Legal Legal IssuesIssues

• $4 million in overtime awarded to VPs at Bank $4 million in overtime awarded to VPs at Bank of America in Seattleof America in Seattle

• Starbucks settles $18 million manager’s suit Starbucks settles $18 million manager’s suit on overtime in Californiaon overtime in California

• Farmers claim adjusters award $90 for Farmers claim adjusters award $90 for overtimeovertime

• RadioShack pays $30 million to settle store RadioShack pays $30 million to settle store manager’smanager’s

• Retail giant Walmart raided Retail giant Walmart raided for hiring illegal immigrantsfor hiring illegal immigrants

• Gender discrimination suit Gender discrimination suit filed against Walmart. filed against Walmart. – Purportedly fails to promote Purportedly fails to promote

women and minorities in women and minorities in same ratios as white malessame ratios as white males

Fair Labor Standards Fair Labor Standards ActAct

• Primarily covers firms which are engaged in interstate commerce in the handling, moving or selling of goods

• Provides for minimum wage ($5.15) – 25 cents in 1938– $1.68 in 1968– $2.65 in 1978– $5.15 in 1997

• Defines overtime for nonexempt jobs

• Delineates protection for child labor.

State of WashingtonState of Washington• Provides for minimum wage ($7.16)

• Highest in the nation– Alaska is $7.15– Connecticut is $7.10– Oregon is $7.05

• Adjusted to keep up with inflation

• Tied to consumer price index.

FLSA Overtime ProvisionsFLSA Overtime Provisions• Must be paid at least 1.5 times their regular rate Must be paid at least 1.5 times their regular rate

of pay for all hours worked over 40 during a of pay for all hours worked over 40 during a single week. single week.

• Work week week is any period of seven consecutive days.

• Paid for overtime whether it was worked at home or in the office.

• Paid overtime even if you did not ask the person to work it and, in fact, even if you asked him or her not work it.

• There are some exceptions for certain medical jobs, firefighters where it is on a two week average.

Exemption: ProfessionalExemption: Professional• Advanced Training Or Advanced Training Or • Creative, Original WorkCreative, Original Work• Exercise of DiscretionExercise of Discretion• IntellectualIntellectual• NonstandardizedNonstandardized• >20% of work hours spent on other tasks>20% of work hours spent on other tasks

Exemption: Exemption: ManagerialManagerial• Key function is management of the enterprise or a

customarily recognized department or subdivision.• Supervises 2 or more employees (80 hours)• Has authority or can recommend hiring and firing• Customarily and regularly exercise discretion powers.

• Devotes no more than 20 percent (40 percent if employed in a retail or service establishment) to other activities

• Responsible office or non manual work directly related to management policies or general business operations.

• Administer academic or training programs for educational establishment.

• Exercise discretion and independent judgment as distinguished from using skills and following procedures.

• Must have authority to make important decisions.

Exemption: AdministratorExemption: Administrator

Overtime Is NOT Due When:

• Paid on a commission basis as long AND as pay at least 1.5 times minimum wage

• Time spent traveling from their homes or changing clothes and washing before or after work.

• Travels during normal working hours

• When an employee works an extra shift for another employees at their own option

• Up to 10 hours per week for remedial education classes (like reading).

Child Labor StandardsChild Labor Standards Dictates the hours and conditions under which

children may work.• Age 18 and over any job whether hazardous or not. Unlimited hours.

• Age 16 -17 non hazardous, unlimited hour

• Age 14-15 non school hours; 3 hours on school days, 18 hours/ week, 8 hours/non school day;begin no earlier than 7 a.m. nor later than 7 p.m. except in the summer.

• Age 12-13 outside school hours. Parents permission.

• Age 12 and under. Farm work, outside of school hours, parents permission.

FLSA Proposed ChangesFLSA Proposed Changes• All workers earning less than $22,100 must receive overtime• Exemptions include

– Executives– Administrative– Learned Professionals– Creative Professionals – Any worker making $65,000 or more in one of the above

categories is automatically exempt– Computer employees and outside sales workers generally are

exempt• Qualifies 1.3 million low wage managers for overtime• Takes overtime away from estimated 640,000 white collar

workers

FLSA Proposed ChangesFLSA Proposed Changes• ExecutivesExecutives

– Manage operationsManage operations– Direct 2 or more workersDirect 2 or more workers– Authority to hire and fireAuthority to hire and fire

• AdministrativeAdministrative– Office or nonmanual work related to general business operationsOffice or nonmanual work related to general business operations– Hold a position of respnsibility defined as work of substantial Hold a position of respnsibility defined as work of substantial

importance or high level of skill or trainingimportance or high level of skill or training

• Learned professionalsLearned professionals– Office or nonmanual work requiring knowledge of an advance degree Office or nonmanual work requiring knowledge of an advance degree

in a field of science or learning but also gained through the militaryin a field of science or learning but also gained through the military

• Creative professionalsCreative professionals– Invention, imagination, originality or talen in recognized artistic field.Invention, imagination, originality or talen in recognized artistic field.

Equal Pay ActEqual Pay Act

Equal Pay ActEqual Pay Act

Equal Pay Act• Prohibits discrimination between employees

on the basis of sex for employees performing substantially equal work.– Skill– Effort– Responsibility– Working Conditions

• Determined through Job Analysis and Job Determined through Job Analysis and Job EvaluationEvaluation

Equal Pay ActExemptions• Seniority systems• Merit Pay Systems• Systems that measure earnings or

quality of work• Factors Other than Sex

Civil Rights Act of 1964Civil Rights Act of 1964To fail or refuse to hire or discharge any individual with respect to compensation,

terms, conditions or privileges or employment due to the individual's race, color, religion, sex or national origin or

To limit, segregate or classify employees or applicants in any way which would deprive

the individual of employment opportunities.

Shifting Burden Of Proof Shifting Burden Of Proof ModelModel

Burden On Plaintiff Disparate Impact

Disparate Treatment

Burden on DefendantValid Selection

DeviceBFOQ

Business NecessityAffirmative Action

Burden on PlaintiffIs There a Better,

LessDiscriminatory

Selection Device?

How Do You Prove Discrimination?

Disparate Disparate TreatmentTreatment He or She Belongs to a Protected Group He or she was rejected but was qualified The position remained open to applicants Employee must prove reasons for

treatment was pretext for discrimination Prove differential Treatment Prove Intentional Discrimination Employer Tries to articulate a sufficient

Reason for Differential Treatment

Disparate ImpactDisparate ImpactEmployee Must Prove• Prima facie discrimination• Show Selection Ratios Different

If Proven, Burden Shifts to Employer

Defenses Against Disparate ImpactDefenses Against Disparate Impact

• Bona Fide Occupation Qualification. (BFOQ) rejects applicants on the basis of a particular characteristic.

• Seniority System. If intent and outcome is not necessarily discriminatory

• Business Necessity. When the essence of the business operation is undermined by not hiring members of a protected group.

• Job Relatedness Criteria. Validity is established through proving there is a relationship between the criterion (test) and actual job performance.

• Affirmative Action Program. Used to rectify past discrimination may used as a defense.

Questionable CriteriaQuestionable Criteria • Educational requirements --- particularly high school

diploma• Height and weight requirements. • Experience requirements. • Physical strength test. • Arrest records. • Credit record requirements.• Marital Status. • Less than honorable discharges. • Promotion based on supervisory recommendation. Favors

white males

Arrest Records in Washington Arrest Records in Washington StateState• Arrest records. Employer who asks about arrest must ask

whether charges are pending, have been dismissed or lead to conviction

• Convictions. Must notify employee within 30 days of receiving conviction record and must allow employee to examine it.

• Can only make decision if conviction is less than 10 years old and crime involved behavior that would adversely affect job performance

• Rights of applicant. If conviction record is cleared or vacated may answer question as though conviction never occurred. A person convicted of a felony can not be refused an occupational license unless the conviction is less than 10 years old and related to job duties

• Right of employer. Entitled to obtain complete criminal record information for positions that – Require bonding or – Have access to trade secrets– Proprietary business information– Money

Problematic Behavior Problematic Behavior Regarding AgeRegarding Age

• Like sex stereotypes, age stereotypes Like sex stereotypes, age stereotypes are relatively common in the work place.are relatively common in the work place.

• Avoid references to age during the Avoid references to age during the interview.interview.

• Don't make remarks suggesting that an Don't make remarks suggesting that an older applicant is "over qualified". Such older applicant is "over qualified". Such statements can be viewed as a subterfuge statements can be viewed as a subterfuge for age discrimination.for age discrimination.

Problematic Interviewer Problematic Interviewer Behavior Regarding RaceBehavior Regarding Race

• Don't comment or Don't comment or joke about a joke about a candidate's race.candidate's race.

• Most people are Most people are sensitized to the sensitized to the need to avoid need to avoid race-related race-related statements.statements.

Problematic Behavior Problematic Behavior Regarding SexRegarding Sex

• Problems often surround male interviewers and female candidates.

• Avoid inappropriate language (“honey”, “girl”).

• Paternalistic behaviors (pats on the back, arm around the shoulder ).

• Don't ask men and women different questions..

SSexual exual HarassmentHarassment

GuidelinesGuidelines• Assumes that sexual harassment is a condition of employment if one gender is exposed to it more frequently than the other.

• Two types of HarassmentTwo types of Harassment– Overt as a condition of employmentOvert as a condition of employment– Hostile EnvironmentHostile Environment

• An organization may be held liable for sexual harassment, even if they have no knowledge of the harassment, or it is conducted by one of its agents..

Protections:Protections:• Develop a specific written policy against sexual

harassment• Express strong disapproval of sexual harassment• Conducting training to sensitize managers• Establish a specific grievance procedure • Thoroughly investigate claims

• Discipline anyone found guilty

Americans With Americans With Disabilities ActDisabilities Act

Discrimination against qualified individuals with disabilities in the recruiting, application and hiring processes as well as in the terms and conditions of employment, including promotion and training procedures.

Not discriminating includes providing accessibility to facilities

ADA Requirements:ADA Requirements:• Reasonable accommodation of known disabilities

to perform essential functions of the job• Case by case determination• No undue hardship

– Too costly– Too extensive– Too substantial– Too disruptive– Fundamentally alters the nature of the business.

ADA Requirements:ADA Requirements:• Job Analysis to determine essential job functions

• Access to testing, hiring, training and on the job facilities

• Posting of notices so visually impaired can read them.

• Proof of job relatedness of physical or mental requirement which eliminates a disabled individual from an applicant pool.

• Accommodation of former drug or alcohol users. Does not protect current users of illegal drugs.

• Allows for drug and alcohol testing

EEOC Interpretive Guidelines for Essential Job Functions Under the American’s with

Disabilities Act• The reason the position exists is to perform the function.

• The function is essential or possibly essential.

• Whether a particular job function is essential is a determination that must be made on a case-by-case basis

and should be addressed during job analysis. Any job functions that are not essential are determined to be marginal. Marginal job functions could be traded to

another position or not done at all.

Disability Disability ConcernsConcernsDuring the interview, questions can not refer to a disability.During the interview, questions can not refer to a disability.

• Unacceptable QuestionUnacceptable Question::

• Given that you cancelled your initial interview due to Given that you cancelled your initial interview due to your dialysis appointment, how can we expect you to show your dialysis appointment, how can we expect you to show up for work?up for work?

• Acceptable Question: Acceptable Question: • Attendance is a requirement for this job. How has your Attendance is a requirement for this job. How has your

attendance record been at other jobs? attendance record been at other jobs?

Independent Independent ContractorsContractorsHiring an independent contractor implies Hiring an independent contractor implies

you are purchasing a product, an you are purchasing a product, an outcome.outcome.

"To the extent you retain the right to "To the extent you retain the right to control the means by which work is control the means by which work is

done, (the worker) looks more and more done, (the worker) looks more and more like an employee,”like an employee,” Howard Simon, Landels, Ripley & Diamond LLP in San Francisco, Howard Simon, Landels, Ripley & Diamond LLP in San Francisco,

Considerations:Considerations:Independent Contractor Independent Contractor StatusStatus

• Behavioral ControlBehavioral Control– InstructionsInstructions– TrainingTraining

• Financial ControlFinancial Control– Unreimbursed expensesUnreimbursed expenses– Paid by the jobPaid by the job– Services available to general publicServices available to general public– Ability to make a profit or lossAbility to make a profit or loss

• Type of RelationshipType of Relationship– Signed contractSigned contract– Benefits Benefits – Degree of permanency & tenure of relationshipDegree of permanency & tenure of relationship

Tips to Insure Tips to Insure IndependenceIndependence

• Firm does not exercise direct control (hours, Firm does not exercise direct control (hours, facilities, products) He sets his own hours of workfacilities, products) He sets his own hours of work

• Does not receive training from your firmDoes not receive training from your firm• May have other customers for whom she does May have other customers for whom she does

contract workcontract work• Uses own tools and equipmentUses own tools and equipment• Bills you for services renderedBills you for services rendered• Uses his own tools and equipmentUses his own tools and equipment• Can’t be fired unless terms of contract are not Can’t be fired unless terms of contract are not

metmet

Immigration Act of 1990Immigration Act of 1990

• Revamps priority system of business Revamps priority system of business immigration. Increases the number of immigration. Increases the number of employment sponsored visas allotments employment sponsored visas allotments from 54,000from 54,000 to 140,000 per year and to 140,000 per year and creates five business preference categories.creates five business preference categories.

Priority Workers:Priority Workers:• Professionals with advances degrees and persons with exceptional Professionals with advances degrees and persons with exceptional

ability (40,000 visas per year).ability (40,000 visas per year).

• Professionals, skilled workers and other workers (40,000 per year). Professionals, skilled workers and other workers (40,000 per year).

– Must have a bachelor's degree for a professional.Must have a bachelor's degree for a professional.

– At least two years of training orAt least two years of training or experience. experience.• Executives and managers of Multinational CompaniesExecutives and managers of Multinational Companies

– Firm must make investments in the U.S. of $1 million and employing Firm must make investments in the U.S. of $1 million and employing 10 or more employees10 or more employees

• Special immigrants (10,000 visas per year). Special immigrants (10,000 visas per year). – Religious workersReligious workers

1970 Occupational Health 1970 Occupational Health And Safety ActAnd Safety Act

• Focus on the elimination of recognized hazards in the work place

• Requires worker training• Covers virtually every private sector place of

employment» Authorizes entry into businesses to

inspect with search warrant.» Has the power to issue citation and

penalizes

Work Sites Must Work Sites Must BeBeFree From Free From HazardsHazards

• Falling ObjectivesFalling Objectives• Chemicals and OdorChemicals and Odor• Equipment and MachineryEquipment and Machinery• Electrical WiringElectrical Wiring• Flying ObjectivesFlying Objectives• Genetic hazardsGenetic hazards

Responses to OSHAResponses to OSHA• Select employees with greater care.

– Genetic screening

– Eliminate women who can bear children from hazardous jobs

– Performance tests for hazardous jobs.

– Use of personality inventories to screen out accident-prone applicants

Responses to OSHAResponses to OSHA• Requires Performance Management.

– Train employees to handle hazardous materials– Evaluate supervisors on their unit's safety

records.

– Evaluate subordinates on their safety records.

– Orient ALL employees to safety rules,

– Add Incentives for Good Safety Records

Hazard Communication Hazard Communication

Standard of 1986Standard of 1986• Instruction on what standard statesInstruction on what standard states• How to determine the presence of How to determine the presence of

chemicals in the work placechemicals in the work place• How to protect against How to protect against exposure to exposure to

chemicalschemicals• How to handle chemicalsHow to handle chemicals