Chapter Review

Employment at Will

Under this common law doctrine, either party may terminate the employment relationship at any time and for any reason (“at will”).

1. Exceptions to the employment-at-will doctrine—Courts have made exceptions to the doctrine on the basis of contract theory, tort theory, and public policy.
2. Wrongful discharge—Whenever an employer discharges an employee in violation of an employment contract or statutory law protecting employees, the employee may bring a suit for wrongful discharge.

Wages, Hours, and Leave

1. Davis-Bacon Act—Requires contractors and subcontractors working on federal government construction projects to pay their employees “prevailing wages.”
2. Walsh-Healey Act—Requires firms that contract with federal agencies to pay their employees a minimum wage and overtime pay.
3. Fair Labor Standards Act—Extended wage and hour requirements to cover all employers whose activities affect interstate commerce plus certain other businesses. The act has specific requirements relating to child labor, maximum hours, minimum wages, and overtime.
4. The Family and Medical Leave Act (FMLA)—Requires employers with fifty or more employees to provide employees with up to twelve weeks of unpaid leave (twenty-six weeks for military caregiver leave) during any twelve-month period to deal with specified health and family issues.

Health, Safety, and Income Security

1. Occupational Safety and Health Act—Requires employers to meet specific safety and health standards that are established and enforced by the Occupational Safety and Health Administration (OSHA).
2. State workers’ compensation laws—Establish an administrative procedure for compensating workers who are injured in accidents that occur on the job, regardless of fault.
3. Social Security and Medicare—The Social Security Act provides for old-age (retirement), survivors’, and disability insurance. Both employers and employees must make contributions under the Federal Insurance Contributions Act (FICA). The Social Security Administration also administers Medicare, a health-insurance program for older or disabled persons.
4. Private retirement plans—The federal Employee Retirement Income Security Act (ERISA) establishes standards for the management of employer-provided pension plans.
5. Unemployment insurance—The Federal Unemployment Tax Act (FUTA) created a system that provides unemployment compensation to eligible individuals. Employers are taxed to cover the costs.
6. COBRA—The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires employers to give employees, on termination of employment, the option of continuing their medical, optical, or dental insurance coverage for a certain period at their own expense.
7. HIPAA—The Health Insurance Portability and Accountability Act (HIPAA) establishes requirements for employer-sponsored group health plans. The plans must also comply with various safeguards to ensure the privacy of employees’ health information.
8. Affordable Care Act—The Affordable Care Act requires most employers with fifty or more full-time employees to offer health-insurance benefits. It also provides tax credits to employers who provide benefits.

Immigration Law

1. Immigration Reform and Control Act—Prohibits employers from hiring illegal immigrants. Compliance audits and enforcement actions are conducted by U.S. Immigration and Customs Enforcement.
2. Immigration Act—Limits the number of legal immigrants entering the United States by capping the number of visas (entry permits) that are issued each year.

Employment Discrimination

1. Title VII of the Civil Rights Act—Prohibits employment discrimination based on race, color, national origin, religion, or gender.
   1. Employees alleging discrimination must file a claim with the Equal Employment Opportunity Commission (EEOC). The EEOC may sue the employer on the employee’s behalf or it may allow the employee to sue the employer directly.
   2. Title VII prohibits both intentional (disparate-treatment) and unintentional (disparate-impact) discrimination. Disparate-impact discrimination occurs when an employer’s practices, tests, or procedures have the effect of discriminating against a protected class.
   3. Remedies under Title VII include reinstatement, back pay, and retroactive promotions. Damages (both compensatory and punitive) may be awarded for intentional discrimination.
2. Discrimination based on age—The Age Discrimination in Employment Act (ADEA) prohibits employment discrimination on the basis of age against individuals forty years of age or older. Procedures for bringing a case under the ADEA are similar to those for bringing a case under Title VII.
3. Discrimination based on disability—The Americans with Disabilities Act (ADA) prohibits employment discrimination against persons with disabilities who are otherwise qualified to perform the essential functions of the jobs for which they apply.
   1. To prevail on a claim, the plaintiff must show that she or he has a disability, is otherwise qualified for the employment in question, and was excluded from it solely because of the disability. Procedures and remedies under the ADA are similar to those in Title VII cases.
   2. The ADA defines a disability as a physical or mental impairment that substantially limits one or more major life activities, a record of such impairment, or being regarded as having such an impairment.
   3. Employers are required to reasonably accommodate the needs of qualified persons with disabilities through such measures as modifying the physical work environment and permitting more flexible work schedules.
4. Defenses to employment discrimination—As defenses to claims of employment discrimination, employers may assert that the discrimination was required for reasons of business necessity, to meet a bona fide occupational qualification, or to maintain a legitimate seniority system. Evidence of prior employee misconduct acquired after the employee has been fired is not a defense to discrimination.