Employment Law is a broad topic encompassing all areas of the employer-employee relationship with the exception of negotiations covered by Labor Law and Collective Bargaining. Thousands of Federal and State statutes, administrative regulations, and judicial decisions make up the law of employment. Many laws, such as minimum wage regulations are protective labor legislation. Other laws fall into the area of public insurance, such as unemployment compensation.
Employment Law includes the following:
- Employment discrimination
- Employee Retirement Income Security Act (ERISA)
- Unemployment compensation
- Collective bargaining
- Workplace safety
- Workers’ compensation
Employment discrimination laws aim to prevent discrimination based on race, sex, sexual orientation, religion, national origin, physical disability, and age by employers. Discrimination can happen when there is bias in hiring, promotion, job assignment, termination, compensation, retaliation, and diverse types of harassment.
Public Employees are protected from discrimination by the Fifth and Fourteenth Amendments to the U.S. Constitution. The Fifth Amendment provides that the federal government cannot deprive individuals of “life, liberty, or property” without due process of law while the Fourteenth Amendment prohibits states from violating a person’s rights by limiting the power of the federal and state governments to discriminate. Discrimination in employment can occur when an employer treats employees unequally because of their race, sex, religion, etc. Due process comes in many forms, however, the basic due process protection requires that employees receive a fair hearing before termination if that job firing relates to a “liberty” (such as right to assemble or free speech) or property interest. State constitutions may have similar provisions.
Private Sector Employees are protected by numerous federal statutes including:
- Equal Pay Act, which amended the Fair Labor Standards Act, prohibits employers and unions from paying different wages based on sex. It applies to employees engaged in some aspect of interstate commerce or all employees if the company participates in a significant amount of interstate commerce.
- Title VII of the Civil Rights Act of 1964 bans discrimination in employment relationships. It applies to companies, labor unions and employment agencies with more than 15 employees and who are involved in interstate commerce.
- The Age Discrimination in Employment Act (ADEA) excludes age discrimination for employees between 40 to 65. The US Supreme Court (2007-2008 term) clarified the statute in three areas. One, disparate impact claims or those based on effect of an employment policy or practice rather than the intent behind it must show proof of the discriminatory motive behind the policy. Two, the statute of limitations is met and the employee may later bring the suit in court if they file a complaint with the EEOC (Equal Employment Opportunity Commission) within 60 days of the incident. Three, a private person can bring a private age discrimination suit against federal employers.
- American with Disabilities Act (ADA) prohibits discrimination against those with handicaps by private employers, state and local governments, unions and employment agencies.
- The Uniform Services Employment & Reemployment Rights Act (USERRA) bans a public or private employer from denying employment because the applicant has current, past or present military service obligations.
- The Family and Medical Leave Act gives employees the right to take unpaid time from work to care for a newborn, recently adopted child or a sick family member.
- Lilly Ledbetter Fair Pay Act of 2009 extends the time an employee can bring a lawsuit by clarifying that a discriminatory compensation decision occurs each time the employee is paid.
Employee Retirement Income Security Act (ERISA)
ERISA is a federal statute that sets minimum standards for the administration of private employer pension plans and sets the impact of Federal Taxes on transactions associated with the management of the plans. ERISA imposes a fiduciary responsibility or the highest standard of care on the employer managing the plan. ERISA provides detailed regulations for defined contributions plans, which guarantee that employees will receive the amount in their account.
Unemployment compensation provides workers whose jobs have been terminated with payments for a certain number of weeks, determined by Congress. It is designed to provide workers with a financial cushion while finding a new and to sustain consumer spending during times of recession and recovery.
The program is based on federal and state statutes. It was created by the federal Social Security Act of 1935 and much of the federal program is implemented by the Federal Unemployment Tax Act. Each state has a separate unemployment insurance program, which is built on federal standards and must be approved by the Secretary of Labor. State and federal statutes determine which employees receive compensation, how much they receive and for how long they get benefits.
Unemployment compensation is supported by a combination of federal and state taxes paid by employers. States base the amount to be paid on the amount of wages the employer has paid, the amount the employer has contributed to the unemployment and the amount employees have withdrawn from the fund. Any state tax imposed may be credited against the federal tax. The Railroad Unemployment Insurance Act provides compensation for railroad workers who lose their jobs.
Collective bargaining is the negotiation between an employer and a group of employees to determine the conditions of employment. The product of the negotiations is the collective agreement. The National Labor Relations Act (NLRA), passed by Congress in 1935, grants employees the right to join a trade union and to collectively bargain.
The NLRA provides:
- Procedures for selecting a labor union,
- That employers can’t interfere with the selection process,
- Regulations on what tactics such as strikes, lock-outs, picketing each side may use in bargaining, and
- That employers bargain with the official representative of its employees.
Generally, disputes that can’t be resolved are sent to arbitration. Both federal and state laws govern the practice of arbitration. While the Federal Arbitration Act doesn’t apply to employment contracts, federal courts are increasingly applying the law in labor disputes. Michigan along with a majority of the states have adopted the Uniform Arbitration Act (1956) as state law. Therefore, the arbitration agreement and decision may be enforced under both state and federal law.
OSHA (Occupational and Safety Health Act) is the main statute protecting the health and safety of workers in the workplace. Every employer that participates in Interstate Commerce is subject to the regulations created under OSHA. The statute is enforced by the Secretary of Labor which can:
- Inspect the workplace to ensure regulations are being followed,
- Follow-up on complaints, inspecting for violations, and
- Determine what regulations are needed.
The Occupational Safety and Health Review Commission reviews orders of the Secretary of Labor, which are subject to judicial review. The regulations created under OSHA file five volumes of the Code of Federal Regulations. States may only pass regulations not governed by federal OSHA and must submit their plan for federal approval.
Workers’ compensation laws protect people who are injured on the job. The law was created to provide injured workers or their dependents if they are killed on the job with money thus avoiding the need for litigation. Some State laws also protect employers by limiting the amount an employee can recover and protect fellow employees by eliminating the liability of co-workers in most accidents. Federal statutes are limited to federal employees or workers employed in a significant amount of interstate commerce. Michigan and other states have enacted workers’ compensation acts for their citizens.
The Federal Employment Compensation Act provides for non-military federal employees. Other federal acts include:
- The Federal Employment Liability Act (FELA) provides that railroads engaged in interstate commerce are liable for injuries to their employees if they have been negligent,
- The Merchant Marine Act (the Jones Act) provides segment with the same type of benefits as FELA for railroad workers,
- The Longshore and Harbor Workers’ Compensation Act provides for employees of private maritime employers, and
- The Black Lung Benefits Act offers compensation for miners suffering from “black lung” disease.
Employment law is a broad topic covering many aspects of the employer-employee relationship. If you have questions about this practice area, please contact Miller Law partner Ann Miller at 248-841-2200.