BLAW 341 Powerpoint 23 Notes Exam 3 PDF

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Blaw 341: PowerPoint 23 Employment Law Eployee v. Independent Contractor • What category of worker do “Employment laws” generally cover? • ANSWER: Employment laws generally cover “EMPLOYEES”, NOT those doing work as “INDEPENDENT CONTRACTORS.” • “Control Test” • Traditional IRS test used to distinguish Employees from IC’s • What individuals should be taxed as employees vs. independent contracts Employee v. IC: Factors of “Control Test”: • Control Questions: Does Employer Control-• When and where work is done; • Ex: at company headquarters 4 days a week • But if worker does work at own facility at odd hours-> suggest worker might be an independent contractor • Tools and equipment used; • Who owns them? - worker versus company • Where supplies and services are purchased; • Who must perform specific work; • Company • Order or sequence of work tasks • Financial Questions • Who has greatest unreimbursed business expenses; • Who make investment in tools, etc.; • Whether services are offered to others; • How is worker paid; • Can worker make a “profit” • Type of Relationship • Does a written contract exist and does it DESCRIBE the relationship; • we can look at language in contract and see if it is describing work of employee to employer • Does employer pay benefits; • VERY important- have to see if employee gets benefits-> usually if employee can participate in health care plan, social security and Medicare benefits, etc.-> employers would only pay to employees • Is relationship one-time or long term; • One time= independent contractor • Are worker’s services a critical part of employer’s ongoing business • If worker is doing work and if they don’t then the company would stop functioning-> usually employees because they can’t risk hiring an independent contractor

^^ understand the type of question that will be asked and does the answer suggest if the worker would be an employee or contractor-> then balances out to get most logical choice Phoenix Corporation hired Erika to make whistles. Under the terms of the agreement, Erika was to be paid a fixed sum without benefits, she was to craft the whistles in her shop, she could use any suppliers she choose, and she had 3 months during which to complete the project. If a dispute arises and a court must determine Erika’s employment status, which of the following is the most likely outcome? • Erika is an employee of Phoenix • Erika is an independent contractor • All of facts lead to IC-> on exam four facts might go one way but one or two goes one way. • IF IT SAYS PAYS BENEFIT-> significantly determining fact that employer is actually an employee Employment at Will  Traditional doctrine that governs Employment Contracts  True or False: Under the basic “at will” doctrine, “at will” employees can be terminated at any time without cause. o A. True o B. False  Can be terminated for any reason or no reason at all- but there are exceptions  Basic Doctrine: o Either party may terminate an employment relationship o ANY TIME FOR ANY REASON, o absent prior agreement to the contrary o Doctrine is HARSH, so a number of exceptions apply:  Exceptions based on:  Contract Theory  Tort Theory  Public Policy  Employment at Will: Actions based on Contract Theory o Breach of Express Contract o Breach of Implied Contract  Implied Contract:  TERMS = EMPLOYEE’S “REASONABLE EXPECTATIONS  Employee’s “Reasonable Expectations” (see Example 24.1):  Can look at any source that came from somebody in the company who had the authority to make termination decisions  Manual says that employer will only fire you if you do one of the three things-> the employer breached contract and you could sue and potentially win

You can always look into any live meetings where you were told about the policies or one on one meetings if somebody was in a position of authority  Company emails, blogs, text message or bulletin board o MUST have authorization and CREDIBLE SOURCE o Promissory Estoppel Employment at Will: Exceptions based on Tort Theory o Action for Wrongful Discharge:  Tort action an employee may file if an employer improperly discharges an employee.  MOST COMMON action o In limited situations when employer’s discharge is deemed abusive, the discharge of an employee may also lead to suits for:  Intentional Infliction of Emotional Distress  Defamation  Fraud  (Example 24.2) o What if you are an incredible skilled engineer. There aren’t many of you out there- three companies that hire engineer with your specialty. Right now you work for Ancore and you have a nice job and making decent money but another company wants you to work for them. The other company tells you that they will give you three times the vacation time, more money, benefits, etc. He switched jobs and after two weeks he is told that the manager who hired him told him that the company was hitting bankruptcy and two weeks later it goes under. o He may be able to claim fraud because manager did not enclose defects and the fact that they might not have operated in the following weeks Employment at Will: Exceptions based on Public Policy o Employee cannot be fired if termination violates public policy o How do you know what “public policy” is?  Statutes (most often)  Common Law  Well-known Mandates o Examples of statutes that include “public policy” that limits the “employment at will” doctrine:  Whistleblowing Statutes  Protects employees who notify outside authorities that employer is doing something hazardous, illegal, or unsafe. You as employees have the most knowledge about what is going on and we want to encourage employees to let authorities know if something is happening. 

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In practice even though you may be protected by the act- you could fact some negative repercussions o Back in the 1980s – operators of CIA were giving money that was using money to buy guns and sending to Nicaragua. A few years later the CIA operative (one who sold public about this) committed suicide. – he suffered  Ex: Edward Snowden: was he right for opening up the world to the security problems that was happening in the US  ADA (American’s with Disabilities Act)  What if you work for a company and suddenly become disabled? ADA has acts about how we have to treat American’s with disabilities  FMLA (Family Medical Leave Act)  If you have prostate cancer or sickness- FMLA tells us that if you work for employer for more then 1 year- the employer has to keep job open or give you a position good or better as long as you didn’t miss more then 12 weeks of work in a given year.  OSHA  Occupational safety and health act tells us that if you are a worker you should feel safe in the workplace. If you feel for a day that it isn’t safe to work (ex: you work in electricity and it is raining out) if you walk off job and refuse to work until it is fixed, OSHA makes sure that you don’t lose your job if you leave work for health concerns. o Examples of common law “public policy” well-known mandates that limit the “employment at will” doctrine:  Refusal to Commit an Unlawful Act;  Fulfilling a Public Obligation  Exercising a Statutory Right  Workers compensation: if you are sick you still deserve compensation  Whistleblowing in state that does not have a whistleblowing statute  Ex: you work in a state where it doesn’t have whistleblowing statute but you work in a nursing home where they are treating them terrible and not taking care of the patients. You still can’t get fired even if that state doesn’t have a statute 

Matt was summoned for jury duty and was required to leave his job for two months. Upon his return, his employer said his position had been filled. Does Matt have a valid claim for wrongful discharge against his employer? o Answer: Yes o No Jury Duty is a public obligation- so if Matt has to go – no matter how long it is his employer can’t fire him

Wages, Hours, and Layoffs  FLSA: Fair Labor Standards Act o COVERS ALL EMPLOYERS ENGAGED IN INTERSTATE COMMERCE o Critical Provisions:  Child Labor  Minimum Wages  Maximum Hours o Child Labor:  Restricts Labor when child is under 18  No child is permitted to work in ANY hazardous industry  Before age of 14 and 14-15 has maximum hours because they want the to be in school and also the working time

Bill owns a U.S. factory that makes clothes. Can Bill hire Sally, a 12 year old girl, to work the sewing machines in his shop? (Sally is not related to Bill.) A. No, assuming clothing manufactures are not an industry that permits child labor; B. Yes, but Sally can only work during certain times of the day and for a limited number of hours Can only work for parents- newspaper- or entertainment industry FLSA: Fair Labor Standards Act: o Minimum Wage:  Federal: $7.25 / hour  State: may have HIGHER minimum than federal  Ex: New York just raised minimum wage to 15.5$ but too big of a burden now so it is going to up gradually

o Minimum Wage and Tips:  If employee receives tips, then employer is ONLY required to pay $2.13 / hour in wages AS LONG AS wage + tips = at least $7.25  (if amount of wage + tips is less than $7.25, employer must pay the difference)  in states that have a hire minimum wage the amount of wage + tips has to be more o NORMAL HOURS= 40 hour week (normal) = regular hourly wage o “OVETIME’ Additional hours (beyond 40 hours)= 1.5 times regular hourly wage o Test for Overtime (for eligible employees):  Employee worked overtime but was not paid for the overtime hours; AND  Employer knew or should have known employee worked overtime hours  Employee’s supervisor told employee that you need to work extra hours but company won’t pay. The supervisor told him that you are entitled but we won’t pay and also altered some of employee’s time card to only show 40 hrs of work. The employee then sued the company for making her work extra hours and the employer knew.  FLSA: Fair Labor Standards Act: Overtime Pay Exemption: o Types of Workers EXEMPT from Overtime 1.5 times pay (not entitled to additional pay):  Executive Employees  Administrative Employees  Professional Employees o “Beyond Our Borders” p. 606 What Constitutes “Work” under FLSA? Ben is an accountant. He works for a large accounting firm and earns a fixed salary. Ben usually works 40 hours per week, but for 8 weeks this year he worked 60 hours per week. Under the FLSA, is Ben entitled to 1.5 times his regular weekly wage for 20 hours per week for the 8 weeks during which he worked longer hours? A. Yes B. No A. Ben is an accountant- a professional not entitled to overtime pay. B. He also earns a fixed salary- and many times people who work a fixed salary aren’t entitled to overtime pay Layoffs: The WARN Act (Federal)  Worker Adjustment and Retraining Notification Act:  Federal Law requires large employers (100+ employees) to provide 60 days notice prior to any o mass layoff (affect 1/3 of employees) OR o plant closure that affects 50 or more full-time workers. Notice must be given to BOTH o worker (or worker’s representative) AND o state and local gov’t authorities

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if you are a large employer (with greater then 100 employees) and laying off or firing a number of people- you have to warn workers and state/local authorities to find services for that group of individuals Pay for 2 months to lessen the burden to the worker The employer will probably file for unemployement- which is why you need to let state and local authorities know

Layoffs: State Laws • Many states also have laws that require employers to give notice prior to mass layoffs. • Some state laws are more strict than the federal WARN act. Family & Medical Leave Act (FMLA)  Family and Medical Leave Act: FMLA o Federal act that allows employees to take time off from work for family or medical reasons. o Many states and employers also have private family-leave plans.  Family & Medical Leave Act: Coverage and Applicability o Employers with 50+ employees must provide up to 12 weeks of unpaid family or medical leave in any 12 month period for any employee who has worked for over 1 yr.  FMLA: (Military) o 26 weeks of military caregiver leave within a 12 month period if family member is seriously injured or become ill as a result of active military duty. o 12 weeks of qualifying exigency leave to take care of non-medical emergencies when a family member is called into active duty. Three years after Robert began working for his current employer, Robert’s wife had a baby. Robert took off 8 weeks from work. Must Robert’s employer pay Robert his regular salary during the time Robert took off? A. Yes B. No A. You don’t get your salary but get to remain on health care plan  FMLA LEAVE o What happens?  Employer is NOT required to pay wages BUT must:  Continue Health Care Coverage;  After leave, reinstate employee to equivalent or better position (UNLESS employee is a “key employee”--pay falls within top 10% of employer’s workforce)  Key employee is defined as somebody who is in the top 10% of workforce  All of the salaries that company pays out and if you re one of the individuals whose salary puts you at top 10% and making 90% more then other employees- it makes it unfair to employer to have to keep that job open o If you are making that much money- it makes sense that you are in a crucial position and the company needs to fill that position

o Also- means that you are qualified and also making a lot of money and can take the hit- so you can find a job after FMLA Violations o Remedies Employer can be required to provide:  Damages to compensate employee for lost benefits, compensation, and actual monetary losses;  Job reinstatement;  Promotion (if employer denied a promotion)  Court Costs and Attorney fees (if employee wins suit)  2x damage award if employer engage in bad faith o ^^^ don’t need to memorize for exam  Employers must provide _NOTICE_ when an absence will count as authorized FMLA leave. o Must give a written notice that says you are qualified for an FMLA leave FMLA leave time- check to make sure employer has worked for more then one year- employer has more then 50 people (if less FMLA does not apply), and then also check to see how many weeks during preceeding year that employee has taken (if already taken 12 weeks FMLA would not apply) 

OSHA: Occupational Safety and Health Act  FEDERAL legislation: o Imposes DUTY on Employers to keep workplace SAFE!! o Establishes safety standards for various industries:  Ex: Radiologist Technicians step outside room because we don’t have those individuals exposed to radiation all day long  Or construction workers have to wear construction hats o If employer CANNOT fire or discriminate against an employee who does not work because (s)he believes the workplace is unsafe. Ben works at Three Mile Island (TMI), a nuclear power reactor. Ben noticed that his personal radioactivity sensor badge (that detects high levels of radiation) has registered abnormally high exposure levels, so Ben walked off the job and refuses to return until proper testing is conducted. Under OSHA, can TMI fire Ben for failure to perform his duties? A. Yes B. No  OSHA: Mandatory Notices, Record Keeping and Reports o Employer with 11 + employees must: o KEEP RECORDS on every work related injury or disease;  Does not need to write down every person who had a cold- but if a copy machine fell on you at work- you would need to record it o Every Employer covered by OSHA MUST:  Report any work related death or 3+ hospitalizations within 8 hours of the incident o OSHA Compliance Officers may inspect ANY establishment covered by OSHA.  State Workers’ Compensation Laws

o Laws that establish an administrative procedure for compensation of workers for injuries that arise in the course of employment. o Where does Money Come from?  Employer may purchase __INSURANCE_ OR  Employer may _PAY CLAIMS_ (a form of “self insurance”  Requirements for State Workers’ Compensation Benefits o Existence of an Employment Relationship o An accidental injury that occurred “on the job” or “in the course of employment,” regardless of fault. o Prompt Notice by employee to  Employer (30 days) and  State (60 days – 2 years) Bobby was hurt while commuting from his home to work on Monday morning. Can Bobby claim workers’ compensation benefits for the injuries he received? A. Anser: Yes B. No A. Under most workers comp (always by state) states does not count until you reach work place. If you are driving to work from home- you can’t claim workers compensation. B. But if part of your job Is sales and you are always traveling- generally speaking in most states- if you are traveling home to your first stop doesn’t count but when you are going between all of the 6 stops that is during the course of your employment Anuja was injured on the job. Her injury occurred because her employer and a coworker had been negligent. She has filed a state worker’s compensation claim and has begun receiving benefits, but she also wants to file litigation against her employer to obtain additional compensation for her injuries. Will Anuja be permitted to file a lawsuit? A. Yes B. Answer: No A. If it is due to the Negligence of your employer you can file a lawsuit or workers compensation CAN’T DO BOTH B. Pro of workers compensation – you just file the claim and get money right away, also if it was because of your negligence it will not effect the amount you get C. Negative is you might not make as much money as you would if it as during a lawsuit D. But if you go to a lawsuit negative is you might lose the lawsuit or it might take years if you even get money  Workers’ Compensation v. Litigation o Injury through employer’s negligence:  If employee accepts workers’ compensation, the employee MAY NOT sue for injuries caused by employer’s negligence.  (Conversely, employer may not claim traditional defenses to negligence like claims that employee assumed the risk, was contributorily negligent, or that injury was cause by a “fellow servant.”

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If you are injured through an intentional act of your employer- you worker can file for BOTH workers compensation and a lawsuit...