent to drive a delivery truck, driving would be an essential function of that job. A disability that prevented the incumbent from driving the delivery truck would likely block that employee from working—unless an accommodation could be found that would permit the incumbent to drive in spite of the disability.

People are sometimes confused about temporary suspension of duty being a permanent job accommodation. If that temporary suspension means the incumbent no longer is responsible for performing an essential job function, the job could not be performed as it was designed by the employer. It is not necessary for an employer to redesign job content to make a job accommodation. It is possible for such voluntary efforts to be made on behalf of an employee the organization wants to retain. Those situations are not job accommodations, however. They are job reassignments.

EEOC procedures prohibit employers from inviting job applicants to identify their disability status prior to receiving a job offer. Federal regulations related to affirmative action requirements for disabled workers¹ require contractors to invite job applicants to identify their status as disabled and then provide the same invitation to identify themselves as disabled once they have been hired. Federal contractors are also required to conduct a general survey of the entire employee population every 5 years (at a minimum) with an invitation to self-identify as disabled. At any time, employees are permitted to identify themselves as disabled to their employer.

An annual review of job description content is required under the EEOC guidelines. It is important to maintain accurate listings of essential job functions and physical and mental job requirements. An annual review will help assure that you always have current information in your job descriptions.

ADA Enforcement

The EEOC enforces Title I of the ADA. That agency will accept complaints of illegal discrimination based on mental or physical disability. Once an employee has established that he or she is disabled and claims that he or she has been prohibited some employment benefit because of the disability (hiring, promotion, access to training, or inappropriate termination), there is a prima facie case (meaning it is true on its surface). Then the EEOC notifies the employer of the complaint and asks for the employer’s response. This process can work back and forth from employer response to employee response for several cycles. Ultimately, the agency will determine that the case has cause (is a valid claim of discrimination), the case has no cause (the claim cannot be substantiated), or the case should be closed for administrative purposes (the employee asks for the case to be closed, or time for an investigation has expired). Each of those three outcomes is followed by a “Right to Sue” letter, allowing the employee to get an attorney and file a lawsuit in federal court seeking remedies under the law.⁹

Once a complaint (called a charge of illegal discrimination) is filed with the EEOC, employers are instructed to cease talking about that issue directly with their employee. All conversation about the complaint must be directed through the EEOC. Unfortunately, that complicates the communication process, and it provides a strong incentive for employers to resolve complaints internally before they reach the formal external complaint stage. Working directly with an employee on the subject of accommodation, or any other personnel issue, is preferable to working through an agent such as the EEOC. For more information, see www.ada.gov/ or perform an Internet search for the law by name.

The Civil Rights Act (Title VII) (1964)

Although this was not the first federal civil rights act in the country,¹⁰ it came to us through a great deal of controversy. It was signed into law by President Lyndon Johnson on July 2, 1964. Following the assassination of President John F. Kennedy the previous November, President Johnson took it upon himself to carry the civil rights banner and urge Congress to pass the law.

For more information, see www.eeoc.gov/laws/statutes/titlevii.cfm or perform an Internet search for the law by name.

Employment Protections

Title VII of the act speaks to employment discrimination and cites five protected classes of people. Before the final days when Congress was discussing the issues, there were only four protected classes listed: Race, Color, Religion, and National Origin. There was a great deal of opposition in the Senate from Southern states. They decided that they would strategically add another protected category to the list. They thought that if “sex” was added to the list, the bill would surely fail because no one would vote for having women protected in the workplace. Well, it passed…with all five protected categories in place. From that time forward, when making employment decisions, it has been illegal to take into account any employee’s membership in any of the protected classifications.

Penalties for Violations

Penalties can be assessed by a federal court. Protocol requires a complaint be filed with the Equal Employment Opportunity Commission, the administrative agency tasked with the duty to investigate claims of illegal employment discrimination. Regardless of the outcome of that administrative review, a “Right to Sue” letter is given to the complaining employee so the case can move forward to federal court if that is what the employee wants to do next.

Penalties that can be assessed if an employer is found to have illegally discriminated include the following:

•  Actual damages Costs for medical bills, travel to medical appointments, equipment loss reimbursement, lost wages (back pay), lost promotional increase, lost future earnings (front pay). The limitation is usually 2 years into the past and unlimited number of years into the future.

•  Compensatory damages Dollars to reimburse the victim for “pain and suffering” caused by this illegal discrimination.

•  Punitive damages Dollars assessed by the court to “punish” the employer for treatment of the employee that was egregious in its nature. This is usually thought of as “making an example” of one case so as to send a message to other employers that doing such things to an employee or job applicant will be severely punished.

The Civil Rights Act (1991)

This act modified the 1964 Civil Rights Act in several ways:

•  It provided for employees to receive a jury trial if they wanted. Up to this point, judges always heard cases and decided them from the bench.

•  It established requirements for any employer defense.

•  It placed a limitation on punitive damage awards by using a sliding scale depending on the size of the employer organization (payroll headcount):

•  For employers with 15 to 100 employees, damages are capped at $50,000.

•  For employers with 100 to 200 employees, damages are capped at $100,000.

•  For employers with 201 to 500 employees, damages are capped at $200,000.

•  For employers with more than 500 employees, damages are capped at $300,000.

For more information, see www.eeoc.gov/eeoc/history/35th/1990s/civilrights.html or perform an Internet search for the law by name.

The Drug-Free Workplace Act (1998)

This legislation requires some employers to maintain a drug-free workplace. Employee compliance must be assured by subject employers.

Provisions and Protections

This law applies to federal contractors and all organizations receiving grants from the federal government. If you are covered, you are required to assure that all the employees working on the contract or grant are in compliance with its drug-free requirements. Covered employers are required to have a drug-free policy that applies to its employees. To determine that an employer is in compliance with the requirements, drug testing is usually performed on employees and applicants who have received a job offer. Random drug testing is also used in some organizations to assure employees subject to the law or policy are continuing to comply with the requirements. Any federal contractor under the jurisdiction of the Office of Federal Contract Compliance Programs (OFCCP) in the Department of Labor must comply with this legislation.

Employee notification about the policy must include information about the consequences of failing a drug test. Whenever an employee has been convicted of a criminal drug violation in the workplace, the employer must notify the contracting or granting agency within 10 days.

Recordkeeping Requirements

Covered employers are required to publish a written policy statement that clearly covers all employees or just those employees who are associated with the federal contract or grant. Each covered employee must be given a copy of the policy statement, and it is a good idea, although it is not required, to have employees sign for receipt of that policy statement. The statement must contain a list of prohibited substances. At a minimum it must cite controlled substances.¹¹

Some employers choose to include in the policy prohibition of alcohol and prescription drug misuse, although that is not a requirement. Subject employers must also establish a drug-free awareness training program to make employees aware of the dangers of drug abuse in the workplace; the policy of maintaining a drug-free workplace; any available drug counseling, rehabilitation, and employee assistance programs; and the penalties that may be imposed on employees for drug abuse violations. Records should be maintained showing each employee who received the training and the date it occurred.

Drug-Free Workplace Act Enforcement

Federal contractors under the jurisdiction of the OFCCP will find that the agency requires proof of compliance when it conducts a general compliance evaluation of affirmative action plans. Any employee who fails a drug test must be referred to a treatment program or given appropriate disciplinary action. Care should be given to treating similar cases in the same way. It is fairly easy to be challenged under Title VII for unequal treatment based on one of the Title VII protected groups.

Each federal agency responsible for contracting or providing grants is also responsible for enforcing the Drug-Free Workplace Act requirements. These responsibilities are spelled out in the Federal Acquisition Regulation (FAR). Failing to maintain a drug-free workplace can result in the following¹²:

•  Suspension of payments for contract or grant activities

•  Suspension or cancellation of grant or contract

•  Up to 5 years’ prohibition for any further contracts or grants

For more information, see www.dol.gov/elaws/asp/drugfree/require.htm or perform an Internet search for the law by name.

The Equal Employment Opportunity Act (EEOA) (1972)

The EEOA amended the Civil Rights Act of 1964 by redefining some terms. It also required a new employment poster for all subject work locations explaining that “EEO is the Law.”

For more information, see www.eeoc.gov/eeoc/history/35th/thelaw/eeo_1972.html or do an Internet search for the name of the law.

The Genetic Information Nondiscrimination Act (GINA) (2008)

In general terms, GINA prohibits employers from using genetic information to make employment decisions. This legislation was brought about by insurance companies using genetic information to determine who would likely have expensive diseases in the future. That information allowed decisions to exclude them from hiring or enrollment in medical insurance programs. With the implementation of this law, those considerations are no longer legal.

For more information, see www.eeoc.gov/laws/statutes/gina.cfm or perform an Internet search for the law by name.

Guidelines on Discrimination Because of Sex (1980)

The Equal Employment Opportunity Commission (EEOC) published these guidelines to help employers understand what constituted unwanted behavior and harassment. They were issued long before the U.S. Supreme Court considered the leading cases on sexual harassment. This is about the only thing at the time that employers were able to turn to for help in managing the problem of sexual harassment in the workplace.

The Lilly Ledbetter Fair Pay Act (2009)

This was the first piece of legislation signed by President Barack Obama after he was inaugurated the 44th president of the United States. It was passed in reaction to the U.S. Supreme Court decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc., 550 U.S. 618 (2007).

This law amends the Civil Rights Act of 1964 and states that the clock will begin running anew each time an illegal act of discrimination is experienced by an employee. In Lilly Ledbetter’s situation, her pay was less than that for men doing the same job. The old law didn’t permit her to succeed in her complaint of discrimination because she failed to file 20 years earlier on the first occasion of her receiving a paycheck for less than her male counterparts. Under the new law, the 180-day statute of limitations for filing an equal-pay lawsuit regarding pay discrimination resets with each new paycheck affected by that discriminatory action. For more information, see www.eeoc.gov/laws/statutes/epa_ledbetter.cfm or perform an Internet search for the law by name.

The Pregnancy Discrimination Act (1978)

This law modified (amended) the Civil Rights Act of 1964. It defined pregnancy as protected within the definition of “sex” for the purpose of coverage under the Civil Rights Act. It also specifically said that no employer shall illegally discriminate against an employee because of pregnancy. It defines pregnancy as a temporary disability and requires accommodation on the job if it is necessary. It guarantees the employee rights to return to work to the same or similar job with the same pay following her pregnancy disability. For more information, see www.eeoc.gov/laws/types/pregnancy.cfm or perform an Internet search for the law by name.

The Uniform Guidelines on Employee Selection Procedures (1978)

This set of regulations is often overlooked by employers and HR professionals alike. Details can be found in 41 C.F.R. 60-3. For covered employers with 15 or more people on the payroll, this set of requirements is essential in preventing claims of discrimination.

There are two types of illegal employment discrimination: adverse or disparate treatment and adverse or disparate impact. The latter almost always results from seemingly neutral policies having a statistically adverse impact on a specific group of people. To avoid illegal discrimination, the guidelines require that all steps in a hiring decision be validated for the job being filled. Validity of a selection device can be determined through a validity study or by applying a job analysis to demonstrate the specific relationship between the selection device and the job requirements. Selection devices include things such as a written test, an oral test, an interview, a requirement to write something for consideration, and a physical ability test.

Employers can get into trouble when they use selection tools that have not been validated for their specific applications. For example, buying a clerical test battery of written tests and using it to make selection decisions for administrative assistants as well as general office clerks may not be supportable. Only a validity analysis will tell for sure. What specific validation studies have been done for the test battery by the publisher? Any publisher should be able to provide you with a copy of the validation study showing how the test is supposed to be used and the specific skills, knowledge, or abilities that are analyzed when using it. If you can’t prove the test measures things required by your job content, don’t use the test. According to the Uniform Guidelines, “While publishers of selection procedures have a professional obligation to provide evidence of validity which meets generally accepted professional standards, users are cautioned that they are responsible for compliance with these guidelines.”¹³ That means the employer, not the test publisher, is liable for the results. For more information, see www.eeoc.gov/policy/docs/factemployment_procedures.html or perform an Internet search for the law by name.

For TWENTY or More Employees

The next threshold for employers occurs when they reach a headcount of 20 employees. At that point another four major federal laws begin their influence on the organization.

The Age Discrimination in Employment Act (ADEA) (1967), as Amended in 1978, 1986

When this law was first passed, it specified the protected age range of 40 to 70. Anyone younger than 40 or older than 70 was not covered for age discrimination in the workplace. Amendments were made a few years later that removed the upper limit. Today, the law bans employment discrimination based on age if the employee is 40 years old or older. Remedies under this law are the same as under the Civil Rights Act. They include reinstatement, back pay, front pay, and payment for benefits in arrears. Some exceptions to the “unlimited” upper age exist. One example is the rule that airline pilots may not fly commercial airplanes after the age of 65.¹⁴ For more information, see www.eeoc.gov/laws/statutes/adea.cfm or perform an Internet search for the law by name.

The American Recovery and Reinvestment Act (ARRA) (2009)

The thrust of this legislation was to create government infrastructure projects such as highways, buildings, dams, and such. It was an attempt to find ways to re-employ many of the workers who had become unemployed since the great recession began in 2007. There was a provision that provided partial payment of COBRA (see the Consolidated Omnibus Budget Reconciliation Act, covered next) premiums for people who still had not found permanent job placement. It applied to individuals who experienced involuntary terminations prior to May 31, 2010.

ARRA also modified HIPAA privacy rules. It applies HIPAA’s security and privacy requirements to business associates. Business associates are defined under ARRA as individuals or organizations that transmit protected medical data, store that data, process that data, or in any other way have contact with that private medical information. All parties are responsible for proper handling and compliance with the HIPAA rules. For more information, see www.irs.gov/uac/The-American-Recovery-and-Reinvestment-Act-of-2009-Information-Center or perform an Internet search for the law by name.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) (1986)

This law requires employers with group health insurance programs to offer terminating employees the opportunity to continue their health plan coverage after they are no longer on the payroll or no longer qualify for benefits coverage because of a change in employment status, i.e., reduction in hours. The cost must be at group rates, and the employer can add a small administrative service charge. It turns out that many employers turn these programs over to vendors who administer the COBRA benefits for former employees. They send out billing statements and provide collection services. Two percent is the maximum administrative overhead fee that can be added. The total cost of COBRA premiums and administrative fees is paid by employees participating in COBRA. The duration of coverage is dependent on some variables, so it may be different from one person to another. For more information, see www.dol.gov/dol/topic/health-plans/cobra.htm or perform an Internet search for the law by name.

The Older Workers Benefit Protection Act (OWBPA) (1990)

In the 1980s, it was common for employers, particularly large employers, to implement staff reduction programs as a means of addressing expenses. Often those programs were targeted at more senior workers because, generally speaking, their compensation was greater than that of new employees. Reducing one senior worker could save more money than the reduction of a more recently hired worker. Congress took action to prevent such treatment based on age when it passed this law.

The key purposes of the Older Workers Benefit Protection Act (OWBPA) are to prohibit an employer from the following:

•  Using an employee’s age as the basis for discrimination in benefits

•  Targeting older workers during staff reductions or downsizing

•  Requiring older workers to waive their rights without the opportunity for review with their legal advisor

For more information, see www.eeoc.gov/eeoc/history/35th/thelaw/owbpa.html or perform an Internet search for the law by name.

For FIFTY to ONE HUNDRED or More Employees

Once the employee headcount reaches these higher levels, additional legal obligations become effective for employers. Some of them apply only if the employer is subject to affirmative action requirements as a federal contractor.

Executive Order 11246: Affirmative Action (1965)

This is the presidential order that created what we now know as employment-based affirmative action. In 1965, President Lyndon B. Johnson was past the days when he approved the Civil Rights Act, and he was in the process of examining how it was being implemented around the country by employers. He concluded that the law was pretty much being ignored. He needed something to stimulate implementation of the employment provisions in the Civil Rights Act, Title VII. His staff suggested they require affirmative action programs from federal contractors. A new program was born. President Johnson said that if a company wanted to receive revenue by contracting with the federal government, it would have to implement equal employment opportunity and establish outreach programs for minorities and women. At the time, minorities and women were being excluded from candidate selection pools. If they couldn’t get into the selection pools, there was no way for them to be selected.

So, affirmative action programs were created. Outreach and recruiting were the main parts of these programs. Analysis of the incumbent workforce, the available pool of qualified job candidates, and the training of managers involved in the employment selection process all contributed to a slow movement toward full equality for minorities and women.

The Office of Federal Contract Compliance Programs (OFCCP) is the law enforcement agency that currently has responsibility for enforcing the executive order along with other laws. Federal contractors must meet several conditions in return for the contracting privilege. One is the requirement to abide by a set of rules known as the Federal Acquisition Regulation (FAR). In addition, there is affirmative action for the disabled and veterans. Any business that doesn’t want to abide by these requirements can make the business decision to abandon federal revenues and contracts. If you want the contracts, you also have to agree to the affirmative action requirements.¹⁵ For more information, see www.dol.gov/ofccp/regs/statutes/eo11246.htm or perform an Internet search for the executive order by name.

The Family and Medical Leave Act (FMLA) (1993), Expanded 2008, 2010

In general, the Family and Medical Leave Act sets in place new benefits for some employees in the country. If their employer has 50 or more people on the payroll, then they are required to permit FMLA leave of absence for their workers. FMLA provides for leaves lasting up to 12 weeks in a 12-month period, and it is unpaid unless the employer has a policy to pay for the leave time. The 12-month period begins on the first day of leave. A new leave availability will occur 12 months from the date the first leave began. During the leave, it is an obligation of the employer to continue paying any benefit plan premiums that the employer would have paid if the employee had remained on the job. If there is a portion of the premium for health insurance that is normally paid by the employee, that obligation for co-payment continues during the employee’s leave time. The 12 weeks leave may be taken in increments of 1 day or less.

To qualify, employees must have more than 1 year of service. The leave is authorized to cover childbirth or adoption; to care for a seriously ill child, spouse, or parent; or in case of the employee’s own serious illness. The employee is guaranteed return to work on the same job, at the same pay, under the same conditions as prior to the leave of absence.

There are provisions for “Military Caregiver Leave” lasting up to 26 weeks of unpaid leave of absence for employees with family members needing care due to a military duty–related injury or illness. The 26-week limit renews every 12 months. The law provides for “National Guard and Military Reserve Family Leave.” Employees who are family members of National Guard or Military Reservists who are called to active duty may take FMLA leave to assist with preparing financial and legal arrangements and other family issues associated with rapid deployment or post-deployment activities. An employer may agree to any nonlisted condition as a qualifier for FMLA leave as well.

FMLA provides for “Light Duty Assignments.” It clarifies that “light duty” work does not count against an employee’s FMLA leave entitlement. It also provides that an employee’s right to job restoration is held in abeyance during the light duty period. An employee voluntarily doing light duty work is not on FMLA leave.

There is an employment poster requirement. The notice must be posted at each work location where employees can see it without trouble. A “Medical Certification Process” is part of the new provisions. DOL regulations have specified who may contact the employee’s medical advisor for information, written or otherwise, and specifically prohibits the employee’s supervisor from making contact with the employee’s medical advisor.

Specific prohibitions are made against illegal discrimination for an employee taking advantage of the benefits offered under this law. These provisions are enforced by the EEOC. For more information, see www.dol.gov/whd/fmla/ or perform an Internet search for the law by name.

The Mental Health Parity Act (MHPA) (1996)

This legislation requires health insurance issuers and group health plans to adopt the same annual and lifetime dollar limits for mental health benefits as for other medical benefits. For more information, see www.dol.gov/ebsa/mentalhealthparity/ or perform an Internet search for the law by name.

The Mental Health Parity and Addiction Equity Act (MHPAEA) (2008)

This is an amendment of the Mental Health Parity Act of 1996. It requires that plans that offer both medical/surgical benefits and mental health and/or substance abuse treatment benefits provide parity between both types of benefits. All financial requirements (for example, deductibles, copayments, coinsurance, out-of-pocket expenses, and annual limits) and treatment requirements (for example, frequency of treatment, number of visits, and days of coverage) must be the same for treatment of both mental and physical medical problems. For more information, see www.dol.gov/ebsa/newsroom/fsmhpaea
.html or perform an Internet search for the law by name.

The National Defense Authorization Act (2008)

This is the origin of benefit provisions under FMLA for leaves of absence due to military reasons. Qualifying events include notice of deployment, return from deployment, and treatment for an injury sustained while on deployment. The provision is for up to 26 weeks, which can be taken in increments of a day or less if, for example, treatment is required for a service-related injury. For more information, see www.dol.gov/whd/fmla/NDAA_fmla.htm or perform an Internet search for the law by name.

The Patient Protection and Affordable Care Act (PPACA) (2010)

Signed into law by President Barack Obama on March 23, 2010, this law is commonly referred to as the Affordable Care Act. It has created health insurance trading centers in each state where employees and those who are unemployed can shop for health insurance coverage. These trading centers are the American Health Benefit Exchanges and Small Business Health Options Program (SHOP). Individuals and business owners of organizations with fewer than 100 workers can purchase insurance through these exchanges.

It applies to all employers with 50 or more full-time workers on the payroll. Employers with fewer than 50 full-time workers are exempt from coverage under the law. Effective January 1, 2014, covered employers must either provide minimum health insurance coverage to their full-time employees or face a fine of $2,000 per employee, excluding the first 30 from the assessment. Employers with fewer than 25 employees will receive a tax credit if they provide health insurance to their workers. In 2014, that credit will amount to 50 percent of the employer’s contribution to the employee’s healthcare program, if the employer pays at least that amount for insurance costs. A full credit is available for employers with fewer than 10 workers earning an average annual wage of less than $25,000. The credit will last for 2 years. For more information, see www.dol
.gov/ebsa/healthreform/ or perform an Internet search for the law by name.

Executive Order 13706: Paid Sick Leave for Federal Contractors (2015)

Federal contractors are directed to provide up to 56 hours of paid sick leave annually. The leave is accrued at the rate of an hour for every 30 hours worked. It may be carried over from year to year. For more information, see https://www.gpo.gov/fdsys/pkg/FR-2015-09-10/pdf/2015-22998.pdf or perform an Internet search for the executive order by number.

For ONE HUNDRED or More Employees

The final major threshold for employers is reached when the payroll reaches 100 employees. At that time employers become subject to the WARN Act and are required to submit annual reports to the government summarizing their race and sex demographics.

The Worker Adjustment and Retraining Notification (WARN) Act (1988)

This was the first attempt by Congress to involve local communities early in the private sector’s downsizing process. It also prevented employers from just shutting the door and walking away without any worker benefits. It applies to all employers with 100 or more full-time workers at a single facility. The law specifies a qualifying employer to be one that has 100 or more employees who in the aggregate work at least 4,000 hours per week (exclusive of hours of overtime).

Definitions

The term plant closing refers to the permanent or temporary shutdown of a single site of employment, or one or more facilities or operating units within a single site of employment, if the shutdown results in an employment loss at the single site of employment during any 30-day period for 50 or more employees excluding any part-time employees.

The term mass layoff refers to a reduction in force that is not the result of a plant closing and results in an employment loss at the single site of employment during any 30-day period for at least 500 employees to be laid off from a workforce of 500 or more or when at least 33 percent of the workforce (excluding any part-time employees) are going to be removed from the payroll in a layoff where there are a total of 50 to 499 workers before the layoff.

Required Actions

The law requires 60 days’ advance notice to employees of plant closing or mass layoffs. Any employment loss of 50 or more people, excluding part-time workers, is considered a trigger event to activate the requirements. Notification of public officials in the surrounding community in addition to notification of employees are requirements. The local community leaders must be informed and invited to participate in the process of finding new jobs for laid-off workers. There is a provision that says an employer can pay 60 days’ separation allowance if it gives no notice to workers who will be terminated.

Exemptions to Notice Requirement

Notice is not required, regardless of the size of layoff, if the layoff, downsizing, or terminations result from the completion of a contract or project that employees understood would constitute their term of employment. It is not uncommon for workers to be hired in a “term” classification that designates them as employees for the life of a project. If they understand that from the beginning of their employment, their termination would not trigger the WARN Act.

WARN is not triggered in the following cases:

•  In the event of strikes or lockouts that are not intended to evade the requirements of this law.

•  In the event the layoff will be for less than 6 months.

•  If state and local governments are downsizing. They are exempt from the notice requirement.

•  In the event that fewer than 50 people will be laid off or terminated from a single site.

•  If 50 to 499 workers lose their jobs and that number is less than 33 percent of the active workforce at the single site.

For more information, see www.dol.gov/compliance/laws/comp-warn.htm or perform an Internet search for the law by name.

For Federal Government Employees

The federal government is subject to some of the same laws as the private-sector employers. Yet, there are additional obligations that government employers have. Some of those obligations stem from the United States Constitution. Others come from the following laws.

The Civil Service Reform Act (1978)

This legislation eliminated the U.S. Civil Service Commission and created three new agencies to take its place:

•  The Office of Personnel Management (OPM) This is the executive branch’s human resource department. It handles all HR issues for agencies reporting to the U.S. president.

•  The Merit Systems Protection Board (MSPB) This part of the law prohibits consideration of marital status, political activity, or political affiliation in dealing with federal civilian employees. It also created the Office of Special Counsel, which accepts employee complaints and investigates and resolves them.

•  The Federal Labor Relations Authority (FLRA) This is the agency that enforces federal civilian employee rights to form unions and bargain with their agencies. It establishes standards of behavior for union officers, and these standards are enforced by the Office of Labor-Management Standards in the U.S. Department of Labor.

For more information, see www.eeoc.gov/eeoc/history/35th/thelaw/civil_service_reform-1978.html or perform an Internet search for the law by name.

The Congressional Accountability Act (1995)

Until this law was implemented, the legislative branch of the government was exempt from nearly all employment-related requirements that applied to other federal agencies and private employers. This law requires Congress and its affiliated agencies to abide by 12 specific laws that already applied to other employers, in and out of government.

•  Americans with Disabilities Act of 1990

•  Age Discrimination in Employment Act of 1967

•  Employee Polygraph Protection Act of 1988

•  Federal Service Labor-Management Relations Statute

•  Rehabilitation Act of 1973

•  Civil Rights Act of 1964 (Title VII)

•  Fair Labor Standards Act of 1938

•  Family and Medical Leave Act of 1993

•  Occupational Safety and Health Act of 1970

•  Veterans Employment Opportunities Act of 1998

•  Worker Adjustment and Retraining Notification Act of 1989

•  Occupational Safety and Health Act of 1970

For more information, see www.compliance.gov/publications/caa-overview/ or perform an Internet search for the law by name.

The False Claims Act (1863)

During the Civil War, people were selling defective food and arms to the Union military. This law, sometimes referred to as the Lincoln Law, prohibits such dishonest transactions. It prohibits making and using false records to get those claims paid. It also prohibits selling the government goods that are known to be defective. For HR professionals today, it is wise to train all employees about the need to avoid creating records that are inaccurate or, even worse, fictitious. Doing things that are illegal, just because the boss says you should, will still be illegal. Employees need to understand that concept.

For more information, see www.justice.gov/civil/docs_forms/C-FRAUDS_FCA_Primer.pdf or perform an Internet search for the law by name.

The Homeland Security Act (2002)

This cabinet-level organization (Department of Homeland Security) was created by Congress and President George W. Bush to consolidate security efforts related to protecting U.S. geography. Immigration and Customs Enforcement (ICE) is part of this department. The E-Verify system resides here. Used by federal contractors as part of their affirmative action obligations and other private employers on a voluntary basis, the system is intended to assist in rapid verification of Social Security numbers (SSNs) and confirm that the individual attached to the SSN has a valid right to work in this country. For more information, see https://www.dhs.gov/homeland-security-act-2002 or perform an Internet search for the law by name.

The Privacy Act (1974)

This law provides that governmental agencies must make known to the public their data collection and storage activities and must provide copies of pertinent records to the individual citizen when requested—with some specific exemptions. Those exemptions include law enforcement, congressional investigations, census use, “archival purposes,” and other administrative purposes. In all, there are 12 statutory exemptions from disclosure requirements. If employees are concerned about employers using their Social Security numbers in records sent to the government, this act ensures privacy. Although such private information is required by the government, the government is prohibited from releasing it to third parties without proper authorization or court order. For more information, see www.justice.gov/opcl/privstat.htm or perform an Internet search for the law by name.

The USA PATRIOT Act (2001)

The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act was passed immediately following the September 11, 2001, terrorist attacks in New York City and at the Pentagon in Virginia. It gives the government authority to intercept wire, oral, and electronic communications relating to terrorism, computer fraud, and abuse offenses. It also provides the authorization for collecting agencies to share the information they collect in the interest of law enforcement. This law can have an impact on private-sector employers in the communications industry. It can also have an impact on any employer when the government asks for support to identify and track “lone wolves” suspected of terrorism without being affiliated with known terrorist organizations. HR professionals may find themselves involved in handling the collection and release of personal, confidential information about one or more employees. When legal documents such as subpoenas and court orders are involved, it is always a good idea to have the organization’s attorney review them before taking any other action. For more information, see www.justice.gov/archive/ll/highlights.htm or perform an Internet search for the law by name.

Whistle-Blower Laws

Many conditions will activate protection for federal employees when they “blow the whistle” on their federal employer. A comprehensive report was prepared by the U.S. Merit Systems Protection Board in 2010 that explains these protections. For more information, see http://www.mspb.gov/netsearch/viewdocs.aspx?docnumber=557972&version=559604 or do an Internet search for the report.

Employment Visas for Foreign Nationals

Under some circumstances, it is possible for people from other countries to come work in the United States. There are several classifications of workers that can be used depending on the type of work to be done and the level of responsibilities.

E Nonimmigrant Visas

There are two types of E Nonimmigrant Visas, E-1 Treaty Traders and E-2 Treaty Investors. For more information on E Nonimmigrant Visas, see www.uscis.gov/portal/site/uscis.

E-1 Treaty Traders

The individual must be a citizen of the treaty country; there must be substantial trade; the trade must be principally with the treaty country; the individual must have executive, supervisory, or essential skills; and the individual must intend to depart the United States when the trading is completed.

E-2 Treaty Investors

The individual must be a citizen of the treaty country and be invested personally in the enterprise. The business must be a bona fide enterprise and not marginal, and the investment must be substantial. E-2 employees must have executive, supervisory, or essential skills, and E-2 investors must direct and develop the enterprise. The E-2 investor must depart the United States when the investment is concluded.

H Visas

These are visas available to employers and employees for specialized talent or educational requirements.

H1-B Special Occupations and Fashion Models

These visas require a bachelor’s or higher degree or its equivalent. The job must be so complex that it can be performed only by a person with the degree. The employer normally requires a degree or its equivalent for this job. Fashion models also fall into this category.

H1-C Registered Nurse Working in a Health Professional Shortage Area

This requires a full and unrestricted nursing license in the country where your nursing education was obtained. Or, you must have received your nursing education and license in the United States. It also requires that you have appropriate authorization from the U.S. State Board of Nursing to practice within the United States. H1-C requires that you have passed the examination given by the Commission on Graduates for Foreign Nursing Schools (CGFNS) or have a full and unrestricted license to practice as a registered nurse in the state where you will work.

H-2A Temporary Agricultural Workers

The employer must be able to demonstrate that there are not sufficient U.S. workers who are able, willing, qualified, and available to do the temporary seasonal work. The employer must also show that the employment of H-2A workers will not adversely affect the wages and working conditions of similarly employed U.S. workers.

H-2B Temporary NonAgricultural Workers

The employer must show that there are not enough U.S. workers who are able, willing, qualified, and available to do the temporary work and that the employment of H-2B workers will not adversely affect the wages and working conditions of similarly employed U.S. workers. The employer must also show that the need for the prospective worker’s services is temporary, regardless of whether the underlying job can be described as temporary.

H-3 Nonimmigrant Trainee

To qualify, employees must be trainees receiving training in any field of endeavor, other than graduate medical education, that is not available in their home country. Or, they must be a Special Education Exchange Visitor who will participate in a special education training program focused on the education of children with physical, mental, or emotional disabilities.

L-1 Intracompany Transferee

This allows a qualifying organization to move an employee from another qualifying country into the United States for a temporary assignment either that is managerial in nature or that requires specialized knowledge.

L1-A Managers and Executives

These are intracompany transferees coming to the United States to work in a managerial or executive capacity. The maximum stay in the United States allowed under this visa is 7 years.

Specialized Knowledge

This is someone with specialized knowledge of the employer’s product, service, research, equipment, techniques, management, or other interests and its application in international markets, or an advanced level of knowledge or expertise in the organization’s processes and procedures. An L1-B visa holder may stay in the United States for only 5 years.

O-1 Alien of Extraordinary Ability in Arts, Science, Education, Business, Athletics

These people have a level of expertise indicating that they are among the small percentage who have risen to the top of their field of endeavor. Alternatively, they represent extraordinary achievement in motion-picture and television productions, or they have extraordinary ability and distinction in the arts.

P Visa Categories

There are seven variations of athletics-based or art-based visas:

•  P1-A Individual Athletes or Athletic Teams

•  P1-B Entertainment Groups

•  P1-S Essential Support needed for P1-A or P1-B

•  P2 Artist or Entertainer Under a Reciprocal Exchange Program

•  P2-S Essential Support for P2

•  P3 Artist or Entertainer Under a Culturally Unique Program

•  P3-S Essential Support for P3

EB Employment-Based Visas

There are five levels of employment-based visas. They are prioritized so that once the first-level immigrant applicants are processed, the next level of priority will be considered. That will continue until the maximum allotment of visas is reached. In recent years, about 140,000 employment-based visas were permitted each year.

EB-1 Alien of Extraordinary Ability

The employer must demonstrate that the alien has extraordinary ability in the sciences, arts, education, business, or athletics, which has been demonstrated by sustained national or international acclaim and whose achievements have been recognized in the field through extensive documentation. It must also be shown that the work to be done in the United States will continue in the individual’s area of extraordinary ability. It shall also be shown how the alien’s entry into this country will benefit the United States; 28.6 percent of the total employment-based visas are allocated to this category.

EB-2 Alien of Extraordinary Ability

This is a classification that applies to any job that requires advanced degrees and persons of exceptional ability; 28.6 percent of the employment-based visas are allocated to this category.

EB-3 Skilled Workers

This category applies to professionals and even unskilled workers who are sponsored by employers in the United States; 28.6 percent of the employment-based visas are allocated to this category.

EB-4 Certain Special Immigrants

Included here are some broadcasters, ministers of religion, employees or former employees of the United States government, Iraqi or Afghan interpreters and translators, and other similar workers; 7.1 percent of the employment-based visas are allocated to this category.

EB-5 Immigrant Investors

These are people who will create new commercial enterprises in the United States that will provide job creation; 7.1 percent of the employment-based visas are allocated to this category.

Chapter Review

While this chapter is not meant to be a comprehensive statement of each law, studying and learning these laws will help you understand the basics as you perform your professional human resource responsibilities. As you read through the other chapters in this book, it’s important to remember that one or more of these laws will be the underlying basis for the HR Certification Institute’s (HRCI’s) subject matter. Additionally, while using this chapter as a reference guide in your day-to-day application as an HR professional, please also consult the statutes and regulations themselves via the URLs we have provided or perform an Internet search for the topic by name. A thorough understanding of the various laws and regulations that impact the employment relationship will enhance your ability to protect your organization in matters involving employment and employee relations.

Questions

The following are all questions about U.S. laws and regulations concerning employee management.

1. John, a new employee, has just arrived at the orientation program where everyone completes their payroll forms and signs up for healthcare benefits. He brings his W-4 form to you and says he isn’t subject to payroll withholding because he pays his taxes directly each quarter. What is your response?

A. “That’s okay. We won’t process a W-4 form for you. We will give you a Form 1099.”

B. “I’ll check with the accounting department to find out whether you can do that.”

C. “Unfortunately, all employees are subject to payroll tax withholding.”

D. “If you can show me a W-10 form you have submitted to the IRS, we can block your paycheck withholding.”

2. The Wagner-Peyser Act protects employees who are:

A. Unemployed

B. Injured on the job

C. Unable to work because of pregnancy

D. Have two or more jobs

3. Mary has had a bad encounter with her supervisor, Henry. That evening after getting home from work, she pulls out her computer and sends a blistering blog post to her Facebook page. She names her company and her supervisor. She calls him unfair, pigheaded, and without principles. What can the company do about her posting?

A. The company can demand that she remove the offensive post. If she doesn’t, the company can file legal action against her.

B. The company can demand that Facebook remove the offensive post. If it doesn’t, the company can file legal action against Facebook.

C. The company is protected against such employee comments by the Fair and Decent Treatment Act and can take disciplinary action against Mary.

D. The company is prohibited from any action against Mary because she is engaging in a protected concerted activity.

4. Pete is sensitive about the security of his personal identity information since his credit card has been stolen twice in the past year. He is trying to clear up his credit rating because of the problems with the stolen cards. Now, he has approached the HR manager at his organization and requested that his Social Security number be removed from all of the company records. He thinks that a mistake could cause him more grief if the Social Security number were to be obtained by thieves. As the HR professional, what should you do?

A. The company can and should delete the Social Security number from its records to protect Pete.

B. There is a need for the company to keep the Social Security number for tax reporting.

C. There is a need for the company to keep the Social Security number for census reporting.

D. The company has no need for the Social Security number but should keep it regardless.

5. Pat is talking with her colleagues about illegal discrimination at work. Someone mentions that the company is going to be sending out a request for updated race and sex information. Pat says that isn’t legal. The company isn’t supposed to track any of that information.

A. Pat has not understood the FLSA requirements that employers keep race and sex data on employees.

B. The EEOC has issued guidelines that agree with Pat’s belief that it is illegal to maintain that information in company records.

C. Only federal contractors are required to maintain the race and sex identification for employees.

D. It is only the public-sector employees who are exempt from providing their race and sex identification to employers.

6. The Tractor and Belt Company (TBC) handles conveyor belt installations for many small firms. Each of the customer projects begins on a day that is most convenient for the customer. Sometimes, that’s Monday; sometimes it’s Thursday or some other day. The HR manager says that the company will adjust its workweek to begin when the customer’s project starts. That way, each installation team has a separate workweek, and those workweeks can shift several times a month. What is your advice about this strategy?

A. The HR manager is simply taking advantage of the FLSA’s provisions for flexible workweeks that support small business. No change is required.

B. Once the workweek has been designated to begin on a certain day of the week, it should not be changed by the HR manager.

C. It depends on state laws and regulations whether the workweek begins on any specific day of the week.

D. The FLSA says a workweek should always begin on Sunday.

7. Sandy is 15 years old and a sophomore at Central High School. She gets a job at the local hamburger drive-in. Her boss says he needs her to work the following schedule during the Spring Break week: 4 hours at lunch time every day, 9 hours on Saturday, and 6 hours on Sunday. Is that schedule acceptable for Sandy given that she has a work permit from the school?

A. Because it is a school vacation week, there are no restrictions on the hours that Sandy can work.

B. Only state laws impact what hours Sandy can work because it happens during a vacation week.

C. Federal law says Sandy cannot work more than 8 hours a day when it is a vacation week.

D. Because Sandy won’t be working more than 40 hours for the week, there is no problem.

8. Gary is a junior at Southpark High School. He is 17 years old. The school needs some help in its warehouse during the summer, and Gary needs a job so he can save money for college. His boss is the facilities manager. Gary is assigned to work 9 hours every day during the week because one of the other employees is on disability leave. And because the other employee was the forklift driver, Gary has been given training in how to drive that equipment around the warehouse and loading dock. He likes that duty because he has been driving a car for only a few months. The forklift is cool. Is there any difficulty with the facilities manager’s requirements of Gary?

A. Everything the facilities manager has required Gary to do is permissible under federal laws.

B. Since there is no restriction to the number of hours Gary can work, everything should be okay.

C. Whatever the facilities manager wants Gary to do is okay because it’s only a summer job.

D. Even though Gary can work unlimited hours, he cannot be assigned to drive the forklift.

9. Hank puts in the following hours at work: Sunday, 0; Monday, 8; Tuesday, 8; Wednesday, 9; Thursday, 8; Friday, 8; Saturday, 7. His boss says he will give Hank compensating time off for every hour of overtime Hank works. How many compensating hours off should Hank receive for this work time according to federal requirements?

A. One day of compensating time off.

B. 1.5 days of compensating time off.

C. 7 hours of compensating time off.

D. Compensating time off is not permitted under the FLSA.

10. The Tractor and Belt Company (TBC) doesn’t have an HR manager. HR is handled by the payroll clerk. When a new employee is assigned to the production department as an assembler, the payroll clerk raises a question. Should the new person be paid the same as all the other employees, all women, in the department, or is it okay to pay her more because she made more at her former job?

A. There are no restrictions on the amount a new employee can be paid. It is market driven.

B. The Fair and Decent Treatment Act requires all people doing the same work be paid the same amount.

C. There is no restriction on the amount paid because all the incumbents are women.

D. Once a valid market survey has been done, it can be used to determine starting pay for new people.

11. Finding a life insurance company to provide benefits to its workforce has been difficult for Joan, the HR manager. She decides to recommend that her company offer a self-insured plan. What controls might Joan have to consider in her planning?

A. There are no federal restrictions on a company providing its own life insurance plan to employees.

B. The Employee Retirement Income Security Act regulates welfare benefit plans, including life insurance.

C. The Life Insurance Benefit Plans Act has control over what Joan is able to do with her idea.

D. Only state laws will have an influence on Joan’s development of a self-insured benefit plan.

12. Simone has just been hired and is asked to complete a Form I-9. She offers her driver’s license as proof of her identity. What else is required for her to complete the document?

A. She may offer any document authorized on the Form I-9 instructions as proof of her authorization to work in this country.

B. She must have a Social Security number to submit on the form.

C. Simone has a U.S. passport but is told that she can’t use it for her Form I-9.

D. As long as Simone offers to get a Social Security number in the next 30 days, she can submit her Form I-9.

13. Steve is the HR director for a crane operations company. He just got a phone call from one of his field supervisors with tragic news. One of their units has collapsed, and their operator is in the hospital with serious injuries. What should Steve do with that information?

A. Steve should immediately call the hospital to be sure all the insurance information is on file for their employee.

B. He should notify the Occupational Safety and Health Administration about the accident and the injuries.

C. He should notify the Crane Safety Institute of America to be sure they are able to add this accident to its database.

D. Steve should call the crane operator’s spouse to let her know about the tragedy.

14. Every year Donna has to attend training on the use of the company vehicles she drives. She thinks this is a silly waste of time. Donna knows how to drive, and she knows the company vehicles. Why should she attend training every year?

A. There is no federal requirement for Donna to take yearly training.

B. OSHA requires training be done only once for vehicle operation.

C. Only state safety provisions govern how frequently training must be done in Donna’s situation.

D. Safety programs must be developed that provide for refresher training on all equipment operating procedures.

15. Jerry just arrived at work and found a sink hole in the parking lot. He is early enough that other people have not yet begun arriving for work. Because the hole is about 10 feet across at the moment, what should Jerry be doing about the problem?

A. If Jerry is a management employee, he should take charge of the situation and begin the process of alerting others to the danger posed by the sink hole.

B. If Jerry is a nonmanagement employee, he should give his boss a call and leave a voice mail message, if necessary, about the sink hole.

C. If the sink hole poses an immediate danger of death or serious injury, Jerry should call 911 and report it. He should barricade the perimeter of the sink hole with tape or something else to prevent people from falling in.

D. Jerry should first test the edges of the sink hole to see whether it could grow in size. Then he should barricade the perimeter of the sink hole so no one will fall in.

16. Theresa attended a seminar recently that pointed out the need to post a yearly summary of injury and illness cases. Her boss doesn’t want to do that, saying he doesn’t want to publicize the problems the organization has had. Theresa should tell him:

A. Posting requirements call for display of the report in a prominent location if there are 10 or more people on the payroll.

B. Posting requirements can be met by putting a report on the back of the closet door in the employee lounge.

C. Posting requirements can be met by making the report available in a binder in the HR manager’s office.

D. Posting requirements are optional, but good employers are using the report as a “best practice” in safety programs.

17. An employer routinely works with hazardous chemicals, trucking them for delivery to various customer locations. After each load, the truck must be cleaned before being loaded with a different chemical. Cleaning has to be done by someone inside the tanker using special absorbent materials. What else should be considered?

A. Personal protective equipment should be provided by the employer, including breathing apparatus and hazmat suits.

B. Standard coveralls and boot covers should be provided for employees to use if they want.

C. Workers should never be sent into a tanker truck for any reason.

D. Breathing equipment is absolutely a requirement if someone will be in the tanker truck for longer than 30 minutes.

18. Shelly has worked for the same dentist for more than 10 years. In all that time, there has been no mention of any special requirements for handling syringes. She arranges the doctor’s equipment trays every day and cleans them up after they have been used. She just tosses the used equipment into the autoclave or into the trash if it won’t be used again. If you were advising Shelly about the practices used in her dental office, what would you say?

A. Needles should be broken off before they are thrown into the trash can.

B. Sharps should be triple wrapped in a stiff paper to protect from sticking someone handling the trash.

C. Any possible harm can be prevented if used syringes are placed into an approved sharps container.

D. Putting used syringes into any solid container that is wrapped in red paper is sufficient to meet requirements.

19. The price of gold is climbing, and folks at the Golden Nugget Mine are planning to reopen their operation. They know that safety is an important consideration. But what about federal regulations for gold mines? Are there such things?

A. There are only OSHA regulations in general. All of those rules still apply.

B. There are MSHA regulations to be considered, but because they are not in the coal mining business, the Golden Nugget Mine won’t have to worry about them.

C. MSHA rules apply to all mining operations in the United States. The Golden Nugget Mine will have to study those rules and get ready for inspections by the government.

D. MSHA can tell the mine what to do, but it has no authority to conduct inspections because the Golden Nugget is not a coal mine.

20. Olivia suspects her payroll clerk of embezzlement. She has inspected the records for the past 3 months, and the pattern is clear. But to be sure it is the payroll clerk and not the accounts payable clerk, Olivia wants to confront her and demand she take a lie detector test.

A. Good going, Olivia. You caught her. Sure enough, demanding that she take a lie detector test is a good way to confirm your suspicions.

B. While lie detector tests can be used for some employees, accounting employees are exempt. You can’t test her.

C. Lie detector tests are not permitted for any use by any employer. You can’t test her.

D. Lie detector tests can be required only in limited circumstances, and this isn’t one of them. You can’t test her.

21. For the past 6 years, Sam’s company has been a federal contractor working on equipment for the Department of Defense. The company has additional contract opportunities coming up, and Sam isn’t sure if there will be an extra burden related to disabled workers because they are subject to both the Americans with Disabilities Act and the Rehabilitation Act.

A. Sam should rest easy. The ADA and the Rehabilitation Act are identical in their content and requirements.

B. Sam’s company has already met its recruiting obligations and now only has to worry about meeting ADA requirements.

C. Handling job accommodation requests is a requirement of the ADA but not the Rehabilitation Act. Things should be easier.

D. Whatever Sam thinks, the ADA and Rehabilitation Act requirements have applied to his company for 6 years already. Adding more contracts won’t change his current obligations.

22. Arthur has applied for a job with the AB Trucking Company. He is told he must take and pass a urine drug test. If he fails the test and any subsequent random drug test after he is hired, he will be dismissed from the company. Arthur reacts loudly and says, “That’s an invasion of my privacy! I won’t do it.” What happens now?

A. Arthur can call his lawyer and have the drug test waived since he doesn’t want to take it.

B. Arthur can discontinue his participation in the AB Transit Company’s employment process.

C. Arthur can take the test now and still refuse to participate in random tests later.

D. Arthur can have his friend take the test for him.

23. Cynthia works for a large multistate manufacturing company and approaches her boss one morning and tells him that her husband has just received orders from the Coast Guard to report for deployment to the Middle East. They have a week to get everything ready for his departure. She wants to know if she can have excused time off during the coming week. If you were her boss, what would you tell her?

A. She can have the time off, but it will be logged as unpaid and charged as FMLA leave.

B. She can take the time off, but it will be unexcused because she didn’t give more than a week’s notice.

C. If she wants the time off, she will have to use her paid vacation time for the week.

D. Jennifer has already requested the week off for vacation, but only one person can be off at any one time or the unit won’t be able to function. Cynthia’s request is denied with regrets.

24. Robert works for a congressional representative and suffers a disabling injury in an automobile accident. Robert cannot work more than 3 hours per day according to his doctor. Weeks later, when he returns to work, he asks for a job accommodation and is told that it can’t be done. When he presses the point, his supervisor says the reason is:

A. Congressional staff people aren’t covered by the ADA, so they don’t have to even discuss his request.

B. The request he has made would exempt him from several of his job’s key responsibilities.

C. The request he has made would set a precedent that other representatives’ offices would have to follow.

D. Because congressional staff members have to meet the public every day, they can’t have people seeing disabled workers in the office. It doesn’t look good.

25. Jimmy has been told he can get healthcare coverage from his company because of the new Affordable Care Act. His company employs only ten people, but Jimmy is excited that he will finally get some insurance. He hasn’t been feeling very good lately.

A. Jimmy might have to wait until he can arrange for insurance through one of the exchanges.

B. Jimmy should get an enrollment form from his boss because all employees will be covered by the new requirement that employers provide healthcare coverage to workers.

C. Jimmy is out of luck. The new law only covers employers with 50 or more people, and there is no way Jimmy will be getting health insurance under the new law.

D. Jimmy’s boss just ran out of forms, but he will get some more from HR and then have Jimmy sign up for his coverage.

Answers

1. C. If the new worker is classified as an employee, on the payroll, the IRS demands that income tax, Social Security tax, and Medicare tax be withheld. People are not allowed to opt out because they want to file their own tax payments each quarter.

2. A. The Wagner-Peyser Act of 1933 provides for federal unemployment insurance and sets guidelines for state unemployment insurance programs.

3. D. Mary is protected by the National Labor Relations Act (NLRA) of 1935. The National Labor Relations Board has taken the position that almost all postings on the Internet, whether complaining about supervisors or employers or making charges that employees are treated unfairly, are protected concerted activities under the act.

4. B. Both the FLSA and the IRS regulations require employers to obtain and report Social Security numbers from all employees. A Social Security number is required for completion of the Form I-9 to prove authorization to work in this country. The company may not remove it from its records, regardless of how concerned Pete may be.

5. A. Race and sex data is specifically required by the FLSA. For employers with 15 or more people on the payroll that are engaged in interstate commerce, EEOC regulations also require maintenance of those data records.

6. B. The FLSA requires employers to designate a day as the beginning of the workweek. To change that designation, there should be a significant business reason. Moving the workweek to begin based on projects is not acceptable. FLSA requires consistency because of the need to pay overtime for hours in excess of 40 in a workweek. Constantly moving a workweek could deprive employees of earned overtime.

7. C. The FLSA prohibits people aged 14 and 15 from working more than 8 hours in a day even when school is not in session.

8. D. Driving a “power-driven hoisting apparatus” is one of the 17 most dangerous jobs that may not be performed by workers younger than 18. At Gary’s age, the FLSA has no restriction on the hours he may work in a week.

9. B. The FLSA requires all hours of work in excess of 40 in a week be paid overtime at the rate of 1.5 times the normal hourly pay rate. Compensating time off, in lieu of overtime pay, must be given at the rate of 1.5 hours for every overtime hour. So, a day of overtime (8 hours) should be compensated for with 1.5 days of compensating time off.

10. C. The Equal Pay Act requires men and women doing the same work to be paid the same rate. If there are no men in the job, only women, there is no Equal Pay Act issue. If all the incumbents are women, there is no employment discrimination based on sex because there is only one sex represented. So, with those conditions, there is no barrier to paying the new employee more based on her previous job’s compensation.

11. B. ERISA specifically regulates welfare benefit plans such as health insurance and life insurance. That is in addition to regulation of pension and retirement plans offered by employers. It makes no difference who underwrites the life insurance—the employer or a vendor. ERISA will still provide requirements.

12. A. The deadline for completing a Form I-9 is 3 days after hire. Any documents listed on the form are acceptable. The employer may not designate certain documents as requirements. A Social Security number is one way to demonstrate authorization to work in this country. A valid U.S. passport is also a way to demonstrate both identity and work authorization.

13. B. The company has 8 hours after the accident to file its report of serious injury with OSHA. We don’t know how long ago the accident happened, but it was long enough that the operator is now in the hospital. Steve should gather all the information needed for the report and get it called in to the OSHA office.

14. D. Injury and Illness Prevention Programs are required by OSHA. Part of the identification and remediation of workplace hazards is employee training. Even if employees have been trained on equipment operation, periodic refresher programs can help overcome bad habits that might have developed. Refresher programs conducted on a yearly basis represent a reasonable interval for Donna’s situation.

15. C. It doesn’t matter if Jerry is a manager or not. All employees should be trained to react to imminent dangers by taking immediate action to prevent anyone from serious injury. And walking up to the edge to see if it is going to collapse is just nuts.

16. A. If she must, Theresa should show her boss the requirement in OSHA regulations. A prominent display location excludes places such as the back of a closet door or inside a binder somewhere in the manager’s office.

17. A. Working inside an enclosed space with dangerous fumes calls for hazmat equipment and adequate breathing equipment. OSHA regulations specify the personal protective equipment (PPE) necessary in this and other working conditions.

18. C. The Needlestick Safety and Prevention Act requires all sharps be disposed of in approved sharps containers. It also requires posting of warnings and information about blood-borne pathogens.

19. C. The Mine Safety and Health Administration has jurisdiction over all mining operations, not just coal mines. It handles safety complaints and conducts inspections of both above-ground and underground mining operations. All mine operators are required to conduct their internal safety inspections and maintain records of those inspections.

20. D. Except for law enforcement, security officers, and people who handle controlled substances, lie detectors are no longer permitted in the workplace. They were commonly used prior to 1988’s Employee Polygraph Protection Act.

21. D. Sam’s company will not incur any additional obligations for disabled workers if they seek additional government contracts. They have been obligated under both laws for 6 years.

22. B. Arthur has to decide whether he wants to continue seeking employment with the AB Transit Company. If so, he must participate in their drug testing program. If he wants to avoid testing, he must drop out of the job application process and seek employment elsewhere.

23. A. Under the FMLA, Cynthia is entitled to unpaid leave of absence as a spouse of a covered military service worker. It will be logged as unpaid time off, unless she wants to use some of her accrued paid time off. It will also be logged in her record as FMLA leave.

24. B. Even the congressional offices are subject to the ADA’s requirement to consider and discuss requests for job accommodation. Job accommodations must be made to make it easier for an employee to perform one of the job’s essential functions. If he can’t do that, even with an accommodation, he is not eligible for assignment to that job. If there is no other job available, the employer can’t return him to work until his status changes.

25. A. Employers are required to provide health insurance coverage, or pay a penalty in lieu of that insurance, only if they have 50 or more full-time workers. With only 10 employees, Jimmy’s employer is not obligated to provide health insurance coverage. Jimmy may purchase it for himself through one of the exchanges set up for that purpose.

Endnotes

1. “Instructions for Employment Eligibility Verification,” U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services, accessed June 20, 2016, www.uscis.gov/files/form/i-9.pdf

2. “Federal Mine Safety & Health Act of 1977, Public Law 91-173, as amended by Public Law 95-164,” U.S. Department of Labor, Mine Safety and Health Administration, accessed June 20, 2016, www.msha.gov/regs/act/acttc.htm

3. “OSH Act, OSHA Standards, Inspections, Citations and Penalties,” U.S. Department of Labor, Occupational Safety and Health Administration, accessed June 20, 2016, www.osha.gov and search for Inspections, Citations, and Proposed Penalties

4. Ibid

5. Lawson v. FMR LLC, U.S. No. 12-3, retrieved from http://www.supremecourt.gov/opinions/13pdf/12-3_4f57.pdf on June 20, 2016

6. Sutton v. United Air Lines, Inc., 527 U.S. 471 (1999)

7. Toyota Motor Manufacturing, Kentucky, Inc. v. Williams, 534 U.S. 184 (2002)

8. The Job Accommodation Network, 800-526-7234 or www.askjan.org (accessed on June 20, 2016) is a free resource for employers. It is a service provided by the U.S. Department of Labor’s Office of Disability Employment Policy (ODEP). JAN has been providing services for more than 25 years.

9. “Disability Discrimination,” U.S. Equal Employment Opportunity Commission, accessed on June 20, 2016, https://www.eeoc.gov/laws/types/disability.cfm

10. The first was the Civil Rights Act of 1866, which protected the right to enter into contracts regardless of race.

11. A list of controlled substances can be found in Schedules I through V of Section 202 of the Controlled Substances Act (21 U.S.C. 812) and as further defined in Regulation 21 C.F.R. 1308.11–1308.15.

12. “eLaws – Drug-Free Workplace Advisor,” U.S. Department of Labor, accessed June 20, 2016, http://webapps.dol.gov/elaws/asp/drugfree/screenr.htm

13. 41 C.F.R. 60-3.7

14. Fair Treatment of Experienced Pilots Act (December 13, 2007), Public Law 110-135

15. 41 C.F.R. 60