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THE LEGAL ENVIRONMENT OF BUSINESS A Critical Thinking Approach Fourth Edition Nancy K. Kubasek Bartley A. Brennan M. Neil Browne © 2006 Prentice Hall Ch. 18-1 THE LEGAL ENVIRONMENT OF BUSINESS CHAPTER 18 The Employment Relationship © 2006 Prentice Hall Ch. 18-2 THE LEGAL ENVIRONMENT OF BUSINESS The Employment Relationship Historical employer-employee relationship “Employment-at-Will” Increasingly regulated by federal and state laws © 2006 Prentice Hall Ch. 18-3 THE LEGAL ENVIRONMENT OF BUSINESS Wage and Hour Laws Fair Labor Standards Act (FLSA) Sets minimum wage 40-hour week Exempt workers © 2006 Prentice Hall Ch. 18-4 THE LEGAL ENVIRONMENT OF BUSINESS Unemployment Compensation Federal Unemployment Tax Act Created unemployment fund States can draw and distribute funds Standards differ among the states © 2006 Prentice Hall Ch. 18-5 THE LEGAL ENVIRONMENT OF BUSINESS onsolidated mnibus udget Continues employee benefits after termination econciliation Employee can keep benefits for 18 months ct 60-day decision window Penalties for employer noncompliance © 2006 Prentice Hall Ch. 18-6 THE LEGAL ENVIRONMENT OF BUSINESS Workers’ Compensation State law system Provides funds for injured workers “No fault” basis Covers on-the-job injuries Funds distributed by agency— per payment schedule Trade Off: Workers waive legal remedies in court action © 2006 Prentice Hall Ch. 18-7 THE LEGAL ENVIRONMENT OF BUSINESS Family Medical Leave Act (1993) Covers absences from work due to medical problems of workers’ family members Applies to public employees and private business with 50+ workers Provides 12 weeks in 12-month period © 2006 Prentice Hall Ch. 18-8 THE LEGAL ENVIRONMENT OF BUSINESS FMLA Coverage Birth or adoption Foster children Medical care of spouse, child, or parent “Serious health condition” of employee © 2006 Prentice Hall Ch. 18-9 THE LEGAL ENVIRONMENT OF BUSINESS FMLA Remedies Damages for unpaid wages, lost benefits = 12 weeks of pay Bad faith showing results in double damages Reinstatement Promotion © 2006 Prentice Hall Ch. 18-10 THE LEGAL ENVIRONMENT OF BUSINESS Occupational Safety and Health Act (1970) Sets standards for workplace safety Enforces regulations via inspections © 2006 Prentice Hall Ch. 18-11 THE LEGAL ENVIRONMENT OF BUSINESS OSHA Violations and Penalties Violations: willful or repeat; serious; nonserious Penalties: per violation $7,000 to $70,000 per day Penalties: $7,000 per violation to and $70,000 Criminal penalties of fines per day imprisonment for violations resulting in death © 2006 Prentice Hall Ch. 18-12 THE LEGAL ENVIRONMENT OF BUSINESS OSHA Related Agencies OSHRC: Independent review board for OSHA citations NIOSH: Research institution to develop standards and recommend policies © 2006 Prentice Hall Ch. 18-13 THE LEGAL ENVIRONMENT OF BUSINESS Employee Privacy Rights New technology in the workplace has created privacy issues Omnibus Crime Control Act and Electronic Communications Privacy Act provides employees with enforceable privacy rights in the workplace © 2006 Prentice Hall Employer monitoring of worker communications may violate law Employers may restrict, and monitor, email, etc. But no eavesdropping Ch. 18-14 THE LEGAL ENVIRONMENT OF BUSINESS Related Workplace Privacy Issues Surveillance cameras Access to medical records Drug testing Polygraph testing © 2006 Prentice Hall Ch. 18-15 THE LEGAL ENVIRONMENT OF BUSINESS Employer Response Company policy statements States company rules Requires employee to acknowledge Removes any “reasonable expectation of privacy” © 2006 Prentice Hall Ch. 18-16 THE LEGAL ENVIRONMENT OF BUSINESS Drug Testing Drug-Free Workplace Act 1988 Requires antidrug policies of certain employers Testing requirement vs. employee privacy Pre-employment; periodic; “reasonable suspicion”; random © 2006 Prentice Hall Ch. 18-17 THE LEGAL ENVIRONMENT OF BUSINESS Other Testing Employers attempt to prescreen applicants via tests: skills, medical Protection against abusive practices: Employee Polygraph Protection Act 1988 Americans with Disabilities Act EEOC © 2006 Prentice Hall Ch. 18-18 THE LEGAL ENVIRONMENT OF BUSINESS Global Dimensions of Employment Law Rights of employees in most other industrialized countries are far more extensive than in U.S. Europe: generous family leave, more vacation time Scandinavia: 5 weeks vacation time; 10 weeks after five years © 2006 Prentice Hall Ch. 18-19