Chapter%2016 - Chapter16: Employment Law and Protection of...

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Chapter16: Employment Law and Protection of Workers David Baumer, Spring 2003 Legal Environment of Business in the Information Age
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Income Protection Legislation Fair Labor Standards Act (FLSA), 1938 Applies to all businesses engaged in interstate commerce, or production of goods destined for interstate commerce A basic provision of the FLSA is the minimum wage Exempt categories include executives, administrative employees, professionals and outside salespersons FLSA also requires that employees be paid time and half for work over 40 hours per week
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Fair Labor Standards Act The FLSA also limits child labor Makes it illegal to employ children under 14 with a few exceptions such as delivering newspapers and babysitting Children 14 to 16 are allowed to work but only in non-hazardous jobs and only for 3 hours on school days Children 16 to 18 are prohibited from working in hazardous occupations
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Social Security Employees and employers are required to contribute to FICA (Federal Insurance Compensation Act)-- on employee income up to $80,600 per year Employers do not have to pay SS for independent contractors SS also offers disability income to those who become disabled SS also funds Medicare out of employee and employer “contributions”
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Employee Retirement Income Security Act ERISA was passed in 1974 Designed to regulate pension plans offered by private employers Employers not required to have a pension plan , but if they do, the plan must conform to federal regulations Fed. Regulations prevent employees who have worked a long time from being denied pension benefits These regulations require that an employee must be vested within 5 years of employment Pension plans are supposed to be fully funded so that bankruptcy of the company will not present workers from collecting their pension benefits
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Protection of Workers Who Lose their Jobs Unemployment compensation Administered by the states Covers 96% of state workers Unemployment compensation is funded by employer contributions Employer contributions are inversely related to the stability of the employer’s workforce In order to qualify for unemployment compensation the employee cannot have quit voluntarily or have been discharged for misconduct Misconduct does not mean incompetence , but rather willful behavior such as fights or insubordination
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Retention of Health Benefits The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 Allows terminated workers, for whatever reason to retain company health benefits for 18 to 36 months Employees have to pay for the premiums Health Insurance Portability and Accountability Act (HIPAA) of 1996 Allows workers to change jobs and not be excluded from coverage by the health plan of the new employer because of a preexisting medical condition
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Retention of Health Benefits Family and Medical Leave Act (FMLA) 1993 Allows workers to leave for up to
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Chapter%2016 - Chapter16: Employment Law and Protection of...

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