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Comprehensive Volume, 18th Edition
Chapter 41:
Regulation of Employment
The Employment Relationship
The relationship of employer and employee is
created by the agreement of the parties and is
subject to contract principles.
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If the contract states a specific duration, the
employer cannot terminate the contract at an
earlier date unless just cause exists.
If no definite time period is set forth, the
individual is an at-will employee, and the employer
can terminate the contract at any time.
Some courts limit this if the discharge violates
public policy or is contrary to good faith and fair
dealing in the employment relationship.
Duties and Rights of Employee
The duties of an employee include:
Performing the service of the contract
Refraining from disclosing trade secrets
Allowing the employer to freely use any
inventions created on work time with
employer’s materials (called shop right)
The rights of an employee include:
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To be paid according to the contract (at
least the federal minimum wage)
Employment Relationship
Consent
Employer
Pays
Compensation
Employee
(Individual or Collective
Bargaining Agreement)
Performs services/works
under employer’s
direction and control
Independent
Contractor
Perform duties free from
control by other party
Agent
Negotiates contracts on
behalf of an under
control of principal
Differs from:
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Laws Regarding Employment
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The Fair Labor Standards Act regulates
minimum wages, overtime hours, and
child labor.
Under the National Labor Relations
Act, employees have the right to form a
union to obtain a collective bargaining
contract or to refrain from
organizational activities.
Laws Regarding Employment
The Employees Retirement Income
Security Act (ERISA) protects
employees’ pensions by requiring
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(1) high standards of those administering
the funds,
(2) reasonable vesting of benefits,
(3) adequate funding, and
(4) an insurance program to guarantee
payments of earned benefits.
Unemployment Compensation
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Unemployment compensation benefits
are paid to persons for a limited period
of time if they are out of work through
no fault of their own.
Persons receiving unemployment
compensation must be available for
placement in a job similar in duties and
comparable in rate of pay to the job
they lost.
Benefits Provided by Law
Twelve-week maternity, paternity, and
adoption leaves are available under the
Family and Medical Leave Act.
Employers and employees pay Social
Security taxes to provide retirement
benefits, disability benefits, life
insurance benefits, and Medicare.
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OSHA
The Occupational Safety and Health Act
provides for:
(1) the establishment of safety and health
standards and
(2) the effective enforcement of these
standards.
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Many states have enacted “right-toknow” laws, which require employers to
inform their employees of any
hazardous substances present in the
workplace.
Regulation of Working Conditions
Working Conditions
Wages
and
Hours
Fair Labor
Standards
Act
Sweat Shop
Code
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Privacy
Drug
Testing
Safety
E-Mail
Monitoring
OSHA
Contract
Terms
National Labor
Relations Act
Workers’ Compensation
Workers’ compensation laws provide
for the prompt payment of
compensation and medical benefits to
persons injured in the course of
employment without regard to fault.
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An injured employee’s remedy is generally
limited to the remedy provided by the
workers’ compensation statute.
Most states also provide compensation to
workers for occupational diseases.
Regulation of Compensation
Compensation and Benefits
Fair Labor
Standards
Act
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Pensions
ERISA
Unemployment
Social
Security
Family and
Medical
Leave Act
Privacy Rights
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The Bill of Rights is the source of public
sector employees’ privacy rights.
Private sector employees may obtain limited
privacy rights from statutes, case law, and
collective bargaining agreements.
Employers may monitor employee telephone
calls, although once it is determined that the
call is personal, the employer must stop
listening or be in violation of the federal
wiretap statute.
Privacy Rights
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The ordinary-course-of-business and consent
exceptions to the Electronic Communications
Privacy Act of 1986 (ECPA) give private
employers a great deal of latitude to monitor
employee E-mail.
Notification to employees of employers’
policies on searching lockers, desks, and
offices reduces employees’ expectations of
privacy, and a search conducted in
conformity with a known policy is generally
not an invasion of privacy.
Other Laws
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Drug and alcohol testing is generally
permissible if it is based on reasonable
suspicion; random drug and alcohol
testing may also be permissible in
safety-sensitive positions.
Immigration laws prohibit the
employment of aliens who have illegally
entered the United States.