978-0134004006 Chapter 31 Lecture Note

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“It is difficult to imagine any grounds, other than our own personal economic

predilections, for saying that the contract of employment is any the less an appropriate

subject of legislation than are scores of others, in dealing with which this Court has held

that legislatures may curtail individual freedom in the public interest.”

Justice Stone

I. Teacher to Teacher Dialogue

A phrase commonly used in the area of pension and employee benefits law is “golden ball

and chain.” This description is meant to illustrate the two-sided nature of the prerequisites

associated with the employment relationship. On one side, the gold comes from the financial

security afforded by a steady income and the various employment-related insurance protections

a standoff based on economic necessity.

In the past, the dominant contractual form this relationship has taken has been found in the

employment at will doctrine. This doctrine assumes that given equal bargaining power, and absent

express or implied agreement to the contrary, either the employee or employer may end the

relationship. This termination can come about at any time, for any reason, bilaterally or

retirement fund laws, protecting jobs of employees that need to take time off for medical

emergencies for themselves or their immediate family, setting minimum pay rates, and employee

health and safety protections. In addition, a number of courts have seen fit to interpret employer

handbooks, written and oral job policies, and other acts as indicia of an implied contract between

EMPLOYMENT, WORKER

PROTECTION, AND IMMIGRATION

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of the immediate parties involved.

II. Chapter Objectives

1. Explain how state workers’ compensation programs work and describe the benefits available.

and Health Act.

3. Describe the minimum wage and overtime pay rules of the Fair Labor Standards Act.

III. Key Question Checklist

 Define the employer-employee relationship.

 What restrictions are placed on that relationship?

IV. Text Materials

Introduction to Employment, Worker Protection, and Immigration Laws

Before the Industrial Revolution, the doctrine of laissez-faire governed the employment

relationship in this country. Today, many high technology and other businesses rely on

Workers’ Compensation

These acts were enacted by the states in order to respond to the problems caused by the common

Workers’ Compensation Insurance – Employers are required to purchase insurance or to be

Employment-Related Injury – Claimants must prove that their injuries arose from their work in

order to get recovery.

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Exclusive Remedy – Workers’ compensation is an exclusive remedy and the employee may not

Case 31.1 Worker’s Compensation: Kelley v. Coca-Cola Enterprises, Inc.

2010 Ohio App. Lexis 1269 (2010), Court of Appeals of Ohio

Facts: Kelley, who was treated for a herniated disc and a cervical dorsal strain after a team-

building event organized by Coca-Cola, filed a claim for workers’ compensation. Coca-Cola

Issue: Is Kelley entitled to workers’ compensation benefits?

Decision: The court of appeals affirmed the trial court’s judgment. An exception to the general

Ethics Questions: An injured worker qualifies for workers’ compensation benefits and does not

have to spend time and money to sue his employer. But there is a possible risk of not winning.

Occupational Safety

The Occupational Safety and Health Act was enacted in 1970, establishing OSHA and imposing

Specific Duty Standards – OSHA standards address both specific duties, like establishing safety

requirements for equipment.

work environment free from hazards.

Case 31.2 Occupational Safety: R. Williams Construction Company v. OSHA Review

Commission

464 F.3d 1060, 2006 U.S. App. Lexis 24646 (2006), United States Court of Appeals for the Ninth

Circuit

Palomar was severely injured. The Occupational Safety and Health Administration (OSHA),

conducted an investigation and cited Williams for violating the following OSHA trench safety

standards:

 Failing to instruct its employees in the recognition and avoidance of unsafe conditions

Section 1926.21(b)(2).

 Failing to ensure that no worker would have to travel more than 25 feet to reach a safe

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required by 29 C.F.R. Section 1926.652(a)(1).

Issue: Has Williams violated the OSHA trench safety standards?

Decision: The U.S. Court of Appeals held that Williams had violated the OSHA trench safety

standards, and upheld the citations issued against Williams and the imposition of the $22,000

penalty.

federal regulatory authority.

Fair Labor Standards Act (FLSA)

Minimum Wage – FLSA establishes minimum wage and overtime pay requirements for hourly

employees. Managers, administrative workers, and professionals are excluded from these

requirements.

should be decreased.

Overtime Pay – Workers cannot be required to work more than 40 hours in a week unless they

are paid time-and-a-half. The 40 hours apply to every week in the pay cycle.

and doffing protective gear and time walking between the locker room and the production floor

before and after their assigned shifts. The employees alleged that IBP was in violation of the Fair

Labor Standards Act. The U.S. District Court held that the donning and doffing of protective gear

and the walking time between the locker room and the production floor were compensable time

certiorari to hear the appeal.

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is covered by the FLSA.

Ethics Questions: The basic objective behind FLSA’s enactment is protection of workers. But,

it seems illogical of IBP to compensate the workers for time spent on changing and cutting meat

alone. IBP’s main intention would have been to pay the workers for the time spent on cutting

walking to the production area.

Exemptions from Minimum Wage and Overtime Pay Requirements – Executives, salaried

Family and Medical Leave Act

Critical Legal Thinking – Public policy of giving workers some ability to take care of

Cobra and Erisa

Employee Retirement Income Security Act (ERISA) – If employers offer pension plans,

Government Programs

Social Security – The Social Security system provides limited retirement and death benefits to

certain employees and their beneficiaries. FICA requires that both employers and employees

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Immigration Law

H-1B Foreign Guest Worker Visa – These visas allow foreign nationals that are skilled in

specialty occupations to work in the U.S.

EB-1 Extraordinary Ability Visa – This allows U.S. employers to employ in the United States

Undocumented Workers – The Immigration Reform and Control Act requires employers to

verify whether prospective employees are either U.S. citizens or otherwise authorized to work in

the country (e.g., have proper work visas).

V. Key Terms and Concepts

 Administrative employee exemption—The administrative employee exemption applies to

analysts, computer programmers, software engineers, or other similarly skilled workers in the

computer field; and who are engaged in the design, development, documentation, analysis,

creation, testing, or modification of computer systems or programs.

 Employee Retirement Income Security Act (ERISA)—A federal act designed to prevent

fraud and other abuses associated with private pension funds.

employment.

 Exclusive remedy—Workers cannot both receive workers’ compensation and sue their

employers in court for damages.

 Executive exemption—The executive exemption applies to executives who are compensated

on a salary basis, who engage in management, who have authority to hire employees, and

who regularly direct two or more employees.

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specified situations.

 Federal Insurance Contributions Act (FICA)—A federal act that says employees and

 Federal Unemployment Tax Act (FUTA)—A federal act that requires employers to pay

unemployment taxes; unemployment compensation is paid to workers who are temporarily

unemployed.

to his employees.”

 H-1B visa—A visa that allows U.S. employers to employ in the United States foreign

nationals who are skilled in specialty occupations.

 H4 visa—H-1B visa holders are allowed to bring their immediate family members (i.e.,

spouse and children under 21) to the United States under the H4 visa category as dependents.

executive, administrative, or professional employee.

 Immigration Reform and Control act of 1968 (IRCA)—A federal statute that makes it

unlawful for employers to hire illegal immigrants.

 Learned professional exemption—The learned professional exemption applies to employees

compensated on a salary or fee basis that perform work that is predominantly intellectual in

instruction.

 Living wage law—Some cities have enacted minimum wage requirements, usually called

living wage laws, which also set higher minimum wage rates than the federal level.

 Minimum wage—The federal minimum wage is set by Congress and can be changed. As of

2014, it was set at $7.25 per hour.

the workplace.

 Occupational Safety and Health Administration—A federal administrative agency that is

empowered to enforce the Occupational Safety and Health Act.

 Outside sales representative exemption—The outside sales representative exemption applies

to employees who will be paid by the client or customer, whose primary duty is making sales

workweek.

 Self-Employment Contributions Act—A federal act that says self-employed persons must pay

Social Security Taxes equal to the combined employer-employee amount.

 Social Security—Federal system that provides limited retirement and death benefits to

covered employees and their dependents.

Security Administration.

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unemployed.

 U.S. Department of Labor—The U.S. Department of Labor is empowered to enforce the

FLSA.

 U.S. Citizenship and Immigration Services—A federal agency empowered to enforce U.S.

immigration laws.

benefits.

 Worker’s compensation—Compensation paid to workers and their families when workers are

injured in connection with their jobs.

 Workers’ compensation acts—Acts that compensate workers and their families if workers are

injured in connection with their jobs.

insurance companies or from government-sponsored programs.

 Work visas—Work permits given to certain foreign guest workers. These are limited in

number.