Legal Compliance 1

1. Legal Compliance 1 MANA 4328 Dr. George Benson benson@uta.edu

2. Staffing Laws Classifying Employees • FLSA and Internal Revenue Code Equal Opportunity • Civil Rights Acts (1964 and 1991) • ADA and ADEA Affirmative Action • Executive Order 11246 Immigration • Immigration Reform and Control Act Wages and Benefits • Equal Pay Act

3. Classifying Employees “Flexible” employment practices have risen sharply last 10-15 years. • Independent Contractors • FLSA (Salaried vs. Hourly) • Temporary Employees

4. What is an Independent Contractor? • An employer does not generally have to withhold or pay any taxes on payments to independent contractors. • W2 vs. 1099 • General rule: An individual is a contractor if the employer controls only the result of the work and not the means and methods of accomplishing the result. • Behavioral control • Financial control • Relationship with firm http://www.irs.ustreas.gov/pub/irs-utl/emporind.pdf

5. Temporary Employees • Temps are employees of an employment agency, not the organization where they work. • Companies cannot use long-term temporary employment only to deny benefits to employees. • Vizcaino vs. Microsoft Microsoft Corp. will pay $97 million to settle a federal lawsuit from employees who claimed the software giant classified them as "temporary" workers for years to deny them standard benefits such as health insurance and the lucrative employee stock purchase plan, thereby saving the company millions. Between 8,000 and 12,000 people are eligible for a share of the settlement. LA Times 12.13.00

6. Changes at Microsoft • Guidelines to help managers figure out when a job shouldn't be given to a temporary employee. • Policy prohibiting temporary employees from working more than 12 months at a stretch without taking at least a 100-day break. • Temporary workers wear orange badges instead of the blue badges for permanent employees. • Temporary workers are not permitted to use the company health club, play on the company baseball and soccer fields or allowed to attend company parties.

7. Fair Labor Standards Act (FSLA) • Passed in 1938 and amended many times • Nonexempt workers earn a minimum wage of not less than $5.15 an hour, effective September 1, 1997. • Overtime pay at not less than one and one-half times regular pay is required after 40 hours a workweek. • An employee must be at least 16years old to work in most non-farm jobs and at least18to work in non-farm jobs declared hazardous by the Secretary of Labor. • Youths 14and 15years old may work outside school hours in various non-manufacturing, non-mining, non-hazardous jobs under certain conditions

8. FSLA – Special Cases • Tipped employees • Domestic service workers • Teachers and administrative personnel in elementary and secondary schools • Outside sales employees • Employees in certain computer-related occupations • Employees of certain seasonal amusement or recreational establishments • Employees engaged in fishing operations • Employees engaged in newspaper delivery • Farm workers • Casual babysitters • Certain commissioned employees of retail or service establishments • Employees of railroads and air carriers • Taxi drivers • Nurses • Announcers of certain non-metropolitan broadcasting stations • Employees of motion picture theaters • Employees of certain bulk petroleum distributors • Many others….

9. Overtime Rules • First major change to FSLA in 50 years. http://www.dol.gov/esa/regs/compliance/whd/fairpay/ • In 2003 record $212.5 million in back wages was collected from employers – a 20% increase from 2002. • RadioShack will pay $29.9 million in unpaid overtime claims of 1,300 managers in California. Similar suits at Eckerd, Starbucks, and Farmer’s Insurance.

10. To be exempt from FLSA: • Salary Basis Test • Be paid a salary • Salary Level Test • Earn a minimum of $23,660/yr (old $8060/yr) • White collar workers who earn more than $100k are exempt • Blue collar workers “skilled trades” • “Duties” Test • “Administrative” • “Professional” • “Executive” • “Outside Sales” • “An employee who leads a team of other employees assigned to complete major projects”

11. “Administrative Duties” • Whose primary duty (50%) is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and • Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

12. What are the differences? • Diversity • Equal Employment Opportunity • Affirmative Action

13. Primary EEO Laws • Title VII of the Civil Rights Act 1964 • Civil Rights Act of 1991 • Age Discrimination in Employment Act of 1967 • Americans with Disabilities Act of 1990 (ADA)

14. Primary EEO Laws • Title VII of the Civil Rights Act 1964 • Civil Rights Act of 1991 • Age Discrimination in Employment Act of 1967 • Americans with Disabilities Act of 1990 (ADA)

15. Protected Groups • Race • Color • Religion • Sex • National origin • Age • Disability

16. Civil Rights Act of 1964 Title VII (a) It shall be an unlawful employment practice for an employer – (1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin; or (2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's race, color, religion, sex, or national origin.

17. Civil Rights Act of 1964 Title VII (a) It shall be an unlawful employment practice for an employer – DISPARATE TREATMENT (1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin; or ADVERSE IMPACT (2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's race, color, religion, sex, or national origin.

18. Court Cases • Griggs v. Duke Power (1971) • Adverse impacts must be job related • Discriminatory intent not sufficient defense • McDonnell Douglas vs. Green (1972) • To establish prima facie in disparate treatment cases

19. Civil Rights Act of 1991 • Followed Wards Cove Packing vs. Antonio (1989) • Prohibits “race norming” of tests. • Plaintiffs can sue for punitive damages in cases of intentional discrimination. • Adverse impact prohibited for each piece of a selection system. • Burden of proof on the employer. • Prohibits quotas in selection.

20. EEO Applied • Organizations with more than 15 employees. • Uniform Guidelines onEmployee Selection Procedures • EEO does NOT require preferential treatment - Quotas are illegal • Must keep records of applicants for 6 months • Employer must show practices are “job-related for the position in question and consistent with business necessity” • Company Defenses • Merit • Bona Fide Occupational Qualification • Business Necessity • An “alternative employment practice” must be accepted if shown to meet the business necessity and have less adverse impact.